Cash out on LOC?

Mum currently has no debt, but just applied for a LOC with Macquarie Bank to do some renos on her unencumbered IP (valued at $350k and used as security) and later down the track to purchase us kid's (2/3) share of, relocate and renovate the PPOR (also unencumbered, inherited from grandparents). She doesn't immediately need the money, but wanted to apply now while she is getting plenty of hours at work (she wants to cut back). She applied for $275k originally, but has been corresponding with the bank by phone and email over the past week as they asked for more info. They initially rung to say they could only approve $100k, but after mum explained more of the details, the guy said he should be able to get it up to $205k. Today he rang back and said they could offer $190k, but would need to see evidence of the document for the purchase of the rest of the PPOR, which currently doesn't exist because things are in limbo at the moment as to whether the associated land is subdivided by us or by one of two interested developers. So long story short, it doesn't look like she will be able to go ahead with it. The bank said not many banks do a straight cash out any more, but they haven't formally processed the application to allow her to look elsewhere if she wants.

I would have thought that since the line of credit is secured against an unencumbered property at low LVR it shouldn't matter what you use the funds for and so they shouldn't need proof, but obviously not. The question is, are there other lenders who will do a cash out from a LOC without requiring a contract of purchase for where the funds will be used?

I have also been suggesting that she should think about buying some high-yielding shares to help her with cash flow, but even getting a LOC for this would apparently require an investment plan from a financial planner.
Citibank and AMP are the goto banks at the moment for cashout, no questions asked. Why wouldn't you see a broker to get the advice, then they spend all the time on the phone with the lender?
I agree with Perth I i wouldnt be using Mac Bank for such a loan if there was only a couple of lenders left on the planet.

Maybe we have old memories of Mac Bank Mark 1.
Maybe we have old memories of Mac Bank Mark 1.

Something along the lines of neural pathways being burned :)

Unlike many brokers, for us they were needs drive only, still, when they left the market it hurt.

And people still ask me, does it matter who holds my mortgage, I owe them money :eek:

Why wouldn't you see a broker to get the advice, then they spend all the time on the phone with the lender?

Thanks PI,

I had been pushing mum towards using a broker, but I think her issue is finding one she trusts, and maybe also that she hasn't had a mortgage for around 20 years and still remembers a time when you were loyal to your local bank manager and they to you. I think times have changed since then.

Qlds and Rolf,

What are the issues with Mac? My sis and BIL are with them and have been happy with them and their MB actually raves about Mac Bank. Interested in hearing other opinions.

I could be wrong but I think I heard somewhere that Macq banks dosh is coming from Bendigo Adelaide wholesale, which on the one hand makes it a bit better if true , but on the other hand.............why go mortgage manager reseller when you can go direct ?