Hi Guys.
Just wondering if anyone has had troubles with getting a LOC through commbank. I wanted to get a $60k LOC to leave sitting there until I find my next property. COmmbank want a contract first.
I dont want to do this because
1) I havent found a property
2) I dont want to wait to get funds incase my valuation goes down and my property isnt worth as muchI was under the impression you could get LOC’s to use as a buffer for emergencies. Is there any guidelines around this?
They advertise for personal use on their website. Thanks in advance
Hi Woody,
I wanted to get a $60k LOC to leave sitting there until I find my next property. COmmbank want a contract first.
Could it be a LVR concern – that there is not sufficient Equity in your place? e.g. if $60k is a bit tight, they might be wanting to cross-coll your PPOR with a new IP (don’t do that !!).
Or, is it a DSR concern? Are they wanting to see extra Income from an IP in the equation?
If you are able to share a few more of the “numbers” we may be able to help more,
Benny
Hi Benny. Thanks for reply.. I think their concern seems to be what I may use it for??
I didn’t think it mattered..Property val is 320k and loan is 230k.
Just wanted a line.of credit to bring me up to 90% LVR
Serviceability isn’t an issue
A few reasons…you really need to work with the banks policy and plan rather than aimless apply for the loans/LOC
1. If you go past 80-85% LVR ( ie your 90%) the use of funds MUST be proven either form
– Sale contract
– Letter from accountant/ financial adviser
– Quote for renovations etc..At over 80-85% your limited to Max 20% of the property value as cash out only.
2. Regarding serviceability if you say your using it to purchase another IP…than they will need to make sure you can afford the 2nd loan as well.
Note every bank as diff cash pout policy.
You speak to any investor and they will probably tell you they got cash out of $50,000 – $150,000 with no issues…it’s all about planning for the right lender for the right use. CBA tends to be an average lender for cash out purposes ( if you dont want to give any proof)Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
If your want to stick with CBA, if they ask for proof for a 60k cash out…it sounds like your serviceability will pass their calculation but it’s weak…ie low-average income.
If you wanted to stay with CBA, consider a lower cash out and than increase it later when you find a place…not idea but not much you an do now if the credit assessor has asked for this requirement.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi MIck.. Thanks heaps for that. I was thinking it was something along those lines although they never advertise their full details (that I could find) online. That helps heaps though.
Is this all to do with who their reinsurer is and their guidelines?
I thought commbank self insure quite a bit of their deals?
Do you think you will buying a property in the near future? The valuation on the property is valid for 3 months, so if you do happen to put something under contract in that period of time, you don’t have to be concerned about your val decreasing and reducing the amount of funds available to access.
I find a number of lenders will accept a signed stat dec stating the intention of the funds is to purchase an investment property at circa x price, y rent. It’s a coin flip, but can get these deals over the line without a Contract of Sale.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hi Woody
This all comes down to the LVR.
If the LVR is less than 80% then there’s no restrictions. I’ve recently carried out big cashouts for forum clients with no hassle.
Above 80% and CBA will want to see “evidence” of what the funds are being used for.
Not all banks have this requirement.
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]
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