Breaking a fixed rate to refinance with the same lender

[Rolf Latham]

While I never say 'never' the chance of it happening again has diminished quite a bit.

for those with full doc variable rate loans at < 80 % on the day lvr who can provide income proof > exit - fine.

anyone else remains in the ever quality decreasing pit.

And its not just the lenders of "securitisation models old" that can fall into this puppy, even mainstream international banks washed their hands of portions of the Australian Mortgage Market.

if its not a balance sheet lend, there are additional borrower risks - small or large ? that remains to be determined if and when it becomes a problem.

ta
rolf

 

[perthguy]

Incidentally, my sequence went Wizard->G.E. Finance->Pepper Home Loans.

and peops say it will never happen again.................

Was I clear that GE and Pepper were not my choice? Wizard sold my loan to Aussie? Aussie? sold to GE. GE sold to Pepper.

 

[Rolf Latham]

Woah! So my Mortgage Broker flat out lied to me? That's not cool

there are circumstances where only fixed rate can work due to serviceability with some lenders, and there is the occasional lender that will insist on aggregated security under their pro pack unless pushed

ta
rolf

 

[perthguy]

Unless you are using commercial property as security to purchase residential.

I wasn't. Mine was just four residential properties with no cross-collateralisation, <80% LVR (except the new purchase with was 100% mortgaged + stamp duty). They probably saw the deal as risky because my investment partner doesn't have a great on paper income. A lot of that is to do with the bank double counting his expenses which makes his income appear lower than it is (self employed). In reality, our ability to service the loans is way higher than on paper to the point where I am now salary sacrificing half my salary into super (untaxed account) because I don't have anywhere better to put it right now.

 

[perthguy]

there are circumstances where only fixed rate can work due to serviceability with some lenders, and there is the occasional lender that will insist on aggregated security under their pro pack unless pushed

Perhaps my broker felt a little inexperienced to push this particular lender. Hopefully he can do better this time around.

 

[Rolf Latham]

Was I clear that GE and Pepper were not my choice? Wizard sold my loan to Aussie? Aussie? sold to GE. GE sold to Pepper.

and therein lies the problem

did the initial mortgagee inform you of the difference in funding lines between a balance sheet lend and a securitised lend - very likely no.

did they have an obligation to do so............ they dont even have to now under the new NCCP rules .

At least we didnt have the same 80s lending melt down that the "savings and loans" crisis caused in the US, where many were sold up simply because their lender went belly up

ta
rolf

 

[Aaron_C]

Unless you are using commercial property as security to purchase residential.

Well, they try anyway

 

[perthguy]

and therein lies the problem

did the initial mortgagee inform you of the difference in funding lines between a balance sheet lend and a securitised lend - very likely no.

Actually, they did explain that. What they didn't explain what that the boss was planning to sell the company. That's when it all went wrong.

The upside is that the new loans are standard loans even though my investment partner is self-employed.

 

[Terry_w]

Hopefully he can do better this time around.

After he did what he did you are still willing to use him again>?

 

[perthguy]

After he did what he did you are still willing to use him again>?

I'll tell him what I want and see what he can do. If I'm not happy with the deal I won't sign up.

 

[Terry_w]

I'll tell him what I want and see what he can do. If I'm not happy with the deal I won't sign up.

I don't understand why you would even give him the chance given his unethical behaviour!

 

[Rolf Latham]

Actually, they did explain that. What they didn't explain what that the boss was planning to sell the company. That's when it all went wrong.

Id guess there was no such plan per se, and the sale was more a rescue package and stop borrowers from being sold up than a cash injection for the boss.

ta
rolf

 

[alexlee]

I wasn't. Mine was just four residential properties with no cross-collateralisation, <80% LVR (except the new purchase with was 100% mortgaged + stamp duty).

You managed to get a 100%+ LVR without x-coll?

to the point where I am now salary sacrificing half my salary into super (untaxed account) because I don't have anywhere better to put it right now.

So you're locking it away with no real way to get at it until you're past 60?

 

[perthguy]

You managed to get a 100%+ LVR without x-coll?

No. The was is past tense. There was no x-coll until AMP got their grubby mitts on my loan structure

However, I should have done by homework before I signed off on any deal. I'm just glad I am more informed now.

So you're locking it away with no real way to get at it until you're past 60?

Not so much. Next step is to move the funds to my SMSF that is already set up to invest in residential property. I just want to get my IP renovated and rented out and buy my next IP before I start seriously looking for my SMSF first IP.