Mortgage. Is it hard to change type OC to Investor type?

Discussion in 'Loans & Mortgage Brokers' started by Illusivedreams, 7th Feb, 2019.

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  1. Illusivedreams

    Illusivedreams Well-Known Member

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    Hey financial team

    Have a friend asking if it's hard to change from owner occupied loan to investor and vice versa.

    This is post fact. So loan in place ?

    Tax implications aside purely from intrest rate and bank prospective.
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    It can be.

    Some lenders want to re-assess servicing. Others have quirky systems that won't allow it - for eg, you can't change from OO to INV with CBA without rewriting the whole loan.
     
  3. Rex

    Rex Well-Known Member

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    So what happens if you move out and rent the property but don't meet serviceability when the loan needs to be rewritten for investment? Do they block it and leave you on the OO (cheaper) rate? Do they theeaten to foreclose on the property unless you move back in? Sounds wacky
     
  4. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    if he is actually living in the house which is used for the loan security it can be possible to switch the rate to owner occupied upon proof of residence.
     
  5. JohnPropChat

    JohnPropChat Well-Known Member

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    Why even bother with changing from OC to INV? Most banks find out anyway and start charging investment rates
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If you want to have more than 5 yrs IO - some lenders will let you roll over with a phone call but if the property is on their books as an OO they'll limit it to 5. Not an issue if you can refi, but if servicing or vals are an issue it can put a spanner in the works.
     
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  7. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    They just leave it OO. But for an investor it limits the IO term available.