Hi all. I have a question regarding when a bank is able to set up a LOC. This does appear to be a stupid question but I thought I would ask it none the less.
Late last year I went to see my bank NAB and suggested that I would like to set up a LOC facility so I would be able to move on somthing as I was activley looking. They said no they couldn't until I had signed a contract on a property. This seemed odd but I rolled with it and thought it would be a simple process regardless when the time came.
I have since signed a contract in my new trust structure. The money for the deposit will come from this LOC I speak of. There now appears to be a problem with setting up the LOC (i will find out exaclty what tomorrow 2 Feb). As well as there being a problem with that there seems to be a problem with the time frame on NAB legal team reviewing the docs. I also suggested that my trust docs be reviewed sometime before I signed a contract as again it would be one less thing to worry about. Finance Clause ends Friday and I am praying for an extension.
I was told today that the LOC application was done but the loan for the new purchase could not be done until this was completed. Not to mention when I sat down with the bank everything was going to be not a drama two weeks ago.
Do banks require a new contract to setup a LOC on existing equity?
Could the transfer of money from the LOC to the trust be the issue?
And why are they so difficult to get on with? I don't think my asks were unreasonable. I feel its my equity and I should be able to set it up use it how I want (to a degree obviously) I know what I am trying to do but it just isn't happening and all loans just seem to be taking so long at the moment. And the lump on my head just seems to be getting bigger and bigger from banging my head against the wall.
Thoughts, advice or just a shoulder to cry on
Is the property you already own in joint names. If it is this can cause problems if the LOC is in one joint owners name while the equity is owned by two owners. I had to go to a solicitor and have the implications of this explained to me.
Although a LOC would seem to be fair if it gave you usually up to 80% LVR this requires the bank to value the property and you have to be able to service the LOC maximum allowed borrowing limit.
This LOC will effect the other loan as you have a massive borrowing capacity in the LOC that has to be serviced.
Do banks require a new contract to setup a LOC on existing equity? – Yes it is a new loan facility account
Could the transfer of money from the LOC to the trust be the issue? – maybe if evidence of savings are required and also the service ability as you have to service the LOC and then service the new loan.
Very strange that you could not set up LOC on existing equity until you sign on another property.
I have two LOC accounts with ST George and I do not have another property contract signed .
All existing properties are in my name. There is no drama what so ever putting the new property in to my name from a finance point of view but I just wanted to steer away from this and start putting them into a trust.
I was going to take this new property to another bank with the deposit coming from the LOC but as NAB have me by the balls this isn't possible.
The LOC is for investment purposes. I can service the loan and the equity is there.
Oh well I will find out today regardless.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
