Refinancing an option?

Discussion in 'Loans & Mortgage Brokers' started by fedex, 17th Feb, 2018.

Join Australia's most dynamic and respected property investment community
Tags:
  1. fedex

    fedex Well-Known Member

    Joined:
    9th Sep, 2017
    Posts:
    46
    Location:
    Melbourne
    I'm just asking for my dad. I know that it is sometimes possible ask your bank for a lower interest rate and I have done that before on his behalf when they were ripping him off like crazy (it worked). That said, the discount was not amazing and

    Is there a way to reduce the interest rate for my father? I'm am wondering if there are any options available to him such as refinancing. I know interest rate isn't the be all end all but in this scenario any discount would save him a fair bit of money over time.

    - He is single, unemployed
    - He has 2 properties worth ~850k-950k based off comparables
    - Both are rentals and he lives with family.
    - Receives 825 rent per week from the two properties
    - Owes ~190k on the home loan (min repayments 310 per week)
    - Owes 75k on a LOC
    - Both properties cross collaterialised through CBA
    - 4.42% interest rate
    - 19 years left on loan but due to be paid out around 17 years
    - Not purchasing any more property

    Any help would be greatly appreciated. Thanks
     
    fedex, 17th Feb, 2018
    #1
  2. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,685
    Location:
    Perth WA + Buderim Qld
    Does he get any pensions or does he live off the rent?

    It may be possible, it depends on his current income.
     
    Jess Peletier, 17th Feb, 2018
    #2
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    42,001
    Location:
    Australia wide
    Very risky to cross collateralise at this point of your life. I would suggest seeing if the securties for the loan could be changed. I don't think he would be able to refinance.
     
    Terry_w, 17th Feb, 2018
    #3
    Ethan Timor likes this.
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,653
    Location:
    Gold Coast (Australia Wide)
    4.42 isnt bd per se btw

    id look to reprice that

    refi isnt really a sensible method of attack here in todays world


    ta
    rolf
     
    Rolf Latham, 17th Feb, 2018
    #4
  5. fedex

    fedex Well-Known Member

    Joined:
    9th Sep, 2017
    Posts:
    46
    Location:
    Melbourne
    No, he was born 1962 so it'll be a few years before he can apply. His income is only his rent at the moment.

    They gave him 5%+ before I threatened to leave 2 years ago.

    It sounds like I should go there and ask for removal of cross collaterialisation and a reduction in rate.

    Is it easy to remove one property as collateral?
     
    fedex, 18th Feb, 2018
    #5
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,653
    Location:
    Gold Coast (Australia Wide)
    look mybe to fix the rates, 2 and 3 years PU are pretty decent

    If there is enough equity doing a partial release is pretty easy

    A broker can guide, as can a banker.

    What are the vals and loan amounts pls?

    ta
    rolf
     
    Rolf Latham, 18th Feb, 2018
    #6
  7. fedex

    fedex Well-Known Member

    Joined:
    9th Sep, 2017
    Posts:
    46
    Location:
    Melbourne
    The properties havent been valued in a while but if I was to guess:
    - 1/1 older renovated apartment Melbourne CBD (300-350k)
    - 3/2/1 unit ~350sqm in Glenroy (550-600k according to real estate agent/comparables)

    Loan owing: 192k
    LOC: 75k
     
    fedex, 18th Feb, 2018
    #7
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,653
    Location:
    Gold Coast (Australia Wide)

    Easy then to do a partial discharge

    Call our office on Monday if you'd like a hand.

    Its an easy form, but easy to get wrong too.

    ta
    rolf
     
    Rolf Latham, 18th Feb, 2018
    #8
Client Directed Portfolio Super your way

We provide our clients with the opportunity to select their own investments from a wide range of ASX listed securities. We provide the research to ensure your selections will achieve the goals. This is the value of advice.