Advice requested on financing options

Hi all

I would appreciate advice on our current situation.

PPOR - worth about 750k - outstanding bank loan of approx 13k
IP - worth about 360k - outstanding loan of approx 320k - crosscollateralised against the PPOR

Combined LVR approximately 30%
No issue with servicing the loans.

We are looking at increasing the mortgage on our PPOR from 13k to 53k with the intention of using the 40k to establish a business.

Was upfront with our bank as to why we would like to increase the loan.
They have replied by saying they wont increase the PPOR loan for business reasons and would require us to set up a business loan.
I refuse to do this, as I dont want to put the PPOR at risk should the business fail (though I am happy to wear the extra amount owing on the PPOR should the business fail).

I would appreciate any suggestions on the best way to move forward.

Options being considered so far include:
1. Sell the IP
2. Refinance
3. Wait and save
 
Thanks Jamie - thats true but I was upfront about the reason (I'm painfully honest)

If you want the money, tell them it's for "Future investment".

Yes it's good to be honest, but you don't have to be explicit. You could say that that investment is to buy a modest amount of share (just don't say that it's in your own business).
 
I refuse to do this, as I dont want to put the PPOR at risk should the business fail (though I am happy to wear the extra amount owing on the PPOR should the business fail).

Not sure I understand your reasoning here. Either way your PPOR will be securing the loan.
 
Which lender is it?

I don't want to say at this stage Jess, sorry.

Not sure I understand your reasoning here. Either way your PPOR will be securing the loan.

True, but by increasing the PPOR loan it creates a disconnect between the business and the loan, if the business fails then I'm simply paying more each month to service the PPOR loan.
As long as I can service the PPOR loan things are fine.

If I agree to a business loan and the business fails then the bank can take control of the PPOR to regain its funds.
 
I don't want to say at this stage Jess, sorry.



True, but by increasing the PPOR loan it creates a disconnect between the business and the loan, if the business fails then I'm simply paying more each month to service the PPOR loan.
As long as I can service the PPOR loan things are fine.

If I agree to a business loan and the business fails then the bank can take control of the PPOR to regain its funds.

without putting some simple non identiying data out there, you arent gping to get any useful advice

choose and move .............

PM someone or speak with a broker, the suspense is probably not going to help you, specific direct action might

ta

rolf
 
True, but by increasing the PPOR loan it creates a disconnect between the business and the loan, if the business fails then I'm simply paying more each month to service the PPOR loan.
As long as I can service the PPOR loan things are fine.

If I agree to a business loan and the business fails then the bank can take control of the PPOR to regain its funds.

If the business fails the house is being used as security, but they are unlikely to take possession of the house. They will merely want their $40k or so back.

Make sure you don't just increase your PPOR loan but either
1. Pay off your $13k loan and borrow, or
2. Set up a new split and borrow

Otherwise you will have a mixed purpose loan.
 
If you want the money, tell them it's for "Future investment".

Yes it's good to be honest, but you don't have to be explicit. You could say that that investment is to buy a modest amount of share (just don't say that it's in your own business).

Answer is here if you want the money.

If the business fails the house is being used as security, but they are unlikely to take possession of the house. They will merely want their $40k or so back.

Make sure you don't just increase your PPOR loan but either
1. Pay off your $13k loan and borrow, or
2. Set up a new split and borrow

Otherwise you will have a mixed purpose loan.

And make sure you do this.

Seriously these two answers are all you need.
 
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