Mortgage held with ANZ, using property equity to borrow with NAB - legit??

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darkness72
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@darkness72
Join Date: 2013
Post Count: 51
January 19, 2015 - 1:50 pm
Hi,
Just wanting to verify…
1. If I have a property (A) with a loan / mortgage with the ANZ.
2. My mortgage broker is using the equity in the property (A) to get a new loan from NAB to buy a new property (B).
Q. I assume this is all ok? …..leading to
Q. As its just the equity in the property (A) that I’m using for new loan (B) is that why ANZ are ok with this and its all legal?
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
January 19, 2015 - 1:52 pm
1. Yes – it’s fine.
2. Why would it be illegal? It’s your equity – you don’t have to use ANZ to fund the next purchase. You can use whichever bank you like.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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Kate Ashmor
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@kateashmor
Join Date: 2015
Post Count: 20
January 20, 2015 - 11:11 am
If you are obtaining a second mortgage, the first mortgagee will probably need to consent: this is a standard condition of mortgage contracts.
Kate Ashmor | Ashmor Legal Pty Ltd
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Property Lawyer and Opiner
wilko1
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@wilko1
Join Date: 2010
Post Count: 510
January 20, 2015 - 2:19 pm
Some banks don’t like 2nd mortgages. It’ll be that you are taking a line of credit out with anz and then use that money to find the deposit, with the remaining finance coming from NAB.
CBA are one of the banks that will go 2nd in line on a mortgage. Most banks policy is to be 1st and 1st only.
- This reply was modified 9 years, 11 months ago by wilko1.
JA
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@ja10
Join Date: 2015
Post Count: 1
January 23, 2015 - 7:45 am
Careful..the banks are tying up one property with the other by doing this. My accountant recommends against it for various reasons. Get professional advice. JA10
Richard Taylor
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@qlds007
Join Date: 2003
Post Count: 12,024
January 23, 2015 - 9:49 pm
Sorry Wilko that is not correct.
All the big 5 Banks will take a 2nd mortgage.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Corey Batt
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@cjaysa
Join Date: 2012
Post Count: 1,010
January 23, 2015 - 10:04 pm
I’d think this wouldn’t be a second mortgage guarantee situation, but an equity access followed up with purchase finance with NAB secured solely to the new purchase. This is standard fare and nothing to be concerned about.
Corey Batt | Precision Funding
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Investment Focused Finance Strategist - servicing Australia-wide
Jamie Moore
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@jamie-m
Join Date: 2010
Post Count: 5,069
January 23, 2015 - 10:29 pm
Corey Batt wrote:
I’d think this wouldn’t be a second mortgage guarantee situation, but an equity access followed up with purchase finance with NAB secured solely to the new purchase. This is standard fare and nothing to be concerned about.
Yep – that’s how I’ve read it too….and the basis for my response. Quite a normal structure.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
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Mortgage Broker assisting clients Australia wide Email: [email protected]
TaylorChang
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@scha9799
Join Date: 2009
Post Count: 234
January 24, 2015 - 10:27 am
I did it before.
Nothing wrong, a broker set up for me.
TaylorChang | Finance Broker
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Walking to run
Participant
@alisdair-horgen
Join Date: 2014
Post Count: 68
January 29, 2015 - 12:42 am
Piggy back to this.
I often wonder how the loans work on this. I have yet to do it.
House A. $500,000 value $250,000 owed. $250,000 equity. I reuse $100,000 for property B deposit.
House B. $500,000 value $400,000 owed.
Am I paying interest in that $100,000 equity that I assume is a line of credit or similar? If so what’s my total net worth? Is it still $250,000 equity just split $150,000 and $100,000 now?