I have 4 IP's All are rented long term, are neutrally geared and are in blue chip suburbs. I earn a stable income as a Clinical Registered Nurse. I have no debts other than the loans on these properties. My children are adults so I have no expenses. I have a good credit history. So why is it that the CBA are refusing to finance me to buy another property? I don't get it? I have 2 fixed rate loans that are due to revert to variable rates in a few months, another is fixed until late 2012. I am considering refinancing with more than one lender at that time. Any advice on how to escape from the monopoly and control of CBA ASAP would be much appreciated.
CBA have tied my hands
- Thread starter JASA
- Start date
This is a good example of why I never have more than 1 or 2 IPs with the one lender.
CBA are uncomfortable with their exposure to YOU, nothing else. You need to refi a couple of your IPs away from them (or un-cross any you have cross-coll'ed) and move on IMO.
CBA are uncomfortable with their exposure to YOU, nothing else. You need to refi a couple of your IPs away from them (or un-cross any you have cross-coll'ed) and move on IMO.
It sounds like you simply can't afford another loan in their eyes. Don't take it personally. The lender can't just waive a loan through because you say you can afford it? If you think they are not interpretting your situation / borrowing capacity correctly seek a second opinion from an experienced investment loan broker. Plenty post on this site.
Could be just a debt servicing issue....especially if all of your properties are negatively geared it could impact heavily on your cashflow for a new property.
Cashflow is everything to them now....and what you invest in just doesn't cut it in this new credit arena.
Having just recently done the rounds with the lovely folk in the dark cave known only as CBA credit, I can 100% iron clad guarantee you that, to them, the cashflow position of your portfolio sux....and they don't want to prop you up any further.
Double the rents you are charging to your Tenants and go back to the boys in the cave. That may have some sway with them, but frankly, it still won't be enough....and of course, the possibly of doubling your rents is off in fairyland anyway, so you're hooped.
This is a good example of why I never have more than 1 or 2 IPs with the one lender.
Hmm, I think you may have hit the nail on the head here. Too many eggs placed in one basket.
Due to my ignorance in financial matters. I took what I was given by CBA in structuring the loans for these properties. Yes there is cross collateral (vague idea about what that means) My talents are more around spotting the right property. Unfortunately my lack of attention to detail in this area is likely to undermine my profits.
I don't know why my portfolio would suck?
My valuations are realistic for current market.
Prop 1 Value: $600K Bought for $600K Loan owing $250K Rent return $500 weekly
Prop 2 Value: $400K bought for $220K Loan owing $216 Rent return $400 weekly
Prop 3 Value: $260K Bought for $180K Loan owing $180 Rent return $320 weekly
Prop 4 Value: $260K Bought for $190K Loan owing $190 Rent return $300 weekly
prop 5 Value $20K Bought for $13K Nil owing Rent return $50 weekly
Of course then there are the usual expenses (water, council rates etc)
Assuming those figures are correct, I don't think you should have a problem. I know plenty of lenders who would happily take your business from CBA.
Nothing wrong with the major banks, as long as you split your exposure to them. 2 properties here, 2 properties there.
I have recently depleted my savings on a major overseas trip.(It was worth it
) I have around $40K left in my savings. I have not had the properties revalued for 3-4 years. In fact I have to admit that the last time CBA asked to value the properties I told them to take a flying leap . I was just way too busy to organise CBA access to the properties. (all properties bar 1 are self managed.) I am locked into fixed x collateral loans with CBA until next year. I suppose I was shocked to discover the party was over because CBA have been trying to throw money at me (and everyone else) for years. I'm not going to panic to buy right now because I think the market (at least in the areas I am looking at) is going to be stagnant for some time to come. I will just take a deep breath, organise a mortgage broker and look out for something special, the money will come.Hi JASA,
I didn't say your portfolio sucked. I said the cashflow position of your portfolio sux.
This is what they are all banging on about nowadays. Valuations and security and all that good stuff need to be tucked away nicely, no change there over the years. What has changed is their voracious appetite for income coverage as compared with the loan expense.
