3rd loan help!

[SOULFLY3]

Being youngish (24) and not too damn crash hot with all the big ip terms ie x collateral, margins, re financing etc etc (no idea actually), im at a bit of a cross road with what i should do regarding my current ip's
Atm i have 2 with NAB first one bought 5 odd years ago with deposit, and last year bought 2nd with not a cent of my money a 100% lend including std and all legals (apart from lenders mortgage)

Now i went in bank with mate today as he was going to apply for home loan so thought stuff it ill see to if i can get anything, now first bank anz said, all sweet provide 2 tax returns (im self employed) and you can borrow upto 500k **** i thought!
went comm bank they said easily do a 350k loan providing tax returns also.

now this is all cool but what im a bit worried is how i will structure the loans if i was to say go with NAB again or another lender
Anz required 10% and then legal costs = 55k odd
comm may be able to get 95% lend and legals = 35k
or i go see NAB ?
I have enough money to comfortably pay full 55k if required but less of course is better

Its more so down the track regarding all the loans im worried about or am i worrying over nothing?



what do ppl think would be best way?

 

[Propertunity]

now this is all cool but what im a bit worried is how i will structure the loans if i was to say go with NAB again or another lender

I have a personal rule (for me) - No more than 2 loans with one lender and no more than $1M in borrowings from one lender.

I have enough money to comfortably pay full 55k if required but less of course is better

Just because you can (use your own money), does not mean you should Regarding who to go with - its just numbers. You will pay more in MI with a 5% deposit. Crunch the numbers and it will be clear what to do. Perhaps withholding more of your own cash out of #3 will let you get a deposit for#4 a bit quicker?

Its more so down the track regarding all the loans im worried about or am i worrying over nothing?

It is not clear what you are worried about:
1. All loans with NAB?
2. Too much debt?
3. Ability to service the debt down the track?

 

[Rolf Latham]

Hiya

Bit of insufficient soft data for this piece of string to be measured.


Prop has some good basic numbers there I believe.

Ta
Rolf

 

[Bradsdad]

Being youngish (24) and not too damn crash hot with all the big ip terms ie x collateral, margins, re financing etc etc (no idea actually), im at a bit of a cross road with what i should do regarding my current ip's
Atm i have 2 with NAB first one bought 5 odd years ago with deposit, and last year bought 2nd with not a cent of my money a 100% lend including std and all legals (apart from lenders mortgage)

Now i went in bank with mate today as he was going to apply for home loan so thought stuff it ill see to if i can get anything, now first bank anz said, all sweet provide 2 tax returns (im self employed) and you can borrow upto 500k **** i thought!
went comm bank they said easily do a 350k loan providing tax returns also.

now this is all cool but what im a bit worried is how i will structure the loans if i was to say go with NAB again or another lender
Anz required 10% and then legal costs = 55k odd
comm may be able to get 95% lend and legals = 35k
or i go see NAB ?I have enough money to comfortably pay full 55k if required but less of course is better

Its more so down the track regarding all the loans im worried about or am i worrying over nothing?



what do ppl think would be best way?

ANZ will require you to pay the LMI on a 90% deal.
CBA will only do 95% if you have existing credit facility with them for a minimum period of 6 months
NAB will do 95% but again you pay LMI out of pocket. Without know PP it's tough to know if the LMI out of pocket would be better than sat a 90% with a lender who caps LMI.


REgards
Steve

 

[xcesiv]

I have a personal rule (for me) - No more than 2 loans with one lender and no more than $1M in borrowings from one lender.
......

bit of a side note, but can i please ask your reasons for this...

I want to consider my 3rd IP purchase soon and would like to get your experience.

Thanks

Warren

 

[Propertunity]

bit of a side note, but can i please ask your reasons for this...

Sure. In most normal times - no issues BUT in credit crunch times like this if you have borrowings over the $1M mark - you might find that your file gets pulled up for a "review". You really don't want this IF your LVRs were high to start with and the values might have fallen a bit. The lender might want you to tip in some more cash for example, for their comfort factor. You don't want to be forced to sell either if you can't find cash.(like a margin call on shares).

Additionally, you want to keep them keen. If you have other borrowings with other lenders, you want them to provide you with good service and interest rates or you might take your business elsewhere.

As well, some lenders were/are more exposed to the sub-prime crisis o/seas. These lenders are unable or unwilling to cut rates as per the RBA. You don't want all your loans with a lender like this, not only because of higher rates, but because you might not be able to refinance away from them for all sorts of reasons - like more MI to pay or lower LVR offered at the new lender etc.

I'm sure there are more reasons but this is all I can think of at present.

 

[BayView]

I have a personal rule (for me) - No more than 2 loans with one lender and no more than $1M in borrowings from one lender.

What happens if the only lender who wants to play ball is the one you are already with to those limits?

Do you still saddle up?

 

[Propertunity]

What happens if the only lender who wants to play ball is the one you are already with to those limits?

Bit of a hypothetical - only one lender? There were thousands (give or take) of lenders back in 2001. I imagine there are still many, many dozens at least still.

Do you still saddle up?

To quote Patsy from Ab Fab regarding a horse riding episode:
Clarissa: I take it you've ridden before?
Patsy: Well, I've been ridden

Guess it depends on desperation to cut the deal

 

[SOULFLY3]

ok so is there a way of working out how much LMI will be? or does it vary upon lender?
comm bank said even though i haven't got a commbank Credit Card for 6 months (which is a bloody crazy rule) he will try push for 95% lend as i been a banker for 15 + years with them.

hmmmmmmm

 

[Bradsdad]

ok so is there a way of working out how much LMI will be? or does it vary upon lender?
comm bank said even though i haven't got a commbank Credit Card for 6 months (which is a bloody crazy rule) he will try push for 95% lend as i been a banker for 15 + years with them.

hmmmmmmm

Totally agree on the surface. I however see it as a way of the CBA minimising the amount of 95% loans they write. The cost of funds and the risk is higher on this type of loan so by enfocing a few rules they are minimising the volume they are writing without taking themselves out of the market completely.