Loan Restructure and refinancing advice

Looking for suggestions/ advice. Thanks

My interest only terms on numerous investment and OO loans with CBA are coming to an end soon. Contacted my broker who suggested we try and refinance with an alternative lender (White label product). We submitted the application but due to APRA /royal commission changing regulations and calculators my application was rejected on the basis of affordability.

I've been asked to contact my bank (CBA in this case) to see what they can offer. What are your experiences with this sort of situation in dealing with CBA and any advice on whats options may be available from experience. Thanks

 

Why submit if it didn't service?

How much does it fail by?

 

It did service with the broker but I was made to understand that the credit approval people did not accept certain things.

 

Your broker should be best placed to understand what your options are if they have full transparency on the servicing shortfall and/or policy challenges. You should be consulted on these pieces prior to submission by the broker.

CBA will require a full assessment to extend an IO period so you would need to understand the detail around the challenges so you can ensure it works with them.

 

Thanks .
If I have to change to fixed interest term P&I with CBA would that be a straight forward move or will that also require a full application . I’m currently on a variable rate with them . Thanks

 

That is easy done - you should even be able to do it through Netbank

 

Is CBA relatively flexible with fixed P&I rates ? I’m currently on a 3.89% variable rate investment interest
Only . Thanks

 

Fixed P&I INV will be substantially cheaper
Home loan interest rates - CommBank

You should be able to get a substantial discount on variable INV P&I as well with a new pricing.

 

Arggh that's frustrating. Nothing worse then having a credit assessor use different numbers.

Is there anyway you can improve your borrowing capacity? Reduce credit card limits, consolidate debt, extend loan terms, etc?

I doubt CBA will extend the IO term without the need for a full application.

Cheers

Jamie

 

Thanks

Ive given CBA a chance and they have come back saying i'm eligible for an interest only extension on my investment loans. However will need to spend a hour going through some income and expense questions. So lets see how that pans out.

As regards OO ive been offered a rate of 2.7% variable on P&I .

 

Irrespective If the broker did the calcularions wrong or thr bank didn't accept certain things.

There actually hasn't been much changes directly APRA/RC the last 12 months (for the worse that is). Thus using that excuse is a little "how you going".

 

That's because they are checking serviceability again, depending on when you last applied this might pass or might not. Not extending the loan term (back to 30 years) will mean that serviceability is calculated on the remaining (shorter) P&I term as well.

 

Update:

After spending over an hour with CBA on the phone basically going through what i think was a new application, the system generated that I am not eligible for an extension for IO. So in a rush what i did was agree to move to P&I with them for a fixed period of time. In hindsight should have looked at other options as now paying back a substantial amount of capital on invest properties which i would rather use to pay off the PPOR.
Unfortunately did this all on my own as broker had said that i had run out of options as connective had declined the application on affordability.

 

TBH, you should probably have got a second opinion from another broker before fixing. Wouldn't hurt to do it anyways - you can probably get out of the fixed if moving is possible with just a small cost.

 

Pays to get a second opinion sometimes, shame the broker didn't advise other options/alternatives to connective (connective are not the best for serviceability)
Thanks for coming back to update us!

 

If only I had gotten a second opinion back in 1991 when my first loan application was rejected...

 

Thanks Jess. May get another opinion .

 

Thanks Lindsay. The broker to the contrary said connective was one of the best for serviceability and interest only options .

 

More evidence that a second opinion was necessary here, they're not the worst but certainly not the last option I would have looked at.

 

Out of interest would a second opinion have a financial cost as there would be time spent working out if the refinance on interest only basis is possible.