Can a bank refuse a sale due to lack of serviceibility?

So can a sale or refi trigger a full assessment, and end up with the lender saying actually we want a repayment of $x.

if yes would it only apply where loans are xcolled, or just multiple loans with the same lender?

 

I've only ever seen it with a security substitution.
Other comments are around x-coll which would be a 'partial discharge' as security level changing.

Can't see any issues with a full discharge if it's only sole security.
That's now, in the future who knows.

 

They would just take the full proceeds IMO and then put you on a watch list. This is assuming the sale would be enough to pay down the debt to 80% or less of the remaining property values. If 90% etc they may stop the sale while they work out what to do / how to apply pressure to you to de-risk their loans.

 

I agree, I would not think that they would stop the sale as such, just that they could request the remaining loans be paid down to keep the LVR at an acceptable level across the total portfolio. Which may actually require more than one property to be sold off, so kinda the opposite of restricting a sale
Not an issue if all properties have experienced enough growth though.

 

I haven't seen a bank stop a sale, but I have seen them use funds from the sale to pay down other loans against the sellers wishes.

This is my number one reason why you should avoid cross collateralising properties.

 

Ive seen them stop a few sales not of my existing clients thankfully but I've had enquiries where it has happened to people. When the loan is more than the value of the property they are selling and they don't have cash for the shortfall.

 

I don't think they can stops sales, but stop the discharge of a mortgage which may prevent a sale from completion