CBA refinance

[pulse]

Hi All,

looking for some advice on refinancing. I currently have 2 resi properties with CBA at 0.7% discount and one commercial on a Better Business Loan at associated ridiculous rates. They are all X-coll and total borrowings is $640K. LVR is about 45% overall.
I plan to refinance with my partner buying a new property in her name such that the total borrowings will be about $850K.

Things I know
I need a better rate - aiming for 0.85% discount

Things I want
2 loans, one on each resi property (LVR would work out at 75% for each leaving the Commercial unencumbered)
no X-coll
unencumbered ownership of the commercial property
I/O for 10 years
MISA on each loan

I also renovate a lot and had been spending my cash to do that. I think a LOC for investment use only would be great - I can therefore pay for renos, rates, repairs etc out of this and save my cash for my PPOR which may come in a year or two. The MISAs would be the holding place for that cash. Should I just make one of the loans a viridian LOC or include them all under a viridian addvantage LOC?

How does this all sound?
Any tips or comments.

Calcs show an annual saving of about $4000 if I do this, not to mention future benefits by not wasting cash on principle repayments.

Cheers
Pulse

 

[tobe]

Hi All,

looking for some advice on refinancing. I currently have 2 resi properties with CBA at 0.7% discount and one commercial on a Better Business Loan at associated ridiculous rates. They are all X-coll and total borrowings is $640K. LVR is about 45% overall.
I plan to refinance with my partner buying a new property in her name such that the total borrowings will be about $850K.

Things I know
I need a better rate - aiming for 0.85% discount

Things I want
2 loans, one on each resi property (LVR would work out at 75% for each leaving the Commercial unencumbered)
no X-coll
unencumbered ownership of the commercial property
I/O for 10 years
MISA on each loan


Just start with asking them to release the commercial security and see where that gets you. Its not clear from your post, but once thats done its just a matter of topping up one or both of the loans to a higher LVR to purchase the second investment property unencumbered? Just make sure you stipulate in your application the remaining topped up loans are not to be xcolled.

Im not sure about the discount. If you have any problem at all releasing the commercial security, I would go straight to another lender and re-finance the total CBA loan using only the resi securities. Once you have it aproved you can ask for the discount from both banks and play them off. Im not sure how you will go in the current climate.

 

[Qlds007]

I think you will be pushing in todays climate for a discount of that much for a relatively small loan.

Anything over $1M - $1.5M you could certainly try and barter but under
$750K you are really left with the standard discounts available.

Guess it is all relative depending on what your lenders SVR is in the first place.

 

[yo yo ma]

I think you will be pushing in todays climate for a discount of that much for a relatively small loan.

Anything over $1M - $1.5M you could certainly try and barter but under
$750K you are really left with the standard discounts available.

I agree... In this climate it will be very difficult for 0.85% off. Remember too, that CBA currently have the cheapest SVR at 9.58%. If you go elsewhere the discounts need to be larger to factor this in.

9.79% Citibank
9.67% AMP/ Suncorp/ St George
9.65% Bank of Queensland
9.62% ANZ
9.61% NAB/ Westpac
9.58% CBA

 

[Dazz]

They are all X-coll....LVR is about 45% overall.

How does this all sound?
Any tips or comments.

This all sounds hauntingly familiar. I am going through the exact same process as you with the CBA right now.

I'm at 48% LVR, proposing to release just one title, which should do two things ;

1. Release me from working ever again.
2. Increase my LVR up to 51%.


Just received a letter back from the CBA telling me to get stuffed....no way Hose A and don't ask again.

Given that, I don't like your chances.

I've got two separate mortgage brokers independently working on the same thing for me, and they are making absolutely zero headway as well.


If you are successful, let me know how you did it.

 

[ffc1883_1996]

Hi Dazz,

51% LVR doesn’t seem very high. On what grounds did they tell you to set stuffed? ‘Cos they can?

Regards - Ben

 

[Bradsdad]

0.85% is tough in todays market BUT there's no harm in asking. As it's coming from the CBA, Westpac or ANZ may go somewhere between 0.80% & 0.85% under their packages (annual fee).
You'd them probably find that the CBA would match the rate to retain the business. If CBA are willing to do 0.75%+ at present you'd be just as well staying put in the 1st year after refinancing costs. After that (even next week)....well who knows what each lenders standard variable rates (SVR) will be and how the discount will compare in real terms.
The days of each of the majors offering the same SVR appear to be long gone. They're sure making us brokers work harder for our $'s and at the same time cutting the commissions also.



Regards
Steve

 

[Spectre]

I just settled last week nearly the exact same structure - we refinanced business loans out of CBA and did them as resi... Put it all against the resi through St. George.

Total borrow was about $1.35M split between a borrower atf a family trust and 2 individuals (i.e. no company etc)

The individual borrowers were pro-packed
The trust wasnt (for whatver reasons as stg seems to flip around as to how to do things a lot)
Commercial security was released in full

Suppose yours might be a bit different but it doesnt sound like it is much.

Did an intro rate for a year then flip to .7 after year 1. Even if there is the $600 to roll the loan, the interest savings as compared to the business loan justifies it.

Note this was a full doc not low doc.
But all the stuff you want with the exception of the .85 - sounds like it would fit and you'd get the cheaper rate in year 1 to boot.

 

[pulse]

Thanks for the replies so far..

The discount doesn't worry me so much... difference is under a thousand per annum.. I was just trying to gauge my chances of them releasing the comm property... if you know someone else has managed something similar then you can push a bit harder. My sister just got 0.8% off on about $600K so always worth a go.

I feel multiple IO loans with MISAs and maybe a LOC to fund renos is the best way to go for me. Does anyone else use this approach?

The real thing that annoys me is with so much commitment to CBA products... multiple direct debits/ credits etc.. changing to another lender becomes a pain.

Cheers
Pulse

 

[Spectre]

but to stay on commercial rates when you can do it as a resi loan - along with the fees and charges associated...

In my one, we even rang cba three times to get them to re-evaluate the loans to switch from commercial to resi and they wouldnt do it

if you're bringing your partner into it you're going to have to do something and to stay with cba on current terms seems an 'interesting' decision

 

[yo yo ma]

My sister just got 0.08% off on about $600K so always worth a go.

Tell her to try for a bit more than that

I feel multiple IO loans with MISAs and maybe a LOC to fund renos is the best way to go for me. Does anyone else use this approach?

I use this exact approach but use the LOC for shares- I don't do reno's.

The real thing that annoys me is with so much commitment to CBA products... multiple direct debits/ credits etc.. changing to another lender becomes a pain.

True but that is the idea of discounted rate for volume/ wealth package etc

 

[pulse]

Time for an update..

Got my new loan, single loan $640K with the two resi properties as security. O.75% discount, IO, MISA for spare cash.

Unencumbered commercial property also

Savings are about $6K per year which is the best part now.


Cheers
Pulse

 

[Peter_Tersteeg]

Give it a few months, call the help desk and tell them you'd like to split the loan into two sub-accounts. Divide it up along the lines of your existing property values and LVRs.

This won't remove the cross-col, but it's a step closer.