How to Keep Borrowing even if Banks say No??

Anyone solve have this problem? Did you solve the problem?

My solution was RAMS lo doc


MTR

 

My solution was RAMS full doc...

 

The banks are suddenly clammed up tighter than a nun's... uh. I haven't had this problem so far, RAMS sounds like it would be a good option.

 

Just out of curiosity what rates have you managed to get from RAMS?

 

My solution was having an expert broker who knows lender policy inside out. You don't know what you don't know

 

Could always borrow from fat tony. Just don't default.

 

Rates are high compared to the big 4 - but you don't go to them for rate, you go to them for product.

 

The bank of mum n dad or the bank of nan n pop (not applicable in the Druitt due to reduced life expectancy).

 

hahahahah the moment i saw your name (haven't read your message yet) I thought there will be some smart-ass comment here

 

If the banks say NO, they have likely done an assessment of risks, and know whats coming in various markets. Get you low-doc, no- doc. But don't show up on ACA in 3yrs going "I only has $50k income, how could the banks lend me $1.2m. I fudged the numbers, and boosted income, how did the greedy banks lend so much to me". I want compo, wahh.

 

How's RAMS compare with firstmac/ liberty in terms of their servicing calculator?

 

Better than FM, worse than Liberty under 80%, but better over 80%.

 

My solution was to take a break from buying more, save up, wait and go again later. I have lost track but I think I have done this 3 times now.

 

Use more cash from the stash.

There's usually a very good reason banks say no (if you've approached multiple), so that should serve as a warning.

 

I would have thought in the Druitt you could have made it bank of great-grandma n pop and great great gandma n pop - cos, you know, great great grandpops 70th birthday is this year.

Average generation gap in the Druitt is 13years isnt it?



Blacky

 

I do agree with this to some extent, however I think there's an important caveat. Many experienced investors do know their limits. The banks are diving right into "cover our butts" mode, so are reluctant to lend, but part of this is that they have engaged in so much poor lending, to people without knowledge, experience or sense and they mostly cater to the market as a whole rather than assessing individual risk. In Ireland this effect was huge, and really inconvenient.

I feel banks actually slowed the rebound in Dublin because between 2009-2012 or so, they just weren't comfortable lending, had huge restrictions etc (they may have even accelerated the crash). Lots of buyers who'd been priced out of the market found themselves unable to buy, and lots of investors who would have liked to swoop in and pick up the pieces found it hard to do so (which is why if you do think a correction is likely, cash is king - plan ahead). One positive is this helped cause rapid rental growth in in-demand assets like detached houses, but still...

Banks went from the la-di-dah 100%s loan shower stage to hiding under their bed in a lead-lined panic room in a nuclear bunker almost overnight. As the bubble got very close to bursting, politicians and banks seemed to all get ready to pass the buck to one another, and the bank's method was "look how responsible we are, we never lend irresponsibly, it's not our fault". Honestly for a year or so people were vying for blood - angry people, desperate to blame anyone.

In reality the bubble was everyone's fault. People like to point fingers at banks, politicians, central bankers, brokers, investors, buyers, the media - but honestly it's everyone's fault and no ones, and as much the fault of most bystanders on the street as investors. Bubbles are a collective psychology. They are exclusively driven by group think and you can't have the group think without the group. The poor first home buyers and renters - the traditional "victims" of bubbles - hold the same FOMO, prices-will-always-rise attitude as everyone else. They don't get a free pass. They've salivated over The Block, they've seen property as a "ladder" (which uh, do go down), they've ignored market fundamentals, they've fed the national obsession too in attitude and culture, if not in practice. In fact you could argue it isn't even possible to be blameless in a bubble - few people think they'll ever burst (I'm guilty of this 'normalcy bias' too, hell I've been in a market crash and still doubt the outcome of this one, go figure) and this collective positivity and blindness to fundamentals is the bubble's support structure.

I got a bit sidetracked there... my point is, reactionary lending policy is a blunt instrument. People should know their own limits, and assess them rigorously (but also keep in mind a lot of inexperienced investors don't know their limits). If you're sure it's the right time for you to borrow despite being knocked back by another bank, have at it.

 

My solution was get a new job,earn more and keep doing what I can on the side. I haven't yet hit the wall of what nab will lend me now. But they have pretty much told me when I do I can just do commercial instead.

 

I would argue maybe not, and some just get carried away. Did the Moloney's know their limits, when they invested widely in mining towns, and were praised by market experts with API "Property Investors of the Year 2012". No, they were on 60 minutes later blaming the banks. Yet these actions were rewarded by an industry of "experts", and experienced investors.
Investor of the Year now $3.5m in the red
Did share investors know their limits, before margin lending just before the GFC, no.

Human nature takes over. Property markets go up, so people refinance, get more, and more.
If the banks assess that you can't get a loan, then it should serve as a initial red flag, not to go shopping for more lax lenders that will lend you the money. And especially when we are coming of extremely low interest rates into a period over the next 3-4yrs of rising interest rates.

 

Perhaps you're right. I think few ask themselves "is my investment plan truly based on fundamentals, or is it based on past growth performance and positive sentiment"?

 

Indeed. Our broker (for our latest purchase), looking at all our offsets cash, and cash stash, asked why we weren't getting more in Sydney (she has just gotten 3 more). SEQ (what a waste apparently) Like they say, when cabbies, and shoe shine people (and every mum and dad, talk property), then the gig is up. How much is now fundamentals, and how much is crazy sentiment at such low low interest rates. People we know now getting 3.5-4% yield's in St Mary's. Hey, but as long as the banks gave them money, right!
So go low-doc, no-doc, if the banks turn you down, but don't come complaining in 2019/2020 after the market has turned down.