Bank manger suggest me to merge all IP loans to one
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Depending upon how many loans that you have, it may go over the manager's limit and require approval from higher up. Do you really need that? What benefits are they going to give you - halve your interest rate?
Easier for him to manage you !
One loan secured by all properties is even worse than cross securing individual loans by all properties.
That is bad advice beyond belief
seiously, give em cootas piece and the below mouldy oldie
http://somersoft.com/forums/showpost.php?p=120656&postcount=6
then see what they say
if u get the 'deer in the headlights look"....... at least they didnt know, which is the usual default position ;(
if you get the " well I have always dont it this way and no one has ever had trouble' then you need to run............ and fast.
ta
rolf
http://somersoft.com/forums/showpost.php?p=120656&postcount=6
then see what they say
if u get the 'deer in the headlights look"....... at least they didnt know, which is the usual default position ;(
if you get the " well I have always dont it this way and no one has ever had trouble' then you need to run............ and fast.
ta
rolf
Yep - sounds like his trying to cross them all up.
There could be taxation implications too if there's a mix of non deductible and deductible debt involved.
He's no doubt clueless about loan structuring. Time to move on.
Cheers
Jamie
it would need modernising.
some parts do not apply anymore, and the 7 can be expanded to probably 12.
Shes a well work and beaten post that one.
back in the day, and till occasionally now some folks swear by xcoll, and for some there is no other way of doing the deal.
for many others with the dogma of cross cross cross............ most but not all are also members of the flat earth society, ie you can believe what you want to believe but the balance of the real world data contradicts your belief.
ta
rolf
ALARM BELLS ARE RINGING.
In my opinion as a tax adviser this is terrible advice. He is a numpty. Yes he wants to cross loans and then he will likely suggest some stupid notion like a redraw facility. He didn't mention offsets I bet. Your loans will be tainted and impossible to manage. Think of a simple example - You sell one IP...How much gets paid off the loan ??? I wouldn't try to estimate it....Its an impossible calculation if any of the loans are or were P+I.
I STRONGLY recommend you speak to a broker (one of SS like Shahin or Rolf etc) and never deal direct with a bank "manager". Both are sales persons I agree but one is a competent qualified professional and the other likely an unqualified bank employee who gets a bonus for stuffing up your life by holding you hostage to them for life.
Curious was it NAB ?
The bank manager is definitely taking you for a ride - stitching you up through a cross coll situation which provides you with no tangible benefit, whilst piling on the negatives.
https://www.youtube.com/watch?v=geHLdg_VNww
https://www.youtube.com/watch?v=geHLdg_VNww
Pretty broad generalisation there Paul, thought more of you.
My branch manager is excellent, has many years lending experience with multiple banks in both residential and commercial lending. No two bankers/branch mangers are alike. Just like no two accountants or brokers.
But I agree this Branch Manager has NFI and would be running fast very fast away from the terrible advise given, and you could do a whole lot worse then running to Rolf
Your 'investment team' needs to be full of people who you can trust.
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Not with CBA. Not sure about other banks. Branch managers would have to retain a certain number of clients, in the same way brokers have trail. Some could argue that by x-coll they're less likely to move as they are locked in. But thats just stupid.
By setting up clients to be in the best financial position it's going to allow them to borrow more, which is most cases is more profitable for the branch and the client. If someone gets stuck and in a bad finanial position... letting them go down the guzzler becauase they're stuck with properties and debt where they dont want it isn't going to help anoyone.
By setting up clients to be in the best financial position it's going to allow them to borrow more, which is most cases is more profitable for the branch and the client. If someone gets stuck and in a bad finanial position... letting them go down the guzzler becauase they're stuck with properties and debt where they dont want it isn't going to help anoyone.
I seriously doubt it. I do think that for many, that's just the way they're trained. I suspect most don't know any better. The trainers often don't know better either (the head VIC CBA broker training is utterly clueless about serious investment lending).
There's a lot of brokers trained exactly the same way, this isn't a problem unique to branches. In both cases, there's lots of people who are great at getting loans approved, but they have no understanding of the structural and tax implications of what they're doing.
I'm yet to see a formal course which teaches this sort of thing. The MFAA has a 'certified mentor' program. It focus' heavily on turning out brokers that can write loans, be compliant and have some basic marketing skills. When I asked what they're doing to pass on skills around good structure and strategic lending, the head trainer told me that's my job to pass on. Frankly I don't think she has a clue about these things either.
Fortunately the forum is a great place to find some top brokers. A broker that doesn't understand the deeper implications of what they're doing, either gets a very quick education here, or they get run out.
Sadly for a competent loan writer, this stuff isn't exactly rocket science. The fact is that most simply don't get trained in this, and they don't get enough exposure to serious investment related lending.
Thank you all for the valuable feedback.
I will definately not cross them. I deal with bank manager and brokers too. Each have benefit I need.
I had some splitted loans from ppor equity to support 20% down payment of new Ip. As appreciation, I plan to absorb those splited 20% loan to those 80%loan and each IP has only one loan.
Clear for accountant and me.
Also top up new splitted loan from ppor(biggest increase of my properties) for future IP purchase.
Got 6 IP if u ask.
I will definately not cross them. I deal with bank manager and brokers too. Each have benefit I need.
I had some splitted loans from ppor equity to support 20% down payment of new Ip. As appreciation, I plan to absorb those splited 20% loan to those 80%loan and each IP has only one loan.
Clear for accountant and me.
Also top up new splitted loan from ppor(biggest increase of my properties) for future IP purchase.
Got 6 IP if u ask.
Sounds like you've set it all up correctly. You could, if you haven't already, split the 20% deposits to include the closing costs too.
Although i'm not quite sure what you mean (or your reasoning) here?
As appreciation, I plan to absorb those splited 20% loan to those 80%loan and each IP has only one loan.
With regards to your bank manager, its just poor advice, likely to be protecting his own interests instead of yours. I'm not sure I believe in any professional in the industry saying they don't know any better - it's their job to know! As Peter said, its an intensely competitive industry - I can't imagine advice like that lasting too long.
Cheers,
Redom
