Experience with NAB portfolio facility

[mitch]

Greetings,

Over the years ive had plenty of trouble borrowing money, ive always found a way although the cost of the funds hasnt been the cheapest (rate and setup costs) due to their fear of my ability to service the loans.

Last year l began looking for funds that are compeditive with the market.

l approached the big four and with the size of my assets ( over 1 m ) and a lvr of less than 60 % l felt in a strong neg position but l got stuck with the mum and dad lender at the wtb & cba .anz put me onto their anz broker and he could/did offer me a low doc.

The NAB looks positive , l got past the little lender and onto the blokes that talk 7 figures.

Ive been offered this portfiolio facility up to 70%lvr with a $550 pa fee , but most importantly it frees up 200k of equity with no issues on obtaining these funds , just write the cheque.

The thing is l have to put all my eggs in the nabs basket.

The HUGE benefit for me is no hoop jumping for the next house.

lf l add another property to the portfolio my line of credit extends up to 70% of the nabs vals.

Any comments from people using this from the nab ?

Regards Mitch

 

[geoffw]

Mitch

+ & -

I've got a great Personal Banker in NAB. He's done magic for me.

But the magic stopped when my portfolio reached a limit. It was $1.5M for me- I think I was luckier than many.

I had one deal, which turned out to be a great deal for me, which PB managed to swing against all odds.

It was cross collaterised, which took some untangling later on. But it was worth it. $250K profit (less CGT ) thanks to an excellent PB at NAB.

Having said that- I was quite happy going with NAB forever, not needing a mortgage broker.

But then NAB drew the line. Not just for LVR- but also, in the height of the boom, I could not reval:
.It had been less than 12 months since the previous reval. NAB had changed their rules.
.I became self employed. That completely changed servicibility requirements.
.I had two multiples (Flock of bats + 3 cottages). That severely restricted lenders.

Mitch, for you now- "begin with the end in mind". Don't get caught up in tangles of red tape just when you're ready to go again. Approach one of the friendly brokers in the forum.

You can get the service from your PB.

But, when you grow that little more, you will need something a lot more.

 

[Qlds007]

I think geoff is correct - NAB will be wanting to pull the rug before too long for one excuse or another - serviceability issues or level of exposure etc etc.

Whilst what starts off as an ideal marriage often ends in tears. Seem to spend most of my life unravelling the mess NAB gets its clients into.

If your PB is any good he will get promotion and move on forgetting about you and your portfolio. If he is no god he will stay put and cause you grief.

 

[Rolf Latham]

Hiya

Its a nice product, but why the Low LVR ??????????????

10 % on a mill propertly geared is another 500 k of growth asset ?


ta
rolf

 

[Peter_Tersteeg]

As Geoff has learned, NAB looks easy up front, but I've seen several instances where people put all their properties with one lender only to get into a difficult situation later when they come back for more. This technique will make the first loan easy, but the cost is you hand over a lot of power to a single lender, and the NAB is not really one I would consider to be really 'switched on' to the needs of most residential investors.

Depending on the makeup of your portfolio, you may take a multi staged approach to accessing the equity in your properties. By spreading the properties between several lenders you can take advantage of a mixture of the best rates and policies available.

A client of mine wanted to purchase a property worth $1.4M, but didn't have any cash as a deposit. Several lenders said they would do the loan, but they wanted all of their portfolio (8 properties), and they would be right at the edge of their borrowing capacity.

I left 4 properties with the existing lender for those houses, but did some small top-ups to access the equity in them.

Another 2 properties were moved from the NAB to other lenders. More equity was accessed.

2 properties weren't touched as there wasn't any equity in them.

The new purchase was put with yet another lender and 20% plus purchase costs was accessed from the top-ups and refinancing of the other six properties.

The execution of this process took 4 months and took a lot of effort to coordinate, but the benefits are ongoing...

Six months later they purchased another property.

They're now accessing the equity in the house purchased for $1.4M, as it's worth considerably more. The cash from this will allow them to purchase even more properties in the future.

At this point they've not only achieved the initial deal they wanted, but they've gone way beyond that. None of the individual lenders would have let them borrow beyond the $1.4M purchase.

Every one of the properties is also at a better interest rate than what any of the individual lenders initially offered.

 

[DavidMc]

I'm also with NAB and have just refinanced.

My broker said that while the new portfolio product is flexible, it's too expensive. The same functionality or features can be acheived at a lower cost via their exisiting products. I haven't done the comparision myself however for your reference I'm on a choice package with a few 100% IO + Offsets, LOC, fee free-ness, gold visa (the usual)).

I'm a little behind you (just over $1m of lending) so perhaps there is a break even that I'm yet to reach or some another benefit such better DSR calcuations.

 

[Celeste]

Hi all

I am also with NAB - but I buy, reno & sell - only holding 1 long term at the mo. got 1 reno for sale, 1 on hold, just settled on my next project and settlement for the adjoining duplex at the end of the month.

My personal banker is really good - told me one day I could borrow 270k on rough figures - rang her 1 week later, sharpen your pencil and put new batteries in you calculator I said. What have you done she says, I just put offers on 2 props and want to borrow 480k. 3 days later got the OK for the lot.

