Question regarding how banks might view duplex?

Hi all

I have a duplex with ANZ, I am at the end of the process to strata title them. Plans sealed. My question is I have one loan for both. Will the bank want to split the loans, one for each? I want to sell them & will be doing them one at a time.

Appreciate any thoughts on this.

Stacey

 

You may want to do that now to avoid them managing the issue. Splitting the loan may mean they wont apply proceeds on sale to the properties jointly. If you decide to hold one a little longer it could affect deductions and options. Broker should advise on ensuring the two splits arent crossed too.

 

Thanks Paul, I may not have much say in the matter with the bank. The Vals came in short with the strata title, less than the current loan. I'm abit concerned if I sell one the banks might be able to not let the sale go through? I would assume they will do a val with remaining unit & try to get me to come up so it's at normal LVR?

 

ANZ are quite conservative in their approach to duplexes. Generally a lender I'd avoid for this type of property.

This is what Paul & Rolf have alluded too. If the loans are structured properly, this won't be a problem.

 

The bank won't want to split the loans. All they are concerned about is that the security is enough for the debt so their default position will be to cross collateralise with one big loan.
Your ideal should be to do the opposite probably, split the loan and have one property securing one loan.

 

My problem is that the valuation is less than the current loan. Even before I initiated to separate the units, the val was less than the current loan. But as the bank has held the loan for a number of years, they haven't had a reason to do a val.

I should be able to sell at a price substantially higher than the valuations, but wondering how the bank will view it once the first sale is triggered.

 

I don't know how it works internally, but would have thought the bank would want to do a valuation when they consent to new titles being issued. Not sure if they could withhold consent - they could but not sure if they would.

But if you got to the stage of selling one they would take the proceeds probably paying down the remaining loan t0 80% LVR

 

Rolf is in your neck of the woods, have a chat with him. He can get an alternate valuation. If that's suitable, the loans can be restructured to actually fit your overall plans, taking into account the end result.