Hi all,
i'm new to the forum and keen to start on property investment but before that i need to structure myself in many ways. One of which is the finance! I already got pre-approve with 400k already but before go shopping, i have some questions to ask many of big guns here.
my question here is whether i should keep all my savings the same bank as my property finance (loan)??? As well as my business account (for my side business) should be with other bank??
some say, one property, one bank, in other words, 4 ip – 4 banks?
Should in the future i purchase more ip, will i be able to get out more loan?
Any advice and suggestions are greatly appreciated.
thanks in advance guys!
I think there's a common misconception that you must have all your loans with different lenders to avoid cross collaterisation.
This isn't the case. You can have multiple loans/properties with the same lender but keep the structure clean and uncrossed.
Whether this is ideal for you is anyones guess – everyone's circumstances are different.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thank you very much for your reply, Shahin and Jamie.
For example, you've reached the maximum threshold where you can take out the loan from the current lender, and have to go to another lender, isn't it likely that they will not approve the loan because of the credit ratings?
Or is it depends on the status of the IPs whether it is doing positive CF + capital growth or the other way around?
In my own opinion, I agreed that staying with the same lender is likely the choice, to keep all the funds and accounts properly managed in one place is one of the good things, at least I believe so.
Short answer – no to all your questions.
Longer answer – the banks don't care where you have your savings when it comes to the loan. When a lender talks about 'existing customer' this means lending not savings (in loan terms).
The benefits of having all 4 loans with one bank is that you have more negotiating power however its never that simple. You may be forced to put your loan with another lender because it doesn't fit the criteria of your current lender. There is also specific examples like CBA – once your lending goes to $1mil then it goes outside their DUA and they need Genworth approval which just makes things more complicated.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Thanks alot Shahin
There is no black and white answer – your banker or broker will need to structure your loans and put you with the lender thats suitable to your needs and this often includes the type of property you are purchasing and what you plan to do with that property.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
The only factors that prohibits an investor increasing his portfolio is a combination of lack of equity or lack of serviceabillty.
If these circumstances can be overcome then you can carry on purchasing.
Of course the appropriate lender choice can have a big bearing on your loan planning.
We are working with a couple of lenders that are offering blended loans meaning the investor can borrow 100% of the purchase price thru a combo arrangement.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I think you should keep your business trading accounts with a different bank. What could happen if you have a hard time and your accounts look bad – your bank could start to get worried. If you were going to try to get over this bad period by borrowing more money from the same bank then they would be even more worried.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Totally totally agree with Terry as you will be surprised what documents a Bank can pull out and show you that you signed them when you opened when times get tough in the business.
Just because the mortgage is upto date doesn't mean your home is not at risk.
Lenders seem to have selective deafness when you want to increase the overdraft for a week or two because you have a couple of slow paying creditors and they know you have no where else to turn.
Do yourself a favour and don't put yourself in that position.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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