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Loan split

Discussion in 'Property Finance' started by BenWa, 19th Oct, 2016.

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  1. BenWa

    BenWa Member

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    Hi all,

    When increasing a $220,000 CBA loan from 80% LVR to 90% LVR. Is the best way to create a new loan split of $24,000 + LMI with both splits (original and new) secured against the property?

    Cheers,

    Ben
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Both splits are going to be secured by the property, there's no way around that.

    As to should you split them, there's usually no harm in doing this, but it really depends on the circumstances of what the increase will be used for.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    What will the extra funds be used for?
     
  4. BenWa

    BenWa Member

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    It'll be used for an investment property, but with another lender.
     
  5. York

    York Finance Broker Business Member

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    In that case, split the new loan so the interest that is incurred on the new funds can be distinctively attributed to the new property and not mixed up with the existing one.
     
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  6. Brady

    Brady Well-Known Member

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    @BenWa if the funds are being used for a different purpose to the original loan - don't ask for a increase of the loan. Ask for a new loan to be completed secured against the existing property. Should be very simple.
     
  7. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    You only need to create 1 new loan split for 24k and the LMI will be aportioned pro rata over both loan splits.