nooooooooooooooo DT
concentration risk applies to the borrower, more so than the lender, though many lenders dont like u to have too much with them either.
Its almost a whole chapter and a half of the book, banks behaving badly.
If you have all or almost all your total borrowings of 2.5 mill say with the one lender to get the extra 10 or 20pts, youd have to have rocks in your head.
Not often I make such strong statements.........................at another time in the credit cycle the faiy tale many not end, but........
If you are the average style somersoft reader and player, you will be close to the 80 % lvr, and/or close to you serviceability limit.
When u next attempt to access some cash equity for the next property the lender may say NAH.
You then say, bah, humbug, I will just refinance a property...........you the find the lender says nah, take it all to elsewhere or nothing.
Most brokers would say, GREAT, what a great opportunity to get new comm. Id say, in the current environment all those apps to get those, IPs off that ONE banks books wont work well, indeed you could stuff any chance of moving further in your investing career fr the next 12 mths, which seems the average period of "confinement" to outgrow those last CRAA enquiries.
Further, you have some financial issues, and you sell a pace and expect 300 k to tide you over for the year...........but the lender says, sorry sir, the porceeds of that sale are all ours.
Like with xcoll, most people say, ah Rolf, stop the scare mongering.... ....agreed, wont happen or be an issue to most. In many cases you will be 100 % fine. But how will u know that you arent the one that will be my next (often preventable) hard luck story.
Again this week, I have 2 people that have come to enquire about a rescue because their current lender which was once their unshakeable rock and confidante has voted them "off the island" and asked them to effectively sell EVERYTHING.
Remember you are only as good as your last repayment and your last annual review, and even with both of those in order you can still be asked to leave.
ta
rolf