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quick question NCCP

Discussion in 'Property Finance' started by Elives, 31st Oct, 2015.

  1. Elives

    Elives Well-Known Member

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    does the NCCP regulate margin lending? (i'm pretty sure it doesn't)

    also if i take out equity from my property to use for shares is this equity release regulated by the NCCP?

    Cheers,
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Schedule 1 of the NCCP

    "Margin loans

    (12) This Code does not apply to the provision of credit by way of a margin loan (within the meaning of subsection 761EA(1) of the Corporations Act 2001 )."

    =
    But it would apply for a loan against real property to buy shares.
     
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  3. Elives

    Elives Well-Known Member

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    my friend works as a home loan specialist for nab and says that if you take equity for the purpose of investing in shares that it doesn't come under the NCCP. i read some of the schedule 1 of the nccp and all i could find was this

    (iii) to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment

    (thats under the regulated section)

    i read this 2 ways.

    1. refinance credit that you used to purchase a property for (anything shares etc, pull equity out of property to buy shares etc)

    2. refinance credit that you are going to use for purchase, renovate or improve resi property.

    he mentioned something on the loan application that if it's for shares they don't have to tick a certain nccp box? (something like that)
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    That may or may not be the case - but why does it matter?
     
  5. Elives

    Elives Well-Known Member

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    i just found it interesting haha, and if that wasn't regulated by the nccp. then when you max your borrowing capacity but have heaps of equity maybe this is something doable? thoughts?
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You still have to access it. If a lender knows you will be borrowing to invest in shares they will generally be worried...
     
  7. Elives

    Elives Well-Known Member

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    good point, i thought it might be easier to do because it wasn't regulated by the nccp and there wouldn't be as many requirements compared to it being regulated by nccp?