How to grow a multi-million dollar portfolio on an average income in the new lending environment

Please to second Redom's vote of confidence in Euro73. He is an exemplary person with whom to do business, and I would unhesitatingly recommend his services, both specifically in NRAS and more generally in mortgage and finance broking.

Cheers
Greg

 

The smaller lenders don't make it easy :-( cashouts can be a PITA and having a pepper hit on your CRAA can also give the credit assessor a nervous twitch.

Realistically - it's going to be incredibly tough for those on average/low incomes to get themselves into millions of debt.

The actual repayment calcs of the old lenders were one thing - but when you couple it with their "relatively" flexible policies and LMI DUA's, you were able to map out a sound plan and have confidence that it was achievable.

Relying on the likes of pepper, homeloans, etc these days doesn't provide me with a lot of confidence. I'll certainly use them where needed - but I suspect they'll follow the path of other lenders down the track (changes to servicing calc, etc).

Cheers

Jamie

 

Extremely hesitant to use Pepper for prime clients at this time - as Jamie has alluded to the hit can set off red flags. I've had LMI heavily scrutinise refi deals for clients which had an old Pepper hit from 3-4 years prior.

 

Can you just draw equity out and let it sit in the offset account? Last time I heard from a BankWest Banker that you can't really have the equity sitting around as a free money unless you have found the 2nd property and have put in a 2nd loan application for it....is this not true? Or just something that's specific to BankWest only? Thanks

 

Possibly true for a bankwest banker.....but not true for other lenders.

Cheers

Jamie

 

Witg BW look to Set up the equity as a seperate split with redraw. Can sit there as long as you like.

 

Separate split with redraw? Do you mean line of credit?

 

Can be a normal term loan - just an interest only, variable loan.

Bankwest + investors don't mix. Not a good lender to use if you plan on purchasing multiple properties.

Cheers

Jamie

 

Hi Jamie,

Thanks for your prompt reply. I see what you are talking about, but apparently BW won't cash out any equity unless you are ready to submit a second loan application with a purchase contract.....but all I want really is just to draw as much equity as possible given the current climate of lending....nevertheless I am not an aggressive investor as such...

 

Another loan account. 30 years. IO. Variable. Available redraw when needed.

 

Not true. You can access equity as cash out. As above. For Future investment or to use against another property reno/develop etc.

 

Right, thanks Ace. I will try a different banker next time then.

 

If the LVR is above 80 then that's likely to be the case.

If it's below 80 - and your current loan is variable.....and they still insist on a second application, politely tell them you'll be taking your business elsewhere. Refi to a lender conducive to investors and get on with it. Bankwest aren't easy to deal with.

Cheers

Jamie

 

Right, this makes sense then! The banker at the time was talking about crossing both loans so that 100% of the IP would be tax deductible. Even though I told him that I would prefer to keep the two separated, and that besides the cashouts, I should have enough anyway for a 20% deposit on the IP. Obviously he wasn't really listening to what I was telling him.

Really appreciated of your replies. Jamie

 

My pleasure.

Don't use cash for the deposit/costs - you'll lose your savings and tax deductions.

Moving away from BWA (it rhymes!) might be a good option to explore.

Cheers

Jamie

 

One thing that has been missed by many is that AMP still has a very strong niche for investors, provided you are using a PPOR security

If that is the case, AMP are still lending for INV purposes. They are shutting down INV loans secured against INV properties, but they are still very very open for business for INV debt secured by PPOR properties.

They allow cash out with no questions asked, to 85%. If anyone is thinking about pulling equity from their PPOR, I'd be seriously, seriously considering the AMP Master Limit option. See below

By now, most of you should be aware of AMP’s announcement in reference to Investment Lending. One of the key message here is that AMP Bank will not be accepting any new investment property applications including no new SMSF applications.
This is expected to last until later in 2015, depending on market conditions.
This means AMP Bank will only accept Owner Occupied security applications until further notice.

****Please note, AMP Bank will still allow investment purpose applications providing the security provided is owner occupied. Therefore we can still offer Interest Only Loans against Owner Occupied properties at new rates below.

Remember, we offer unlimited "cash out" up to an 85% LVR for future investments purposes (No documentation required)

AMP Professional Package (Owner Occupied)

This offer includes $1,000 Cash back on loan applications received between 29 June 2015 and 30 September 2015 (must settle by 30 November 2015 - loans must include a variable rate term loan that will be linked to an Offset Deposit Account).

Loan Amount $750,000 and above
<80% 4.12% pa
> 80% 4.35% pa

$250,000 to < $750,000
<80% 4.23% pa
> 80% 4.45% pa

 

Has anyone heard if ANZ are going to offer 85 No LMI on PPOR soon?

 

Question. Does the Homeloans Ltd product funded by Pepper show up as a hit by Pepper or does it show Homeloans Ltd.

Very reluctant to use this option if it is the former.

 

Homeland Classic will pop up as Homeloans and QBE (it is insured).

Homeloans Accelerate is Pepper. Accelerate has a slightly better servicing calculator and is not credit scored. For those that have shopped around during the APRA changes and cannot find credit, they're likely to fail passing through Classic.

 

Thanks Rendom got that bit.

My question is does anyone know if it comes up as a Pepper hit on the applicants CRAA or a Homeloans hit?