Anyway by the end of the month I will be in debt 1.3m ooch. I only started in may06 - gee can't I spend money!

My understanding is, you go along one path using certain banks,brokers etc and as you travel along, needs, wants, economies, bank products change and you reassess your portfolio and strategies, then you make changes. Sell , refinance, buy, reno etc

So I feel you go with whom ever suits your purposes at the time and reassess when it changes.

Celeste

 

[mitch]

Greetings,

Thanks for all your input.The two big benifits for me is the ability to have access to 200k on this line of credit and this package will save me $65 per week as the interest rate is lower.

lve been in sales all of my investing life so the issue of servicability has been a constant thorn in my side not to mention the mind melting question they all ask " what if all your rental properties were vacant ?" and that is why l think the nab wants 70% lvr.

The broker l used last time took a month to get me approved and the lender was a little bit shady on the cost of their fees untill l was locked in (and then it got very shady).

l must say its a mine field out their trying to organise finance and this package seems to suit my needs for the next property , come the the one after that one l can always look for a better deal.

This is the forth time ive approached the nab for funds in the last six years and the first time ive gotten past the front home loans people to a larger lending type of area so they are talking the talk , l hope they will walk the walk.

Regards Mitch

 

[Rooster]

Choice Package Rate??

Hi,

Just wondering what other people are getting as a discount of their interest rate in the "Choice Package". Has NAB budged on their 0.5% discount or don't they budge?

I have asked my new personal banker to reassess my loans. eg - I think i deserve better treatment!! Seems strange new customers who borrow 250k or more recieve .7% discount straight up??

Just interested in what type of bargaining other people have done??

Cheers

Rooster

 

[asdf]

Every one of the properties is also at a better interest rate than what any of the individual lenders initially offered.

That sounds impressive PT. Were these low or no-doc loans? I am interested to know if many have accumulated $2M+ worth of full doc loans on IPs purchased only in the last couple of years. ie. negative or neutrally geared one. Its very easy to suggest that one "pulls" equity out but I reckon this is somewhat more challenging where the serviceability monster becomes increasingly harder to tame, especially in the current tightening environment.

 

[DavidMc]

Just wondering what other people are getting as a discount of their interest rate in the "Choice Package". Has NAB budged on their 0.5% discount or don't they budge?

Yes. I'm on 0.8% discount with around $850k of borrowings.

 

[simonjulie]

We went with some nab finance a while back when we were struggling for serviceability and it benefited us at the time. Time however moved on and we found that the only way to escape nab's vice grip on our portfolio was to refinance some of the properties away from them until we held the better deal. The last val we got on the two remaining properties they hold (we originally had four with them)was tremendous and we are happy to leave those assets with them for now for they now cover the original loan by themselves.
Have fun
Simon

 

[Celeste]

Hi all

Speaking about NAB - I got a nasty surprise today , received the doc's to read for my next loan. OH oh new fee, keep in mind I buy, reno, sell. Now if I close the loan B4 4 years I have to pay $900.00 - now my loans last 6mths, so now I have another $900 to add to my budgets. not happy jan!

I just did a conveyancy course to do my own settlements (a saving of 2K per project) now I have lost 1/2 of that to the bank.

I rang my banker and asked her to waive it (it was introduced 2 months aho because of bank hoppers, why didn't she tell me about it B4) - no can do - then speak to someone about it, I am operating differently to other investors. I am not bank hopping, if not I think I will have to go elsewhere. I will see what I can do she said. Give me the name of someone in the east who can waive it. no answer. I will find someone. really not happy jan!!

Celeste

 

[willy1111]

Hi Celeste,

This has become more common amongst the majors in the last 6 or so months - ranging from $700 to $1000 if paid out in the first 3 - 4 years.

Depends on the type of loan of course.

Not sure if it is possible or not - but one line of thought could be to have a loan that is portable, so you just change the loan over to the new property without fully discharging it - there are still fees to do this though but shouldn't be as high.

Or as mentioned find a more suitable loan/lender

 

[Rolf Latham]

Hiya Celeste

Cost of doing business Im afraid.

Lenders do pay various things and have costs to do a loan, where in many cases there is no margin for the first 8 to 12 mths.

Be happy its not RAMS where you would pay 2 % for the first 2 years.

Its like I suppose any new cost suddenly forced on a business .......


ta
rolf

 

[Celeste]

Hi all

I am mainly annoyed with my personal banker, who I talk to just about every week, she did not tell me it had come in, when I rang her re getting the loans ( this is the second in 2 months), she knows what I do and that it would effect me.

Not happy about that!!!!

 

[Celeste]

Hi all

Thought I would update you all on the $900 early exit fee.

I asked the bank to waive it, 1st response can't, so I threatened to go elsewhere. Guess what went in to sign for latest loan, thought I would sort the fee out later. Anyway she had gone higher up the ladder and got approval to waive it for me, not just this time every time.

See, my moto of just ask you never know - so far has paid off.
Celeste