Join Australia's most dynamic and respected property investment community

LOC v new loan

Discussion in 'Property Finance' started by Itsme, 23rd Sep, 2015.

  1. Itsme

    Itsme Member

    Joined:
    21st Jun, 2015
    Posts:
    9
    Location:
    Qld
    Evening all

    I have just had a val carried out on my ppr to release some equity for the next purchase.

    I have a ppr mortgage with nab and an additional loan for investment purposes. Both loans have offset and are secured by my ppr. The plan is to stick with nab for this additional release of equity and increase the loan amount for investment purposes. I like the service I get from my private banker.

    My other IPs have loans with Macquarie.

    Does anyone feel a line of credit would serve better than an increased loan amount?

    Thanks in advance.
     
  2. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    641
    Location:
    Sydney
    Ensure the loan/equity release is a separate facility and not a top up. I would prefer a term loan as its generally cheaper than a LOC and it doesn't carry an on demand repayable clause.

    Just be wary of NAB's new (and crappy) cash out policy.
     
  3. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
    I would see a great finance broker just to make sure your getting the best deals and structure for your overall portfolio. Just my opinion.
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,140
    Location:
    Canberra and Sydney
    I haven't received the alert yet. I assume it's the same as Choicelend (advantedge)?

    Cheers

    Jamie
     
  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,091
    Location:
    Melbourne, Nationwide
    Anything over 80% LVR or an amount over $100k requires direct evidence.

    Direct evidence might be a COS, invoices, financial planners written advice, etc.

    I'll forward you guys the email shortly.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,140
    Location:
    Canberra and Sydney
    Ok - so same as Choicelend's policy. Capping it to $100k for sub 80 is silly.
     
  8. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    853
    Location:
    Sydney (West) and Canberra
    Over 80% wasn't really anything new - i've found that their credit team have been doing that for a while anyway, whether it was explicitly stated or not. The 100k part is annoying.
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,140
    Location:
    Canberra and Sydney
    Not sure if I've been lucky but I've never had to produce written evidence above 80% - it's always been done based on my notes.
     
  10. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    853
    Location:
    Sydney (West) and Canberra
    Didn't up until March or so, but since then >80 deals assessors usually asked for it. I had it to about 5/7 deals high LVR equity releases.

    They've asked for it <80 in the past once or twice too, NAB assessors work off what the risk rating the computer shoots out at them. If its rated a higher risk they ask for more. Chances of it being risked higher is greater above 80, so its probably why i had it.

    Usually i don't go to them early in the portfolio anyway - except when i need them for a 90% no genuine savings deal. Also adds more likelihood of assessor requesting verification (riskier).

    Cheers,
    Redom
     
  11. Richard Williams

    Richard Williams Buyers Agent - Southeast QLD Business Member

    Joined:
    9th Aug, 2015
    Posts:
    471
    Location:
    Loganholme, Brisbane
    Hi what is an on demand repayable clause ...?
     
  12. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,140
    Location:
    Canberra and Sydney
    They could demand you pay back the loan without notice
     
  13. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,957
    Location:
    Sydney
    They would probably give notice - but about 14 days to a month. Not enough time to refinance perhaps - or sell.