Recent experience of refinancing

Discussion in 'Loans & Mortgage Brokers' started by seasky2008, 10th Mar, 2019.

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  1. seasky2008

    seasky2008 Member

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    I would like to share back my recent experience of refinancing for others' reference.

    My IP's IO loan with Nab is expiring later this year. Also, with Nab's recent rate interest hike, the IO variable rate was sitting at 4.49%, and that is not ideal.

    With a few major banks offering attractive rates and cashback, I have tried to refinance. Originally I was very concerned about the serviceabilty as I got to my maxi borrowing capability. Over the last one or two years I occasionally dropped into the banks to check how the home loan serviceability cal was going, and never got very positive response.

    This time around I was very surprised with my recent inquiries with CBA and Westpac, both of them allowing me to borrow the amount I needed; ANZ was the strictest in my case and couldn't meet my borrowing requirements. I ended up with Westpac because they offered better cashback ($2000 per property vs. CBA $2000 per customer) and the rates were comparable between these two banks. Westpac did ask quite a few bank transaction statements and for a long period of time (up to date statements for all acounts and credit cards for 6 months). But the calculation of living costs, and the rental income assessment were better than I thought. I believed they only used the living costs I quoted to them (appr $4300 per month for a family of five, which was not possible in Sydney), and the rent assessment reports (for two properties) came back with rent assessment slightly higher than the market rent we could actually get, and they didn't even ask for the rental agreements (with one place not even rented out yet).

    From my initial inquiry to approval, it took about 10 days, including the time I prepared the supportive documents and comparing back and forth between the two banks. The final documents were prepared and signed in about 2-3 days. After we signed the documents last Monday evening, the loan refinancing was done in 3 working days -- on Thursday the Nab loans were closed and the new loans showed up in Westpac system. Altogether, it took less than 3 weeks for the whole process.

    Overall, I got the impression the lending is easing, and people working in the bank or this industry (e.g., property assessors) may also relax their approach a bit, and the refinancing process is quicker.
     
    HUGH72, LoremIpsum, Ian87 and 3 others like this.
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    WBC likley used fast refi process here saving 3 weeks - especially with NAB as outgoing

    What are your real expenses, if they werent 4300 a mth ?

    ta
    rolf
     
  3. WattleIdo

    WattleIdo midas touch

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    helpful, thanks
     
  4. seasky2008

    seasky2008 Member

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    More like $8000 on average, though there are quite some discretionary spending such as travels, kids extra-curriculum activities that we can cut if under financial distress. Kids are expensive nowadays.
     
  5. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Fast refi and declared living expenses.

    The conundrum for lenders, brokers , borrowers is can we / should we exclude discretionary spending. The big banks besides ANZ have taken the view that they don't want to review line by line living expenses. If they all did that the economy would grind to a halt in a matter of weeks.
     
  6. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    ps sounds like you are cross collaterailsed!
     
  7. seasky2008

    seasky2008 Member

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    No, it is not cross collateralised. Funny enough, Nab called me today and tried to provide better rates to retain me. Anyone with experience of changing mind after the Fast Refinance, but before the formal title discharge? Can this be done and would that be a messy process?
     
  8. tobe

    tobe Well-Known Member

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    Ive seen it done. Very frustrsting as a broker. No real skin off as a client.
     
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Rather typical of NAB

    whats scarier is that borrowers often fall all over themselves to reward such behaviour................, meanwhile burning those that have made the NAB BS loyalty thing happen in the first place.

    Why would you even consider it ?

    ta
    rolf
     
  10. seasky2008

    seasky2008 Member

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    I really don't want to go down that option as it makes me feel bad after the efforts by the banker who is very nice. I am considering this, only after the refinancing was kind of done, I read posts in Propertychat, and realised the refinancing could have been structured better between me and my partner for tax efficiency -- to buy out my partner's share in the IP to increase negative gear.

    Even if Nab might match that, I may not stay with them. Just asking to get some idea.
     
  11. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    I suspect that needs more than a refinance................, likley a spousal sale with transfers and perhaps some likely stamp duty.

    U can clean that up after your refi and get some some specific tax advice

    ta

    rolf
     
  12. seasky2008

    seasky2008 Member

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    Yes, that seems to be the way to go.