Collins securities lodoc refinance product

[Rockstar]

These guys just sent me an email with a seemingly attractive lo doc product. Anyone taken this offer up or are there similar lodoc deals around at present?

Unlimited Cash out up to 80%*
No Bas or trading statements required
Financial declaration and accountants verfication only required.
No LMI - one off credit risk fee
Loans up to $1,000,000
ABN only required for 12 months

IR quoted at 8.68%

I have a duplex pair with a 60% LVR through St George. Wouldn't mind grabbing an extra 20% cash out (around 170k) but it will cost me +2% for the deal.

Their lodoc standard requires no BAS or accountants declaration - though doesn't mention current IR

Having seen these offers I can only assume that credit may be freeing up a little in the lodoc market??

 

[Aaron_C]

The pertinent question is - what is the credit risk fee? Sounds good though - lots of lenders are very, very strict on refinancing lo-doc loans, especially if there's cashout!

 

[Rolf Latham]

many brokers will no longer do low Doc loans because of the NCC P compliance issues, even where you can get clear direction as to what income the client may have from something like an accountant declaration.

It is the this reason that many of these products are no longer available to all for regulated home loans.

The Collins product is very likely backed by someone like red Z or Resimac and is probably quite main stream in nonconforming range

Part of your challenge will be that you arent payimh 2% extra on 170,000 but on the full balance of loan.

but if that is the price that one needs to pay to continue your business then that is "cheap"

ta

rolf

 

[Mick C]

Hi Rockstar,

The product you mentioned is underwritten by Resimac ( as Rolf mentioned)....but as Arron pointed out the risk fee is not gonna be cheap.

Risk fee on a 80% LVr with Resimac is around 3.8% of your loan ( + you can not CAP this...so it's max 80%....so you may need to go to 75% + risk fee)

IR is "starting" from 8.68%....last time we wrote a 80% refinacne + cash out it was done at 9.20% + resimac has a MAX 25% cash out policy on your total loan amount. Def not for everyone...

Just to correct one mistake, you DO need a accountants declaration ...in fact that's all they ask for. Say you do go with resimac;

1. It's not easy to refinance back out- the new lender would double think, unless your LVR is 60% or your going for a full doc + under 75% LVR

2. Say after a few years you can produce the 2 years financial and jump back into full doc lending...if your stuck with Reimac- they will place you into their full doc lending but their rate still suck at ~7.00%



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The cheapest way to get loc doc refinance at 80% is to be able to produce;
* 12 month trading statements- 7.60%
* 12 month BAS - 8.00%
Compared to accountants letter only > 8.80%

 

[Rolf Latham]

Adelaide bank up to 70% loan to valuation might be good option for you here

ta'rolf

 

[Rockstar]

Thanks for the feedback guys. Just back in after the Hacking fiasco.

but if that is the price that one needs to pay to continue your business then that is "cheap"

That's what I'm thinking Rolf. No point me showing BAS at present though accountant would sign off on a projected amount but maybe not as positive as I would be on my projected income. Would be parking the bulk of my cash back into the offset so IR not so crucial even if I draw it all down for a project. As you say, cheap cash to keep business ticking over.

Just to correct one mistake, you DO need a accountants declaration ...in fact that's all they ask for. Say you do go with resimac;

Just checked their Low Doc Standard features again Mick and it says no BAS and no accountant letter. Might give them a tingle next week and get the facts straight.