My LVR is 45%, with a mix of unencumbered properties,P&I,IO, my bank will only lend me another $300k. Interest rates 7.47%pi with only $50k,6.45%io fixed for another year,7.47% io.fixed for 3 years.
On my latest acquisition, my “new replaced” ‘business’ personal banker had listed 13 of my properties as security against the loan,when I commented that i thought that was a bit aggressive, I was told it was easier to do it this way. (obviously for the bank), to continue to build my portfolio I have a number of properties that are on 1,000sp metre blocks, (one in woop woop on 2,000sq mt block) and I was thinking of adding a modern duplex at the rear, retaining the original home, thus not paying stamp duty, legals etc but increasing rental return from property, not to mention landtax (NSW) They are all currently rented at a little under market rental (long term tenants all) When I tried to discuss it with a mortgage broker they told me “You probably know more than me!”
Not sure whether to sit and hold and watch….and wait… or go gung-ho
I have only sold one non performing-defaulting tenant – property.Hi, and congratulations on a nice portfolio. Just a couple of general comments…..1) You need to talk to a more experienced mortgage broker or lender. Don’t get me wrong, everyone has to learn, but a broker who has not had a lot of experience with investment loans/larger portfolios is not the right person for the job in your case. 2) Unless you plan on selling a lot of your property, having them share security is not the end of the world, but honestly, with your excellent LVR, it certainly would be a good idea to try and get what properties you can ‘standing alone’, and not being cross secured, or collatorised. This would make new acquisitions a heap easier, as having that many properties securing each other would be an absolute nightmare…..As long as you can service the loans or refinancing, with your amount of equity you should be able to get nearly all of your property out of this cross secured position. 3) Tell your personal banker he is a ……..ah skip that bit. All the best with your expanding property! [strum]
My previous personal banker (same bank) was great and even released a property for me to go with a commercial lender, I have one property up my sleeve as a P& I, with only $50k owing on it, value $365K, so I figured I could borrow against this if needed.My new banker advised me to sell three properties and my PPOR, buy a 1.8mill PPOR, then they would lend more to me again, but I can’t see the sense in selling very good performing investment properties & I don’t need a bigger house.(already 19 rooms) (don’t want to move). I have not had to refinance anything and have never defaulted. So V8ghia, should I build, buy or wait & see.
I just can’t stop looking at property!!!Ah now Mopsy, don’t put me on the spot now……[biggrin] I guess if you can’t stop looking at property it’s the build or buy option. As far as how you have managed and achieved what you have so far, the wait and see option would’nt be doing you justice I don’t think. Have you developed or built before? If not maybe the buy option…..I think you know what you are going to do already, but just looking at the finance thing, your 365k property looks like the perfect one to perhaps refinance to 80% LVR, and have the equity sitting in a line of credit type account to be used purely for investment purposes only, which you can use to fund deposits on a few other properties…..that should keep you busy looking at property for a while!. And purely my personal opinion, I think you are spot on in that if you are happy with your exisiting home, why get further into debt for something you don’t need (or want) . And maybe you should give your current lender a break for this one, and get the loan refinance and subsequent other loans elswhere. The more you say about your new banker, the more it frightens me – All the best with your journey, and make sure you let us know how you go/what you do mopsyblossum. [strum]
You may not be able to borrow more money because of a low income.
Comments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Mopsy
Sounds to me like a little bit of sneaky cross collaterislising going on here with an experienced Personal Banker.
I would be freeing them up as soon as possible and then at least you can start a fresh. Remember the market is a lot bigger these days and many clients have several millions of borrowing spread over a few lenders.
Cheers
Richard Taylor
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Licensed Financial Planner. Ph: 07 3720 1888
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Maybe your bank is the one starting with ‘N’, or even ‘C’ – they have been known to take more security than is needed.
Best to keep each property separate. 13 properties in together will be very messy to untangle. If you have equity you can always release some with No Doc loans. So best to leave some free to be used later on.
Terryw
Discover Home Loans
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Hi all, I’m in roughly the same position @ about 45-50% LVR, retired with no income other than rent.
My current lender does indeed start with a ‘c’. I told the ‘n’ to jump off a cliff & borrowed from a private lender [10% interest balloon repayment in 2 years] And surpise, surpise, when I already had the funding, ‘c’ offered to refinance me & of course, took all my unencumbered property as collateral.
It doesn’t make sense for me to sell the devt properties [to be completed by June] so I’ll be looking to refinance. Hope I don’t have to tell the ‘c’ to jump off a cliff!
I concur with the investor who said he’s totally indiscriminate, hating all banks equally.
Cheers,
Kum Yin
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