Bank manager will not release home equity of 50k+ to me to use as I would expect with a line of credit. Just tells me that when I have found a investment property I wish to buy, the bank manager will release the equity in my home to me.
Now what is going on? Is this normal?
I have a existing home loan with Bank since 2001. Applying for LOC Portfolio loan last Nov, Bank sent the valuers around to value my place. The value of my home has gone up 50K+. Portfolio loan account appears on my internet banking.
I have a hunch that the bank manager what's to cross collaterise my existing home loan with the investment property that I will buy.
Another Bank lending manager showed me how the whole Portfoilio loan works by showing me the computer screen of my records. From what I understand, Both my existing home and any future properties I finance through st george are pooled together and then the collective equity can be divided off into sub accounts. That lending manager was trying to tell me that it is NOT cross collaterising. To me it look a hell of alot like creoss collaterising!
What should I do to get my equity out of my home loan? and avoid cross collaterising.
I have just purchased a investment property at auction and have paid the 10% deposit with savings. But I will need the equity in my home for the other 10% plus stamp duty. Have 3 month settlement so am willing to shop around to other banks if I have to. But will need to get bank sorted soon so can sort out building insurance.
Worst Case Senario:
Go to another bank and get a loan for an investment property at 90 lvr plus stamp duty and pay LMI. The property is a 5km from melbourne cbd and exellent land characteristics on quiet street with excellent long term tennant.Refinance with another bank senario:
Refinace home loan with another bank LOC – with application fee (bummer)
Finance Investment Property with yet another bank – with application fee (bummer)Solicitor Senario:
The conveyancer I'm using in Victoria has an extra service of dealing with the bank's solicitor and also acting on my behalf with regard to arranging bank finance. I could use them, at what ever cost that will be.Existing Bank Senario:
Just go to existing with the contract for my investment property and demand that the loans not be cross collaterised. Saving 2 application fees but will be cross collaterised, I think.Any insights would be most appreciated.
Abbruzzi
Hi Abbruzzi
Just back from 2 weeks holiday away so havent posted for a while and will get straight back into it.
When i first arrived in Australia in 1993 i spent a year as SGB lending manager here in Qld. Even then the old blanket loan trick promise we are not cross collateralising was being worked and is a complete ruise.
I assure you that the Bank will be taking both properties as security under their portfolio product even if they are split into separate accounts.
Paying LMI is not such a bad thing and is often a cost of investing and moving forward. If you dont wish to refinance or restructure your existing loans then look to take out a new IP loan on the new property on a standalone basis.
In saying this if SGB won't allow you to operate a LOC as the way it should be I would be giving them the big flick.
You can do better !!!
Richard Taylor | Australia's leading private lender
Hi Abbruzzi,
Suggest you go to a local mortgage broker who will deal with a different area of St George & get you the result you are looking for at no additional cost to yourself.
Brilliant!! thanks for the advice Richard and Philip. So glad to see I have options.
Philip, just a quick question. Will the broker think it is worth their while getting involved if the LOC facility is already set up?
I'll try it out anyway.
Regards
AbbruzziAbbruzzi
Yes certainly is.
Use someone who gives SGB a fair amount of business and you will find they have some swing with the Bank.
FYI SGB have just launched a 3 / 5 Year fixed rate of 7.15% wef from Monday which is attractive in this market.Richard Taylor | Australia's leading private lender
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