Join Australia's most dynamic and respected property investment community

Refinancing to purchase new PPOR

Discussion in 'Property Finance' started by browntiges, 21st Jul, 2015.

  1. browntiges

    browntiges New Member

    Joined:
    18th Jul, 2015
    Posts:
    4
    Location:
    Sydney
    Hi all, this one might be for the brokers....

    Our current situation:

    5 IPs - financed under an IO loan for approx. $2m , approx $1.1m in equity
    PPOR - financed under a P&I loan for $580K, approx $1m in equity

    All finance is with ANZ (learning on this forum that is is not necessarily a good idea).

    What we'd like to do:

    Buy a new PPOR for $2.4m. The problem is that the new potential property has just been leased for 12 months, so this property would need to be purchased as an IP (I think) until we can live in it next year. The ANZ has said that our serviceability for a further IP is $700K, so we have a significant shortfall.

    Any tips/advice as to what we could do in terms of refinancing etc. to fund the purchase would be appreciated. We don't have LMI currently and would like to continue to avoid this if we can.
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,150
    Location:
    Canberra and Sydney
    Easy - use another bank!

    Cheers

    Jamie
     
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,781
    Location:
    Perth WA
    ANZ is one of the most conservative lenders so it might be best to get some equity out, and use it as a deposit with another lender.

    Are your loans all cross collateralised?
     
  4. browntiges

    browntiges New Member

    Joined:
    18th Jul, 2015
    Posts:
    4
    Location:
    Sydney
    Hi Jess, no cross-collateralisation of the properties. I'm keen to understand if another lender would finance this purchase, we are not wedded to the ANZ.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,005
    Location:
    Sydney
    Of course another lender would consider it. It could be done as a main residence loan too with bigger discounts.
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,781
    Location:
    Perth WA
    They should, but we'd need to run servicing with all your details to be sure - $2.4M is a decent loan size :) There's a good chance another more generous lender will fund it.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,150
    Location:
    Canberra and Sydney
    ANZ are assessing all your debt at P&I and a rate of 7% +

    A bank like Nab for instance would assess the debt at what it actually is plus 28%

    Others such as Firstmac will assess the debt at actual repayments (ie. with no buffer)

    The difference in borrowing capacity among the three will be massive.

    Cheers

    Jamie
     
  8. browntiges

    browntiges New Member

    Joined:
    18th Jul, 2015
    Posts:
    4
    Location:
    Sydney
    Thanks all for your responses and advice...and if anyone is interested in assisting with the refinancing, we are looking for a good broker! ;)
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,150
    Location:
    Canberra and Sydney
    Nah - don't think anyone would want to help with a $2m deal :)

    Cheers

    Jamie