CBA Finance

[n_san5]

i've got 2 properties on my name (1 PPOR and 1 investment) and 1 more 50% equity with a friend. all my loans are with CBA, all up close to 1 million. on my recent prep-approval application to buy another investment property, CBA referred my case to genworth because of my 1 million portfolio. i'm trying to argue my point through the mortgage broker to consider my wife's income for serviceability, but genworth wouldn't agree with the logic because she is not on the title.


i'm trying to buy in individual names so that we could avoid land tax and serviceability issue

what would be your advise for my situation?

1. look for another lender whose lmi insurer is not genworth? if yes, any suggestions?
2. look at some trust structure
3. etc?

feeback will be greatly appreciated

sam

 

[Shahin_Afarin]

Thats the biggest problem with CBA. Plenty of lenders that have their own DUA post $1mil.

The second biggest problem is their servicing. They are extremely harsh.

Regards

Shahin

 

[Rolf Latham]

Hi Sam

Fewthings

1.You have outgrown your broker. CBA DUA to 1 mill max is pretty much common knowledge for any broker that has been around a wee while. Arguing through the same broker, via CBA to Genworth is generally a waste of space unless the broker has a direct contact at the insurer,

2. Common sense, and basic awareness of concentration risk suggest that you take your current pre approval elsewhere, because even if you are succesful here, when you want to pull equity things will be worse.

3. "Joint and several "liability appears to be getting in the way here as well. Maybe consider a lender that has a diff view on the loan with the friend.

4. Genworth are generally ok with a spousal servicing guarantee.........so there is something else going on.

ta

rolf

 

[Peter_Tersteeg]

Clearly you've gone too far with CBA. It is possible to build substantial portolios using LMI, today I'm putting together purchase number 15 for a client who's used LMI in almost every deal. We are however, very strategic in how many properties and how much money is put with each lender. A lot of effort also goes into what information is presented to the lender and how. The real challenge at this point is that we're running out of lenders! I think we're getting close to the time where we're going to have to avoid LMI altogether.

 

[HLE]

Hi Sam,

Looks like you have gone as far as you can with CBA & it is time for you to approach a different lender. When picking your next lender you will want to take into consideration:

• How the lender calculates serviceability for e.g. most lenders will add an additional buffer to the repayments of your current home loans however some will just use the actual repayments. If you are an investor with a large portfolio this can potentially dramatically increase the maximum amount you can borrow.
• Your current exposure with a particular lender. Sam as you have experienced, your current exposure with CBA is causing you issuess. By picking a lender you have little/no exposure with you can avoid many obstacles such as Mortgage Insurers.
• Your exposure with the mortgage insurers. The two major mortgage insurers are QBE & Genworth. Genworth will allow you a maximum aggregate exposure of 2.5 Mil while QBE will allow you a maximum aggregate exposure of 3 Mil. You will want to stay within these boundaries.

 

[n_san5]

Guys,

Thanks heaps for your invaluable feedback. i will let you know how i go

much appreciated

thanks

 

[Brady]

i've got 2 properties on my name (1 PPOR and 1 investment) and 1 more 50% equity with a friend. all my loans are with CBA, all up close to 1 million. on my recent prep-approval application to buy another investment property, CBA referred my case to genworth because of my 1 million portfolio. i'm trying to argue my point through the mortgage broker to consider my wife's income for serviceability, but genworth wouldn't agree with the logic because she is not on the title.


i'm trying to buy in individual names so that we could avoid land tax and serviceability issue

what would be your advise for my situation?

1. look for another lender whose lmi insurer is not genworth? if yes, any suggestions?
2. look at some trust structure
3. etc?

feeback will be greatly appreciated

sam

What info has the broker provided you around the issue?

Is the full debt being applied for the 50% owned properties and only 1/2 the rental income being used for servicing?

There shouldnt be a problem with you borrowing in joint names with your spouse and not having her on the title.

 

[n_san5]

What info has the broker provided you around the issue?

Is the full debt being applied for the 50% owned properties and only 1/2 the rental income being used for servicing?

There shouldnt be a problem with you borrowing in joint names with your spouse and not having her on the title.

Hi Brady,

Yes you are spot full debt has been applied. I didn't want spouse name on the title and loan but the broker replied negative. Apparently genworth is very adamant. I have been recently advised by a friend that CBA private banker could sign off on above 1 million portfolio without referring to genworth, fingers crossed

Thanks anyways

 

[n_san5]

By the way friends, can you please advise investor focussed broker who is dynamic, experienced and works for the client and not the lender. I mean with a particular lender

Someone who could help build my portfolio and anticipate such situations

Thanks in advance

 

[Made_Man]

By the way friends, can you please advise investor focussed broker who is dynamic, experienced and works for the client and not the lender. I mean with a particular lender

Someone who could help build my portfolio and anticipate such situations

Thanks in advance

you can just go through the forum and find a heap of brokers that know what they are talking about when it comes to investment property. that what i did and ended up with with Shahin post #2