Finance woes - can anyone help?

Hi All,

After some help from the experienced brokers if possible as we're running out of options.

We have about 3.9M of property including our PPOR.
We have total loans of 2M against them (owing about 1.6M) and we currently have about 300k in cash offsetting various loans.

All current loans are with WBC except 1 tiny one with BW.

We have an offer on a place at 620k and have been trying to get (some) finance.

We can purchase it outright if we need to (and that looks like what we'll have to do) by scraping all the redraws and cash together, but that leaves us a little too close for comfort. We also have one property on the market, but would rather not enter into a bridging scenario.

So far, WBC took pretty all but 1 day of our finance approval time to decide that they 'didnt want any more exposure to us' and that we missed serviceability by some 3k a month (wouldnt explain how they arrived at this figure). They stated that we'd be drawing down on our (large) LOC continually however this isnt the case.

We had taken 200k out of our LOC and put it in an income producing managed fund. Seems like a simple concept to me - Borrow money at 6% earn 10%. However the bank wouldnt recognise the income side of the equation, and didnt seem to like the explanation re the 200k hole at the other side of the equation. I have since reversed this in preparation to pay cash.

We then spent the next 2 weeks through BW going for a 60% lodoc only for them to turn around yesterday and say they would do it, but not in the trust name (which was stated at the start of the process)... Arrrgh

Settlement is due at EOM and i'd like to get SOMETHING in place then, or shortly after (likely after now).

My wife is currently coming out of a partnership thats winding down, and resurrecting business in her own name so her incomes not strong. Our household income is probably around 160k.

Rental income is about 8300 p/m (gross)

Our first attempt was through WBC direct, the 2nd was through broker who tried hard, but don't think he quite got it..

I'm obviously concerned about credit file references.

Any suggestions, offers to help, appreciated :)

Bruce
 
On the surface.....your issue is that you have eveything with WBC.....not a good thing as they have pretty much closed shop to all lending as they have a very stupid new credit system which is inflexible. Also you have on the banks watch list from a risk perspective as you have over $1m in lending. ALso your CF situation is only a 100k....which means you have high outgoings.

Your asset situation is similar to mine....and I have yet to hit my ceiling. The only difference is that I have spread my lending across 4 institutions, have 50-60k cash flow positive, and about 170-190k in rents.

If you can shift some loans to other lenders ideally keeping loan under 700-800k per lender and push rents up(??) then you may just scrape by. If you you are near CF+ with tax deductions with your good income of 160k...you could qualify for the 620k assuming no further credit tightening is imposed.....but everyone is putting thumb screws down.

The other thing is risk management....WBC may have you by the proverbial.

Good luck.

Hi All,

After some help from the experienced brokers if possible as we're running out of options.

We have about 3.9M of property including our PPOR.
We have total loans of 2M against them (owing about 1.6M) and we currently have about 300k in cash offsetting various loans.

All current loans are with WBC except 1 tiny one with BW.

We have an offer on a place at 620k and have been trying to get (some) finance.

We can purchase it outright if we need to (and that looks like what we'll have to do) by scraping all the redraws and cash together, but that leaves us a little too close for comfort. We also have one property on the market, but would rather not enter into a bridging scenario.

So far, WBC took pretty all but 1 day of our finance approval time to decide that they 'didnt want any more exposure to us' and that we missed serviceability by some 3k a month (wouldnt explain how they arrived at this figure). They stated that we'd be drawing down on our (large) LOC continually however this isnt the case.

We had taken 200k out of our LOC and put it in an income producing managed fund. Seems like a simple concept to me - Borrow money at 6% earn 10%. However the bank wouldnt recognise the income side of the equation, and didnt seem to like the explanation re the 200k hole at the other side of the equation. I have since reversed this in preparation to pay cash.

We then spent the next 2 weeks through BW going for a 60% lodoc only for them to turn around yesterday and say they would do it, but not in the trust name (which was stated at the start of the process)... Arrrgh

Settlement is due at EOM and i'd like to get SOMETHING in place then, or shortly after (likely after now).

My wife is currently coming out of a partnership thats winding down, and resurrecting business in her own name so her incomes not strong. Our household income is probably around 160k.

Rental income is about 8300 p/m (gross)

Our first attempt was through WBC direct, the 2nd was through broker who tried hard, but don't think he quite got it..

I'm obviously concerned about credit file references.

Any suggestions, offers to help, appreciated :)

Bruce
 
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Hiya Bruce

With barely 2 weeks to go till settlement, I believe its better to sit back for a day or 2 and take stock.

As u say, your CRAA file might be getting sticky.

I know its not helpful, but I would not have gone the WBC retry route via broker after direct said no.............nor would I have had a go at the trust property with BWA, since its known upfront (to us at least) that BWA dont do trusts on lo doc.

Without all the info to hand its hard to say where to go from here.

Maybe have a chat with someone that has a better knowledge of the CURRENT rules of the game, rather than bankers or brokers who seems to like to throw mud to see if it sticks

ta

rolf
 
Hi Guys,

Thanks for responding.

I maybe was a little unclear. I didn't revisit WBC via the broker so only one WBC Application, and one Bankwest one (this one via the broker).

Rolf,

I have sent you an email.

Regards.

Bruce
 
or pay cash, settle on the property, then draw on the unencumbered property post settlement and reimburse? Gives you some time up your sleeve too
 
Thanks all,

I'm investigating a few options currently with Rolfs help.

Paying cash is my get out of jail card but Im mindful of using the cash buffers (as aposed to equity drawdown) as the cash may be needed for non investment purposes in the future. In this case the refinance and drawdown would leave a deductibility issue (as far as I can see).

Bruce
 
Yes, it could be an issue.

Maybe a way around this is for a separate entity to lend you the money and you letter refinance this loan with another. Maybe you or your wife could lend the money to the entity to start off????????
 
Yeah,

One option would be to distribute the cash to ourselves, then lend it back (with a loan agreement of some sort) but not sure how these things are viewed in terms of timeframes etc.

I'd still rather use someone elses money ;)
 
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