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ING - No more cash out ( ON IP) and no more discounts and max Rent

Discussion in 'Property Finance' started by Mick C, 29th Jul, 2015.

  1. Mick C

    Mick C Well-Known Member

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    A few changes with ING which i will summarize....

    1. No more cash out for property that's secured against an IP

    2. Max 70% of gross rental income taken for servicing

    3. No more discount for NEW investment loans ( so rate will be from 4.72% @80 LVR)...existing are not effected

    4. Old ....but max 80% LVR for NSW IP


    NOTE: Cash out is the next one to go with most banks...so take out what you can especially on your IP.
     
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  2. tobe

    tobe Well-Known Member

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    Interesting they are restricting debt consolidation for owner occupiers as well. The only equity release they will do is for home improvements for ppor properties.

    This is new.
     
  3. Tranquilo

    Tranquilo Well-Known Member Premium Member

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    Mick 1. - do you mean no equity releases for IP
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Yep - basically no cashout for IPs.

    Cheers

    Jamie
     
  5. KoopaTroopa

    KoopaTroopa Active Member

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    I'm slightly confused.

    Right now I have 3 accounts

    Orange Everyday - regular transaction account
    Orange Advantage 1 - PPOR loan which the Orange Everyday is an offset for
    Orange Advantage 2 - IP Loan, current owing is something like $290k, with available bal $18k

    Are you saying I can't "withdraw" this $18k and use for further investment?

    I'm obviously not talking about an equity release, it's available from the account...
     
  6. almostthere

    almostthere Member

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    No more cash out ( ON IP)

    This is really biggg. I just hope other lender doesn't follow this..
     
  7. KDP

    KDP Well-Known Member

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    It may mean you have to keep jumping between different banks to release equity.
     
  8. jaybean

    jaybean Well-Known Member

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    This increases risk, it doesn't diminish it. These policy makers are clueless. YES someone could cash out and blow it on stupid things, but stupid people are doing to do stupid things with their money anyway. Why take away this safety net from responsible investors. Sigh.
     
  9. Dazedmw

    Dazedmw Well-Known Member

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    How is this so?
     
  10. jaybean

    jaybean Well-Known Member

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    When you hear of people going bankrupt, have you ever heard the saying "he was asset rich, but cash poor"?

    If you're stretched but have a portfolio that's doubled, that's all well and good but the money is "stuck". If you hit a rough patch, ideally you'd have access to some of that equity to keep the lights on. Imagine having $1m in equity, but losing it all (or being forced to sell at a bad time) because you couldn't pay a few thousand dollars in interest. It's never a bad thing to have too much liquidity. By preventing people from being able to access this equity, as I said it only increases risk, it doesn't diminish it.
     
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  11. RetireRich101

    RetireRich101 Well-Known Member

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    I don't think you will have a problem 'withdrawing' this $18k that is currently sitting in a regular transaction account that is offset to your IP Loan.

    Whether you can use this $18k to buy another IP investment is an another question, as it is subject to today's borrowing conditions.

    Over my dead body, if Lender can stop/influence the money you can withdraw form your offset/transaction account, but Banks seem to make the rules as they go along...
     
  12. Dazedmw

    Dazedmw Well-Known Member

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    Thanks.

    I agree it increases risk to the individual but I have my doubts that this scenario outweighs the systematic risks of private debt growing at the pace it has been.

    It does strike me that all these moves by APRA have the risk of being pro-cyclical and if the risks are real they may have left it too late.
     
  13. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It won't impact on your redraw - you can pull that out BUT if you wanted to set that $18k up as a new loan split for taxation purposes they'll prob say no.
     
  14. Till Kingdom Come

    Till Kingdom Come Well-Known Member

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    That's the problem when you overstretch yourself without a proper backup plan.

    Oh boy it's gonna end in tears.
     
  15. Till Kingdom Come

    Till Kingdom Come Well-Known Member

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    This is further evidence that smaller banks are reacting to the APRA 10% threshold. APRA data shows ING has about $9bn of investment loans but is not growing above the 10% limit.

    Their move looks like preemptive action to avoid a flood of applications as investors seek loans from smaller players in response to the majors throttling back.
     
  16. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Haha - there will be no rush - no-one with more than 1 IP would service ;)
     
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  17. OC1

    OC1 Well-Known Member

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    I think TKC is over reacting more than APRA.
     
  18. Till Kingdom Come

    Till Kingdom Come Well-Known Member

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    OmG the sky is falling.
     
  19. Andrew H

    Andrew H Well-Known Member

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    Can't you just pull the money out and say you are doing it for a reno or something else, even with a loan split set up. How do they know you'll use it for an investment property if you tell them something else?
     
  20. KoopaTroopa

    KoopaTroopa Active Member

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    Thanks but that's not what I said. The $18k is not in my Everyday "offset" account. It's just there available in the IP Loan account.

    Thanks Jamie, this clears it up for me for sure.