Accessing Equity - lo docs

Hi all
things are changing from day to day with lo docs I need someone to give me an update on whether their are any lo doc lenders who will allow you to access equity from existing loans.
BAS statements available.


Cheers, MTR
 
If you have BAS's available, you should have quite a few options.
Also, I believe that NAB have just reintroduced a true lo-doc product that does not require BAS's...

Boods
 
Hi MTR

Cash out with low doc - even with BAS - usually has $ limitations at >60%LVR

Under 60%, without the mortgage insurance limitations, cash out is readily available.

QBE don't want Bank Account history or BAS but will allow only 'reasonable costs' for cash out, or at most up to about $50,000

Genworth will allow fairly serious cash out (for specific purposes) but want to see bank cash history, BAS receipts as well as ABN and GST registrations

However .... where there is a will there is always a way.

Depends on what you want to do and how much you want to do it.

By that, I am not saying 'Wow! It will cost you!' - losing a good opportunity for lack of cash may cost you a lot more than a bit of interest here or there.

So yes, there is always a lender and yes, a lender which will do the 'outside the square' deals will not be offering discounted rates.

I have just sourced a fairly hefty refinance with really significant cash out and this will cost my customer around the 8.5% variable - just like we were all paying back in 2008 - but if you were thinking along the lines of the better known lenders then up to about $50,000 cash out would be about it for now.

Hope this helps
Kristine
 
Hi MTR,

Pretty much what Kristine said. Technically you can do cash out with most banks if you have BAS statements, but they will put you through the wringer and will generally restrict the amounts. Outside of the banks you can do unlimited cash out up to as much as 85% but at higher rates (around 8.5% at 80% or over 10% at 85%)/

Regards,

Cameron Perry
Perry Financial Strategies
 
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Thanks all very much appreciated.

I think the greatest challenge for me this year is securing finance for my deals and I guess all investors are experiencing same.

Wonder if full doc investors are getting it easy, or is that area tightening?

Cheers, MTR
 
Hi MTR

Full Doc borrowers can get cash out but the purpose of the cash out has tightened

If the borrower has a Contract and it can be clearly seen that the cash will be going toward the new purchase with 'reasonable costs' and maybe a bit left over, there is no problem

However, the 'living off equity' situation where someone releases, say, $100,000 for no particular purpose - particularly with a line of credit where the lender has to keep funds available but the borrower may not be drawing the funds down, is very expensive for the lender (may not be earning any interest on the approved funds) so lenders are preserving funds for active loans

The capital markets are still very restricted, the lenders are borrowing to lend, they don't want people hoarding credit facilities when they could be lending and receiving income from the loans

As always, the purpose and activity will largely determine the success of the application. Lenders want the money to be active so if you have a good use for the money you will have a greater likelihood of success with your application

Cheers
Kristine
 
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