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Saw my Mortgage Broker today...

Discussion in 'Property Finance' started by Kael, 9th Jul, 2015.

  1. Kael

    Kael Well-Known Member

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    My investment partner and I saw our mortgage broker today to see what options were available to us after the APRA changes. Our plan was to see if we could take any equity out of our Sydney property to then go for a < $300k property in Brisbane.

    We are currently banking with NAB and our mortgage broker advised that for our situation it would be best to stay with NAB. He also told us that the Interest Rate would be 4.63% because we were investors - APRA seems to have had a major impact, considering we refinanced about 15 months ago to 4.36%.

    He did something a lot of people say is evil: he went down the cross collateralisation path! I told him that my mentor friends (my awesome fellow PCers!) have strongly advised against this, and he was more then happy to go down the right path. He told me it would take 4-5 weeks before we would have the funds to buy a property though, due to having to go for two loans and ordering the valuation.

    My question is, does that time frame sound about right? Also, I've been reading up in the forums every day, especially watching the property finance forum and haven't heard much about NAB - anyone have any insight into NAB?

    Thanks in advance everyone :)
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I would hesitate to use NAB at this stage if you don't have to - they have a place but it's not generally early in a portfolio. I'd recommend chatting to someone about your longer term plans and really mapping the finance out before going any further.
     
  3. Redom

    Redom Mortgage Broker Business Member

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    Its a little on the slow side, but yes sounds about right to have the funds in your account. Usually around 3 weeks depending on how quickly docs get turned over.

    Cross x wasn't a good move, but may be an easy fix. Perhaps clean it up as part of your equity release process if your not on a fixed rate too.
     
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  4. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Its doable in less than 2 weeks IMHO.

    NAB are ok sub 90% but to be honest it is a challenge to keep up with all the changes that are rolling through via email on a daily basis. Like I have time to read them :)
     
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  5. Mick C

    Mick C Well-Known Member

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    As Jess mentioned i too would leave NAB for later on if your trying to buy more properties later or take out equity...

    1. I would def uncross as this is only the start of the APRA crack down...you will def need equity later down the track and crossing your loans will reduce your chance of equity.

    2. Consider a medium serving lender and than move to NAB ( general advice only as not sure how your financial looks like...presuming you havn't reached the end of your borrowing)
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    cross coll and separate sole security takes pretty much the same time, though there is more broker work involved.

    "time" is usually a lame excuse..............

    I hope that everything is well below 80 % lvr ?

    ta
    rolf
     
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  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Is it nab broker or nab direct? I assume the former. It's possible to have those funds within a couple of weeks if your broker is efficient and proactive
     
  8. Kael

    Kael Well-Known Member

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    Sorry to everyone, forgot to mention, the equity in our Sydney property has plenty of equity in it, so we will be leaving it at 80% LVR. Can't believe I forgot to put that in the initial post :p

    Why not use NAB? I've been using them for the past 15 months since last refinance and they've been pretty good. Are they better for larger portfolios but not smaller ones?
    As for our longer term plans, it's for us to purchase another capital growth property with a rental yield of around 6%. (give or take), that we can use to gain decent capital growth in, and complete some minor cosmetic renovations later on to increase the value of the property. Within the next year to two years, then repeat the process. Financially, we plan to continue to use offset accounts for our properties and to never cross-collateralise (thanks to everyone here for steering me away from the dark side :)).

    Thanks Redom. He hasn't done cross x yet, I asked him to look at other options when found out that was the path he was going down after meeting with him yesterday. He's happy to go down the "release equity into current loan, then go for another loan for the investment" strategy.

    2 weeks? I guess I'll see how long he takes :p

    Thanks Mick :) Nothing has been crossed yet and my broker is now not going down that path for our loan, thank goodeness.

    Everything is below 80% LVR, yes :) Thanks Rolf.

    Sorry, to clarify, it is NAB Broker. My broker ordered the valuation this morning, so I'll keep everyone updated in this thread for how it goes. Thanks Jamie :)
     
  9. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Nab has some of the best servicing and using them early in your portfolio can limit you down the track. They also assess their own debt much more harshly than other banks existing debt which also reduces how much you can borrow later.
    If your at 80% lvr I would strongly consider changing lenders if you want to grow a substantial portfolio - NAB is wasted at low lvrs early in a portfolio.
     
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  10. MRO

    MRO Well-Known Member

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    I would consider how suitable the broker is for your needs? Maybe have a quick chat to one of the experienced brokers on this forum just to get a second opinion.
     
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  11. Kael

    Kael Well-Known Member

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    Thanks MRO. Any brokers around that would be willing to give me a second opinion? :p

    Thanks Jess :) I do want grow my portfolio much larger to the point that one day, perhaps I can go into property development. Thanks again for your advice.
     
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  12. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I
    You've got mine - I don't think he's doing you any favours. Now more than ever, you want to preserve your borrowing capacity but loading up with NAB for your first couple is going to see you run out of steam early.
     
  13. Kael

    Kael Well-Known Member

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    Which bank do you think is the best for investors right now? ;P I'm guessing it's one of those "depends on your situation" things, ay?
     
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  14. Owlet

    Owlet Well-Known Member

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    When you refinanced 15mths ago did you pull out all the equity you could up to 80%?
    In the last 15mths with the growth in Sydney do you intend to top up PPOR to 80%?
     
  15. Kael

    Kael Well-Known Member

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    When we bought the property, it was 90 LVR. As it grew in value, it made it's way to a lower LVR, when we refinanced it wasn't worth taking any of the equity out (small amount). It's the past 15 months since then that the suburb has really boomed and our value has grown immensely.

    I also don't have a PPOR loan, as I'm living at home with Mum while studying "full time" :p
     
  16. Owlet

    Owlet Well-Known Member

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    Which bank were you with initially? What was the reason behind / purpose of the refinance? Did this get you closer to your goal?

    If your end goal is to continue purchasing property I recommend you get a second opinion from one of the experienced brokers here.
     
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  17. Kael

    Kael Well-Known Member

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    Refinanced with Homeside (owned by NAB) about 15 months ago, so everything has been through NAB. Reason behind refinancing then was to get a lower interest rate, as we were with Suncorp before that, so we were able to save $100+ per month. Now, looking to withdraw the equity from the loan and purchase another investment.
     
  18. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    It does depend on your situation, however it's pretty safe to say that if your lvr is sub 80% it makes no sense to be with NAB now. You'd be much better off with someone like ANZ assuming servicing is okay, and planning your next move from there.
     
  19. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    See above - forgot to quote :)
     
  20. poeter

    poeter Active Member

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    Why release into current loan? I thought everyone was advising to release equity into a split loan instead of topping up?