Looking at your cashflows.....assuming an interest rate of 7.5% pa over your 4 loans totalling 836K, that comes to 63K pa.
Looking at your gross rents, that comes to 82K pa.
Assuming 20% for all other costs (CR / WR / LT / Ins / Maint / PM fees) then your nett rent to service your loans equals 0.8 * 82K = 65K pa.
Yes, it appears that your portfolio is neutral from a cashflow perspective.
So, the only extra fat the Bank can chew on is your salary, most of which would be taken up with tax and supporting yourself......I can see why they have called it a day with you.
Could I suggest that if you wish to continue borrowing, perhaps look at properties that yield better than your Prop 1. At a gross yield of 4.3%, and a nett yield of probably 3.5%, it ain't exactly setting the world on fire....especially in the eyes of the Credit boys.
Once again, to be clear, I never said your portfolio sucked. But obviously in the eyes of the Credit boys, the cashflow of the portfolio does suck.
If that's the case, you might be shocked to what number a valuer might be willing to sign their name against.
In fact I have to admit that the last time CBA asked to value the properties I told them to take a flying leap
This will probably be weighing heavily against you as well.
CBA Loans
Hiya
I recently had one of my property revalued by CBA; not need for a valuer go to the house at all; all they did was punch in some computer valuation and top up 55K for me!
Can i suggest you check with their loan dept; you may be able to revalue each property and then un-cross so some property stands on their own at 80% LVR if possible?
Hiya
I recently had one of my property revalued by CBA; not need for a valuer go to the house at all; all they did was punch in some computer valuation and top up 55K for me!
Can i suggest you check with their loan dept; you may be able to revalue each property and then un-cross so some property stands on their own at 80% LVR if possible?
Not offended
Hi Daz, I wasn't offended, if it sucks it sucks........... what can one do?
Property 1 is PPOR in Port Douglas. It is currently rented out while I work interstate. It will be sold when the tourism industry and FNQ eventually bounce back. I have underestimated all property values presented because I am a realist and I can afford to be realistic without pain because I aint gonna sell anything in this market.
I know CBA have certainly gone off me for some reason. I used to enjoy the luxury of a personal manager (or some such title). I knew something was up when my personal manager rang earlier in the year to tell me that CBA no longer required me to partake of his services. It was all very silly and deceitful I was supposed to thank CBA for restructuring me out of an arrangement that they had previously insisted I needed. I refused to go gracefully and forced my personal manager squirming into acknowledging that I was actually being demoted by CBA back into the equivalent of economy class. At the moment I am living rent free at my parent's house in Adelaide (they are nursing home) and I have minimal personal outgoings. I have a regular wage and would surely be eligible for a loan of $350 K for another investment property?
Hi Daz, I wasn't offended, if it sucks it sucks........... what can one do?
Property 1 is PPOR in Port Douglas. It is currently rented out while I work interstate. It will be sold when the tourism industry and FNQ eventually bounce back. I have underestimated all property values presented because I am a realist and I can afford to be realistic without pain because I aint gonna sell anything in this market.
I know CBA have certainly gone off me for some reason. I used to enjoy the luxury of a personal manager (or some such title). I knew something was up when my personal manager rang earlier in the year to tell me that CBA no longer required me to partake of his services. It was all very silly and deceitful I was supposed to thank CBA for restructuring me out of an arrangement that they had previously insisted I needed. I refused to go gracefully and forced my personal manager squirming into acknowledging that I was actually being demoted by CBA back into the equivalent of economy class. At the moment I am living rent free at my parent's house in Adelaide (they are nursing home) and I have minimal personal outgoings. I have a regular wage and would surely be eligible for a loan of $350 K for another investment property?
Would you believe I don't know what i earn? Whatever is the going rate for an RNCO2 yr 10 in SA lol.I t varies from 70-100K a year Gross. Depending on the area I practice in/ shiftwork etc. My wage goes into the bank, I live simply and have never not had enough to meet my needs comfortably . ... I know that sounds really foolish
but I find I don't worry about money much
