Advice of fianacing my first IP

Hi,

Have an issue with Westpac through a local broker at the moment that I just need some advice on my options on whether to hang in there or look else where for funding options.

The situation:
PPOR $290K (bank valued 27/4) with 100% equity = no mortgage
Income 1: $62K gross (me - government job >10yrs so stable)
Income 2: $20K gross (wife - Allianz Workers comp since 2004)
Cash: $110K
Shares: $60K

Prospective IP: $370K (bank valued at purchase price 22/4)

Broker advised loan of 100% + costs then to cross collateralise PPOR with IP for various reasons including LVR with be <60% and my modest income then use 100% offset for cash to reduce cash flow issues.

I got pre approval in late 2009 based on the above figures and full declaration of income sources for an IO loan of <$400K. Double checked everything with broker prior to offer being made and all was OK so had offer made & accepted on $370K + Stamp Duty/Cost.

The issue is now Westpac seems to be very hesitant due to my wifes income being from Workers Compensation.

Can any experts (Brokers etc) advise if it would be possible to finance an IP on the information given above using the 100% finance option with linked properties.

My only other option I know, yet to be tested, would be to use all cash/shares and borrow a smaller amount that is acceptable given my income.

Also once applied for via an alternate Broker how long would it take to get unconditional written approval for loan as its now urgent if I want to secure this IP.

Any advice would be appreciated.

Cheers.
 
Mate that is an easy situation.

Don't cross secure the properties.

Borrow 80% against the new purchase and 20% plus costs and a nice buffer against the home on a second loan and I would suggest use a different lender for both loans.

Additionally I would get a new broker.

Good luck
 
Hi,

Thanks thats what one of my last options were/are but at a LVR of 80% I am not sure the lender would still not have the same issues.

Also only 1 loan for the IP as the PPOR is mortgage free.

Cheers.
 
Just needs to be presented right to a lender.

I am suggesting 2 loans that borrow 100% plus , don't put any cash or shares into it.

Borrow 80% with one lender to buy the place

Borrow 20% plus costs and buffer say 30% against the home = 110%

So you borrow the whole amount just with different banks and not cross secured.
 
OK thats makes sense. So 80% against IP with Bank A then 30% against PPOR via a LOC or something against my 100% equity with Bank B. I like my cash & shares too. Thanks will investigate tomommow with new broker.
 
that's it you got it :D. let us know how you go. Additionally if i was u i would get as much cash out against the home now if you can and just dump it in offset account so you have a big buffer and the deposit for the next one is just sitting there until you decide to buy again.

good luck
 
Should be doable on your income and rental income based on a 80/20+ split un-crossed even with same lender based on info supplied. Things may difer if there are other debts, credit cards, dependants.
 
Cheers to everyone for their replies and to Qld007 (Richard) for his offline advice and offers of assistance. All has been sorted and loan approved today after I stamped my feet and banged the table a few times. I was just stressing out last night due to my lack of experience in such matters.

Got my 105% IO loan using crossed properties and with the income stated above probably because I have no debts, no big cards and no more little dependants.

Crossing the 2 properties doen't really bother me as I will be selling my current PPOR then moving into the IP in a few years the I will use the cash to reduce debt at the new PPOR (this IP) and then get a real IP on it own with another bank but not using the crossing as suggest many times on this forum.

Cheers,

now a stress free womble.:):D;):p
 
congrats on the approval! Still wouldn't have cross secured u will have problems later when/if you sell but don't stress about that for now:D
 
Would normally agree with you Bigtone but in Womble's situation i think he is ok in X ing the 2 securities.

u done a partial discharge with Westpac lately mate? He is going to sell the home.

Important thing is he got the property but it will be a bit painful later
 
Thanks, will look into it further now that I have the approval.

Can you indicate what are the indictiive cost to do a partial discharge with WBC so I can evaluate the hurt now.

Another simple Q is can I, after exchange but before I sign on the dotted line with WBC, change my loan structure with a new loan application prior to settlement even with another lender?

Worse case senario I stay as it is.

Cheers.
 
Thanks, will look into it further now that I have the approval.

Can you indicate what are the indicative cost to do a partial discharge with WBC so I can evaluate the hurt now.

Another simple Q is can I, after exchange but before I sign on the dotted line with WBC, change my loan structure with a new loan application prior to settlement even with another lender?

Worse case senario I stay as it is.

Cheers.

It is not the cost of the partial discharge it is the painful process that is the issue.

yes now approved u can change structure and or lender or preferably use westpac on home portion and another lender on the purchase
 
Cheers, if its pain then I will get prepared. I was thinking $$$$$. Thanks for the advice. 1st call today will be to my friendly broker who loves me so ......
 
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