A Loan Question: Maximising my Borrowing Power

[Leilah]

Hi All

If I have two investment properties financed by the ANZ, I read somewhere that if I tried to draw down equity to purchase a third property (in this case, for a family home) and I got a loan from another bank for that third property, the second bank would lend less money than the first bank, given that they would be the second in line to be paid out in the event of a default.

If this is the case, to maximise my borrowing potential, wouldn't it be easier to just go with the ANZ rather than shop around with other banks as I probably won't be loaned as much money as I might need?

Any advice would be greatly appreciated.

cheers

Leilah

 

[Aaron_C]

the second bank would lend less money than the first bank, given that they would be the second in line to be paid out in the event of a default.

That's only for a 2nd mortgage. If you are refinancing your own first mortgage then a second bank will give a higher borrowing amount.

If this is the case, to maximise my borrowing potential, wouldn't it be easier to just go with the ANZ rather than shop around with other banks as I probably won't be loaned as much money as I might need?

No that's not true. I think you're a bit confused about what you can/can't do...

 

[Rolf Latham]

Hi All

If I have two investment properties financed by the ANZ, I read somewhere that if I tried to draw down equity to purchase a third property (in this case, for a family home) and I got a loan from another bank for that third property, the second bank would lend less money than the first bank, given that they would be the second in line to be paid out in the event of a default.

If this is the case, to maximise my borrowing potential, wouldn't it be easier to just go with the ANZ rather than shop around with other banks as I probably won't be loaned as much money as I might need?

Any advice would be greatly appreciated.

cheers

Leilah

Hi Leilah

In general, ANZ is in the bottom third of serviceability for lenders.

Assuming you have the equity, with a poor structure looking to borrow all funds from ANZ, vs spreading the exposure, you can get 2 to 3 times as much IP money elsewhere............

Speak with a broker to do a mortgage/ financing plan for you

If you are looking to maximise your resources, forget going to a lender direct unless you know which lender to tackle next and why

ta
rolf

ta
rolf

 

[Leilah]

Aaron and Rolf

Your advice has been really helpful, thank you so much. I guess I needed that guidance to know that I was heading in the wrong direction as I was getting all my advice from ANZ; a dumb idea given that they have vested interests. Anyway, I will find a good mortgage broker and work out a good plan to go forward.

Thanks again.

Leilah

 

[Jamie M]

Hi Leilah

The advice you recieved is incorrect.

ANZ usually won't have an issue with accessing equity with them to purchase an IP elsewhere. You just need to demonstrate to ANZ that you can "service" the debt of the next IP on ANZ's serviceability calculator.

The next lender also won't have an issue with providing a "larger" loan than the ANZ equity release providing your can service the debt with them.

As Rolf said - speak with a decent broker about devising a plan. I know he does this stuff day in, day out.

Cheers

Jamie