Westpac - substitution of security

Hi all

I'm with westpac - owner occupied, LVR ~ 30%, (Low Doc - from the good ol days)
Looking at substitution of security with them to buy new property
I realize settlements will have to be same day, and loan, LVR should stay the same

Spoke to westpac branch manager, who indicated a full doc application will be required.
That doesn't sound right to me, if anyone has any thoughts on this will appreciate if you can share

Being self employed I am hoping a full credit assessment wont be needed.

Thanks

 

I've only done a Westpac security substitution once, about a decade ago (they're a rare event). No application was necessary.

It is possible that an application might be required as it's a lo doc loan. It could also be that the branch manager might prefer to write a loan so they get credit for it (we all tend to get paid for writing new loans, nobody gets paid for security substitutions).

I'd ring Westpac customer service (132 032) to get a second opinion on this. They can probably initiate the process over the phone.

 

Be careful and get prepared...I did one of these recently with Failpac and it took them 6 months to sort it out! Bungle after bungle...

 

Not sure, but I did a low doc loan through west Pac only a couple of months ago, however don't know how that works with substitution of security.

 

thank you all for the info. i will call Westpac directly and report back

 

There is indeed no new application or credit assessment with subst of security with Westpac. It seems like a pretty straightforward process as long as the new security is acceptable to the bank (ie passes valuation etc)

 

how does one coordinate same day settlement?
maybe negotiate longer settlement for the property you want to exit, so you have more time frame to find a replacement property?

if one has to delay settlement, the replacement deal will also need to delay?

 

The bank will not release the mortgage on the existing property without security being substituted. So settlement must be simultaneous.

However many lenders will allow the mortgage to be discharged if they hold the cash equivalent until this is substituted with a mortgage over real property.

 

If they accept 100% cash in a Term deposit then it may work for some people... However some banks throw a curve ball that max 80% cash in TD , balance using property as security.
if you don't have another security with the same Lender, or enough equity then this option is not feasible..