Another lenderr has joined the land of the pixies

[Rolf Latham]

And just when I thought I had hear the last of rental reliance, its made a BIG come back with the king of the serviceability chain.

AMP have confirmed that those of you with 10 IPs or more fall into the same grouping as bankrupts et al, since you are now rental reliant

Im chasing some real hard stats to see what they are basing their view on, but I expect its a Bit of a Kerry Packer Intellectual..........

ta
rolf


Unacceptable Borrower Types
AMP Bank will no longer consider applications where borrowers have more than 10 investment properties.

 

[HotRod]

WTF?

But probably quite happy to lend money to a first home owner with 95% LVR with LMI out the wazoo with the wife currently working and heavily pregnant and about to go on maternity leave. (just an example, don't go all PC on me)

 

[Aaron_C]

I got the memo too rolf - maybe investors taking up too much of their book?

Funny how lenders seem to think that having a job is more secure than rental income. Oh well.

 

[Rolf Latham]

WTF?

But probably quite happy to lend money to a first home owner with 95% LVR with LMI out the wazoo

that was my exact response to my BDM

ta

rolf

 

[Aaron_C]

But probably quite happy to lend money to a first home owner with 95% LVR with LMI out the wazoo with the wife currently working and heavily pregnant and about to go on maternity leave. (just an example, don't go all PC on me)

Because Genworth will pay up if that loan goes belly up

 

[Rolf Latham]

Funny how lenders seem to think that having a job is more secure than rental income. Oh well.

more about the diversity of income, a..........the whole concept has always smelt dead and has few logical legs

the stats of most of your tennants running off vs you losing your PAYG income must be in the 100s to1, especially if underwitten with a bit of diversity.

Our mate Nathan Birch fails the ambit AMP criteria 7 times over

ta
rolf

 

[Terry_w]

It would be pretty rare for someone to hold 10 in their own names. How would they treat 10 across different entities?

 

[Aaron_C]

It would be pretty rare for someone to hold 10 in their own names. How would they treat 10 across different entities?

If you control the properties through a trust/company so you can rely on that for servicing so that would be the criteria.

 

[HiEquity]

Now I've heard it all. I had the same question as Terry above - what about entities?

And this decision applies regardless of LVR, serviceability or anything else? Are they seriously saying they won't lend to any billionaire who happens to own more than 10 properties?

Wow...

 

[Terry_w]

If you control the properties through a trust/company so you can rely on that for servicing so that would be the criteria.

Or could you use annual tax returns?

 

[Terry_w]

its probably counted via personal guarantees.

 

[moyjos]

Wonder how they would look at someone with 10 300k properties vs someone with 5 600k properties?

 

[Rolf Latham]

It would be pretty rare for someone to hold 10 in their own names. How would they treat 10 across different entities?

dunno

I expect its an arbitary line in the sand drawn by risk

10 Ips in Moree is a diff risk proposition to 10 IPs in Mosman ...........but lets see what my "hard data" requests turns up.

ta
rolf

 

[Aaron_C]

Now I've heard it all. I had the same question as Terry above - what about entities?

And this decision applies regardless of LVR, serviceability or anything else? Are they seriously saying they won't lend to any billionaire who happens to own more than 10 properties?

Wow...

Looks like I better chuck in a few more applications before this takes effect on 4th March...

 

[starter]

Looks like the next few I do will go through AMP then Aaron until I reach the 10 IP mark. What about IP in a spouse's name?

 

[eKwatee]

Are these banks reading into the market a little more that we and the RBA are?

 

[Aaron_C]

Looks like the next few I do will go through AMP then Aaron until I reach the 10 IP mark. What about IP in a spouse's name?

If the spouse is not an applicant I think it should be irrelevant as the spouse won't appear on the A&L.

 

[Rolf Latham]

Are these banks reading into the market a little more that we and the RBA are?

for sure

but im yet to see the logic and data behind their decision and ascertain if they have a new risk manager who studied under Some Economic Theorist, or if last weeks Seance rearranged the tea leaves in some shocking way.

ta
rolf

 

[Rolf Latham]

I have this expectation that it has more to do with the fact the costs of assessing and processing such a deal has them considering hard........ rather than a pure risk consideration.

ta

rolf

 

[tobe]

I thought the other bits were interesting too: not 100% of rental if rental income was more than 50% of total income, and serviceability rate capped at 7.5%, AMP now joins ING and part of the westpac group to have floor serviceability rates.