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Lenders easy on cashout

Discussion in 'Property Finance' started by Xsi, 30th Sep, 2016.

  1. Xsi

    Xsi Member

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    Hopefully brokers can answer this one. Which lenders would you say ars easy/relaxed with their cashout/equity release policy for an existing loan? I know some lenders require a fair bit of paperwork and reason to release any equity(ie require proof of what the extra funds are going to be used for or need the next IP loan to be taken out with them as well).

    Thanks in advance.
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Is the purpose of the cashout to use as deposit on another property? Or whats your plans with it? And what LVR do you plan to go to?

    Based on that someone might be able to point you in the right direction.
     
  3. Xsi

    Xsi Member

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    It could be for property or shares. I am trying to find lenders to whom I dont have to specifically prove what I need to use the extra funds for.

    Lets us say that LVR is under 80% even after the cashout(ie no LMI involved)
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Depends on the LVR and the purpose of funds. NAB for instance want to see a contract of sale for loans over 80% - just doing one now.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    And the amount - the larger it is the more difficult.
     
  6. Xsi

    Xsi Member

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    Hi Terry, will the new loan need to be with NAB as well?
     
  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    All loans secured by the property need to be with the same lender.

    Most lenders have a reasonably flexible approach to cash out for LVRs under 80%. Above 80% LVR you'll see some serious restrictions with almost all lenders.

    Less than $200k is fairly easy, above that is certainly possible, but it gets harder.

    Almost all lenders now require a full application (or the equivalent) for any increase.
     
  8. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Sub 80% cashout is generally a lot easier than above 80%. Some of the best lenders in this space have no restrictions on sub 80%, others still have OK policies which will allow you to release up to x amount (250k without documentation with NAB for instance).

    Depending on the security, serviceability etc will depend on what lender is appropriate for this kind of deal.
     
  9. Xsi

    Xsi Member

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    Sorry, I didn't explain myself properly there. What I meant by new loan, is loan for purchase of next IP. For example, can I get equity release on IP1 with Lender A that acts as deposit for IP2(LVR still under 80% and amount under 200k) and get 80% loan for IP2 with Lender B. My question was basically to see which Lenders(ie Lender A) will allow equity release for such a request. Also,using the same example, what if I need say 100k equity released by Lender A to buy shares instead.
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Not necessarily.
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Subject to their general borrowing criteria, most lenders would allow this type of equity release.
     
  12. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Under 80% and most lenders (the majors in particular) will be ok with large cashouts. NAB will restrict it to $250k without sufficient evidence (contract of sale for instance).

    AMP are a pretty good in this space too.

    Cheers

    Jamie
     
  13. Xsi

    Xsi Member

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    Thanks all for your responses.
     
  14. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Recently had a 90 % lvr cash out approved at WBC for near 500 k.................

    sometimes u get lucky

    ta

    rolf
     
  15. euro73

    euro73 Well-Known Member Business Member

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    AMP offers unrestricted cash out to 85% LVR - no questions asked.