Increasing LVR on existing Var OO loan, what documents needed

Discussion in 'Loans & Mortgage Brokers' started by thydzik, 23rd Jun, 2021.

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  1. thydzik

    thydzik Well-Known Member

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    I've currently got an OO variable loan around 60% LVR, if I want to increase this back to 80% and use the funds for renos/shares/personal expenses how easy is this, how much info do the banks need to know of my intentions with the money?

    Thanks in advanced
     
  2. standtall

    standtall Well-Known Member

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    Full assessment - they would need everything they asked for when you got the original loan!
     
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    It's a new loan application. Lenders will require full financials, such as payslips, bank statements, rental statements, etc. The specifics depend on the lender.

    They'll also likely want to know what the funds will be used for and may require supporting documents to that end.
     
  4. thydzik

    thydzik Well-Known Member

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    thanks, I should have mentioned, assuming that the serviceability is OK.

    What do they need in terms of what you will use the money for, like what documents need to be shown for renos/shares or personal expenses?
     
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Most lenders will simply take your word for it if it's under $50k, but there are some that will go higher.

    It really depends on the specifics of what you will actually use the money for. A general breakdown of costs is often fine. For larger amounts quotes may be necessary.

    Get specific advice.
     
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  6. thydzik

    thydzik Well-Known Member

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    thanks, that's helpful.

    would any banks be keen if you said you want to start share trading $200k?
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    generally not so keen. You might be asked for evidence such as a statement of advice or a letter from an accountant - which an accountant could not give!
     
  8. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    It's a big ask. If you were going to lend a friend $200k for share trading, ask yourself what you'd want to see from them (assuming you know they can afford it).

    Some sort of formal advice, or a solid track record demonstrating experience over an extended period would be necessary.
     
  9. thydzik

    thydzik Well-Known Member

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    thanks again.

    it's somewhat different though to lending to a friend, as they still have the mortgage with a LVR less than 80%

    but anyway, thanks all for your replies, I guess I'll have to see at the time.
     
  10. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    It's really not that different. They do their sums and they know you can pay it back, but they'll want to see that you're going to use the money in a reasonable and responsible manner.

    I've lent money to friends to help them buy a house, but I wouldn't lend it to the same person to buy Bitcoin. They may feel that Bitcoin is a good investment that they'll make money off, but it's way outside of my personal risk profile, and even further out if they've had no prior experience.

    For $200k you're going to have to make an argument to the bank. Approaching it from that perspective will be a good start.
     
  11. Lindsay_W

    Lindsay_W Well-Known Member

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    Yeah, some banks are better at this than others.
    I have had much more than $200K cash out released with no evidence required, just a brief explanation, certainly wouldn't tell them it's for shares though as it opens a can of worms...
     
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  12. MC1

    MC1 Well-Known Member

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    Some will take a stat dec
     
  13. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    Depends on how much us the actual cash out amount.

    Some banks do it better then others, some banks don't like it at all.

    More importantly is the purpose of the cash out, if the reason is for shares then its pretty much a no go.

    It will be a brand new application and valuation needed.
     
  14. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Who is the lender pls, that will simplify it a bit

    ta
    rolf
     
  15. David Hui

    David Hui Well-Known Member

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    Worth a chat with a broker to fine the right solution and also a good chance to review your current lending as their may be a better option.
     
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  16. thydzik

    thydzik Well-Known Member

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    Thanks all for the replies. It seems that there are options available, which is good.
    I'll get in contact with a broker when ready to proceed.