Strategy for buying then selling with existing loans in place

Discussion in 'Loans & Mortgage Brokers' started by LewisL, 16th Jan, 2022.

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  1. LewisL

    LewisL Member

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    Hi all,
    I have a property which has approx. $700,000 in equity loans attached to it and no mortgage loan. Basically, I want to sell this house and buy a different property (for around the same value) while somehow holding onto the LOC loans, which have been used to purchase different properties. In addition to this, I'm hoping to buy the new property first before selling the old one. Just looking to get some ideas on whether this is possible or a bit of a pipe dream in terms of organising finance, using bridging loans etc.?
    Will chat to a MB at some stage but just want to see what strategies might be available first.
    Thanks,
    L
     
    LewisL, 16th Jan, 2022
    #1
  2. Stoffo

    Stoffo Well-Known Member

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    The bank will be interested in what is securing the loan.
    So if you are talking about redrawing up to the $700k to buy a new place, you can then transfer the loan security to the new property and sell the previous property
     
    Stoffo, 16th Jan, 2022
    #2
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Sounds like a portabilty/substitution using cash to secure the loans if you sell the old one first, or a bridge if you buy the new one first

    If its one of the majors they have withdrawn their LOC products from sale, and may not be keen to progress it

    ta
    rolf
     
    Rolf Latham, 16th Jan, 2022
    #3
  4. Ruby Tuesday

    Ruby Tuesday Well-Known Member

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    Transfer the mortgage to the properties bought with LOC , you may need to change the loan to something similiiar to LOC but with different name like residential loan, but that may even enable you to borrow more money, or get bridging loan to use new property as security.
     
    Last edited: 16th Jan, 2022
    Ruby Tuesday, 16th Jan, 2022
    #4
  5. Terry_w

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

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    Substitute of security which could be cash
     
    Terry_w, 16th Jan, 2022
    #5
  6. melbourne171

    melbourne171 Well-Known Member

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    Hi Rolf
    How to use cash to substitue security? Will the bank request to open a special cash account to substitute the security?
     
    melbourne171, 11th Jul, 2022
    #6
  7. Terry_w

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

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    term deposit
     
    Terry_w, 11th Jul, 2022
    #7