Substitution of Security

Discussion in 'Loans & Mortgage Brokers' started by Roger Stone, 6th Dec, 2018.

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  1. Roger Stone

    Roger Stone New Member

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    I am worried that I will have issues succeeding in a Substitution of Security when I sell my home in a Low Risk Brisbane Suburb (Risk Rating 2) where I have a $400K mortgage to buy a $230K property in a Risk Rating 4 suburb with a 60% to 80% Mortgage - My communications to date with a popular sunny bank in Qld indicated that no finance application was needed and all I had to do was provide sale and purchase price contracts and if valuations were OK then substitution of Security to 80% would be OK. I think they may have assumed that I was buying in the same Risk Rating area - but now i am contracted to buy (conditional on sale of existing) in a risk rating 4 area (more than 6 months to sell), I have seen that the purchase property bank valuation meets the Sale Price but the Risk rating is 4. Being a senior now and in the back end of the mortgage - 9 years left , I do not want to go through the trauma of a finance application.
     
  2. Terry_w

    Terry_w Mortgage broker licenced 4 tax/legal advice Business Member

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    Probably will be ok, unless the property is physically challenged.
     
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  3. Lindsay_W

    Lindsay_W Well-Known Member

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    Which risk rating was a 4? On typical full valuation there are 8 Categories in the Risk Analysis section, 4 under property risk & 4 under Market Risk - some mean more than others.
     
  4. Roger Stone

    Roger Stone New Member

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    CFC53F7F-0A3C-4B9C-9A6B-7ECB1FB7CAA0.jpeg
    Dont have a copy but Market Risk was 4 - not sure about property
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    nothing to worry about unless

    its CBA and the burb u are buying in has a postcode resttriction

    That val is bog stock standard

    ta

    rolf
     
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Doesn't look like any 'x' in 4 or 5 so I don't think you'll have anything to worry about in my opinion
     
  7. miximitosis

    miximitosis Well-Known Member

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    Agree with Rolf. That LVR combined with only one '4' should be no issue unless it affects overall LVR restrictions.