cross collateralisation

Ok that makes sense. Thanks very much
can you tell me how pre approval works? Is it arranged through an already discussed loan type or structure or is the pre approved amount just that, an amount and when you a actually apply for that pre approved amount as a loan you choose the loan type then?
 
Ok that makes sense. Thanks very much
can you tell me how pre approval works? Is it arranged through an already discussed loan type or structure or is the pre approved amount just that, an amount and when you a actually apply for that pre approved amount as a loan you choose the loan type then?

For pre-approvals we tend to look to a variable loan under the appropriate lenders package. It's fairly generic, the purpose is to get the amount approved. When the property is actually purchased we'll go back and look at the actual amount and make decisions around fixed rates, loans splits, etc.

The reasoning is that you can't be specific about the loan amounts until you know the purchase price of the property. Given that time can pass between the pre-approval and the actual purchase, rates can change and it's best to make specific decisions on product choices at the time of the actual full application.
 
Ok fantastic, so having said that if I let my bank organise the pre approval (which has already started) and when I make the purchase use a broker to get the right structure. Would that be an acceptable course of action?
 
Would it be more to my benefit to select a broker locally or is it feasible to go with someone like yourself who knows and understands property investing albeit from Melbourne ?
 
Would it be more to my benefit to select a broker locally or is it feasible to go with someone like yourself who knows and understands property investing albeit from Melbourne ?

Go with Peter. He knows what he is talking about. The average broker doesn't.:)
 
Would it be more to my benefit to select a broker locally or is it feasible to go with someone like yourself who knows and understands property investing albeit from Melbourne ?

I was suggesting Sharin as he's based in Sydney. If you get to Canberra, have a chat with Jamie_M. It's always good to be able to meet people in person if possible and both are excellent brokers.

That said, a broker doesn't need to be local to you, it's more important that they understand what they're doing and make sure the finance meets your objectives in the best possible way. Cross collateralising tends to be counter productive for investors so it's a huge red flag. There's a handful of scenarios where it's quite useful, but I can't see that this applies to the scenario originally outlined.

I'm more than happy to assist, but you'll find thousands of posts from great brokers on this forum. Our track records are laid out in our posts. IMO about 80% of brokers can get the loan approved, but you're getting a loan, not advice. It's just as important to get the right finance as it is to get the right property, so good advice is critical to investors.

It's my observation that brokers on this forum are either very good at what they do, or they get good very quickly, or don't last given the quality of competition here. The local broker might be great, but the brokers on this forum with a long track record definitely are great at what they do.
 
Back
Top