Disheartened and Dissapointed

[MelbGal]

Some suggestions:

I know that bankers have told me that Line of Credits are higher risk as you could in effect never pay off the loan, but I doubt that this would have anything to do with the $amount of the loan and rather it has to do with whether the loan got approved or not. Still, as a thought, have you considered whether you would be eligible for a larger loan if you changed the product i.e. all loans as a standard variable rate with interest only (rather than a line of credit).

If your loan is borderline, then have you considered reducing or cancelling your credit card limits? Consolidating all debts. Paying off HECS.

Can your broker take into account the potential tax deductions you will get from the investment properties as this will increase your cashflow.

I actually thought my lender used 70% of rental income rather than the 60% you quoted.

Have you tried other lenders ? I found that when I played with their calculators I was eligible to borrow more with some lenders than others. This may be a good indicator of which banks will loan you more.

 

[Piston Broke]

I know that bankers have told me that Line of Credits are higher risk as you could in effect never pay off the loan,

Banks want you to have the loan forever that's how they make money.

 

[Dazz]

I am need of some advice.

...........................

I am losing hope.

Cheers

Daniel

No doubt you have made contact with Kristine and you are well on your way to regaining your hope.

 

[cu@thetop]

No doubt you have made contact with Kristine and you are well on your way to regaining your hope.

Dazz???!!!???
Is that you?
Great to have you back and I for one have missed you and I don't care what abuse you hurl at me for saying so.

Things had got too quiet around here lately.

 

[888]

I thought these rules imposed to and by lenders are for borrowers benefit, so that in case the economy turn a corner for the worse for example, the borrowers have some breathing room to pay for his/her mortgage obligation.

If you stretch yourself too thin, you're pushing your luck a bit if things go wrong. My suggestion is to find another IP that you can afford comfortably, maybe $30-40K cheaper than the one you're looking at, leave yourself a little bit room to move in case interest rate started to climb, etc.

 

[bawatkins]

Homeside do only count 60% on a new investment purchase but there are other lenders that will let you use upto 80% of the rental income.

do you know why the 2nd lender knocked you back?

 

[Bradsdad]

your broker should have been entering your details into the lenders (Homeside & ?) servicing calculators and known how much they would look at. If the lender came up with a different answer he/she should then argue the point if they got it wrong (they do on accassions) or fessed up to you they he/she got it wrong. It doesn't sound like you are at the stage that your reliance is too heavily based on rental income for a declinal.
As mentioned, the servicing models between banks can vary so all may not be lost. I'd suggest having someone else run through the numbers for you before your CRAA becomes a factor.

Regards
Steve

 

[tobe]

Also I think Homeside do not automatically take into account negative gearing benifits, they will make an allowance on a case by case basis. it sounds like they werent the best option to start with...

 

[Spectre]

Dazz???!!!???
Is that you?
Great to have you back and I for one have missed you and I don't care what abuse you hurl at me for saying so.

Things had got too quiet around here lately.

Its almost like when The Rock shows up on WWE isnt it



(A-la... Finally, the Rock has come back ---- to SS...)

 

[MelbGal]

Quote:
Originally Posted by MelbGal
I know that bankers have told me that Line of Credits are higher risk as you could in effect never pay off the loan,

Banks want you to have the loan forever that's how they make money.

agree, but my point was that they are higher risk, which may affect his borrowing capacity. Banks also price the risk into the rate, which is why typically (but not always) they are 0.15% more than standard variable rate loans.

 

[Rolf Latham]

Hi MG

Not so much higher risk, more like they assess the repayment period differently

Some lenders will assess an LOC over a 20 year PI period, vs say a 5 yr IO loan over 25 years.

In an ideal world, the lender wants you to have the loan for as long as possible, but their risk position in most cases is that they want you to pay it down, thus increasing your risk exposure to the deal.

This is why you get illogical outcomes such as, Mr Borrower, you cant afford the IO repayments, but we will make the loan to you on a PI basis so that should anything happen u will have a buffer....................totally counter intuitive, immoral and possibly in breach of the trade practices act and the UCCC............who is protecting whose interest ?

ta
rolf