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Which lenders are approving loans with INTEREST ONLY servicing?

Discussion in 'Property Finance' started by r3ckless, 4th Oct, 2016.

  1. r3ckless

    r3ckless Well-Known Member

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    Location:
    Sydney 2219
    Hi All,

    An opportunity has arose where I am looking at buying a new investment property in Sydney.

    -Currently all existing debt is investment/tax deductible/interest only repayments
    -Nil non deductible debt besides $20k limit CC which is paid in full each month. never have I incurred any interest
    -Looking to take out a new loan which will be also be investment/tax deductible/interest only repayments

    I understand the big banks are now assessing new/existing on P&I repayments etc. However due to my limited cash flow I need assessment done on IO.

    Supporting Info:
    - all existing loans are standalone, with nothing crossed
    - all existing loans LVR range from 65-75%, all within NLM, nothing unsecured
    - proposed loan will be standalone against purchase, LVR will be 60% or less (depending on how much I can borrow)
    - As I am borrowing relatively low, I will be funding the rest through cash
    - if proposed loan approved, total exposure is around $2.8m secured against $4.2m (approx)

    Cheers!
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Nab assess existing debt at IO with a loading.

    Liberty as far as I know still assess IO at actual.

    Cheers

    Jamie
     
    Terry_w likes this.
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    Unless over 80% in my experience :(
     
  4. Redom

    Redom Mortgage Broker Business Member

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    Best to try a few calculators: Liberty, NAB, Advantage, Pepper - see if any of them work for you. If super desperate, Bluestone may do it to too.
     
  5. r3ckless

    r3ckless Well-Known Member

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    Thanks alll! @Redom - are those public/online calculators actually accurate? And do tehy allow you to add back negative gearing etc?

    I've never tried those online things, as I have assumed they dont capture all the available information neccessary to give you a decent answer.

    I'll look into NAB/Liberty!
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If you look into them all yourself you risk frying your credit file - get a broker to run servicing for you.

    The online ones are junk and a marketing tool only.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Even if the online public calculators are accurate (which most aren't), how do you know you're inputting the numbers according to the lenders policies? Talk to a broker about it.
     
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  8. r3ckless

    r3ckless Well-Known Member

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    Thanks all. I';ve engaged with a broker now to kick things off with NAB!

    I've redone my figures with NAB assessment rates at actual rate+20% loading! and it looks promising to go with them!

    I'll let you all know how I go!
     
  9. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    NAB loading on existing debts is actual repayment+30%.
    They assess new debt at 7.40% P&I over the amortization period.
    Their living expense calculator is simply awful, probably the worst of any lender. It's difficult to predict what numbers to use and they don't openly publish them.
     
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  10. r3ckless

    r3ckless Well-Known Member

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    Worked with the broker with NAB, Westpac, Firstmac. NAB as you all have mentioned seemed to be the most generous. Ideally wanted $1.2m for this proposed purchased. Going for around $800k now which is still above my minimum amount required of $500k. Thanks all!
     
  11. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Liberty ?

    ta
    rolf
     
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  12. r3ckless

    r3ckless Well-Known Member

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    Agreed.

    I just had a play around and i guess they are just making it easier for the green lenders whom are doing lending at a basic retail level making sure they cover all aspects!

    Contrary to other lenders where u just plug in the monthly amount, and that's it!
     
  13. r3ckless

    r3ckless Well-Known Member

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    no it was with NAB. One thing that was annoying was this;

    so wife returned back to work last week from 11 months mat leave. Been employed same company since 2010. These details were noted on a letter from HR/payroll officer including her gross salary moving forward. The NAB assessor went back to my broker, and finally to me to ask for a payslip. I was quite dumbfounded by this request as I had assumed the letter from HR outlining the specifics were quite sufficient to verify income. Additionally there is an IP which I private manage, and as a result provided the lease agreement highlighting the rental income. Again the assessor went to the broker, and finally to me and asked for recent ITR to show the rental income captured...

    TBH I found this quite strange of a request that they needed dual verification documents for the single type of income..

    I actually do lending at a private bank calibre so am aware on how consumer loans work. Just found it odd of these two requests..
     
  14. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    They have their policies and certain documents must be provided so they can tick their boxes.
     
  15. tobe

    tobe Well-Known Member

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    Try westpac with anything other than tax noted on your payslip....
     
  16. Stoffo

    Stoffo Well-Known Member

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    Damn "TICK A BOX" requirements !

    What happened to the days where the Financier knew you, your income and spending history and said "hell NO, or WHY not" !
    Damn APRA !
    Blummin privacy requirements.............
    (PS) I recently transferred a LARGE sum of money (for settlement) to a more convenient bank, had a call within hours offering to "help" me in any way possible to invest "my new found fortune" ! (#WTF)
     
  17. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Yeah but when dealing with retail as opposed to private bank its tick a box a mentality that wins the day. I still fight for common sense and I "wont give up the fight" ..queue Bob Marley
     
  18. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    There is all kinds of quirks like that around. Some lenders (particularly second tier lenders who may compete on price instead of policy) can be real sticklers for their policy, instead of taking a rational approach. Effectively their rules for things like income verification will not be to actually make a genuine verification that the client earns $x, but instead just wants xyz paperwork so they can move to the next step.

    It's a pain, but in the end consumer lending is a sausage factory designed to lend out billions to millions of customers with as little failure in the system as practical.