How many banks do you use for your property loans?

[Propertunity]

Ain't that kind of limiting ??

I haven't found it so yet.

When I was into buy, reno, hold refi's in a big and fast way, I would give the first lender the flick within 3 months if they did not want to do a reval post reno. There were a lot of non-bank lenders just a few short years ago and it took me a while (probably 4 x IPs....I was a slow learner) to realise that they had a 6 month wait in mind

In any event, now they each try servicing me to death in the vain hope that I might move all my properties across to them......I'll keep 'em doing that too.....hoping I will.

 

[keithj]

Time to give TT or ACA a call. Or Koshie.

If it was all resi, I'd agree with you. However, I believe it's the comm prop that's the problem - it's either been (desk?) revaled or the max LVR has been significantly reduced. And since his exposure to that lender is more than one or two $M the current derisking by the banks means that he's next in line to stump up some cash.

Having good servicability & strong leases is only one aspect of risk management. Having big $$$$ x-col with one lender was a risk that was completely out of his (& his branch managers) control, he was lucky it worked fine for as long as it did.

 

[Dazz]

one per bank is not limiting because u can borrow back against that property and take that $$$ as deposit with next bank for next property, no need to X.

If you say so...would love to know how successful your strategy has been.

Talk is oh so cheap.

I have already stalked u today with an old post Dazz so i wont put up some of ur old posts when u hit that x-coll wall, u were not a happy chappy!

hahahaha.

Put 'em up chief. Stalk away. I love stalkers. I'm not some polly who needs to keep promises or stand by my word.....especially in internet wonderland. What worked yesterday is garbage today. What was garbage yesterday is today's gold. Roll with the punches etc. The whole finance world changed 2 years ago.

 

[Piston Broke]

A mate of mine has had all his borrowings with one big 4 lender for 10 yrs or so. He's borrowed a few $M secured by a few IP, a PPOR & one comm prop. He always pays interest on time, has good servicability & has a fantastic relationship with his local branch manager. However, a couple of months ago the risk guys in the back room pulled the plug - out of the blue, he was told to reduce his LVR by an unspecified amount within 90 days.
The local branch manager is v. sympathetic, but helpless. Today it looks likely that he'll lose everything in fire sales within a month.
X-coll is a risk that is likely to be fatal in the bad times.

Well know that there's a lot of details missing here.
If the bank issues a margin call, having other properties with other banks would'nt benefit the situation a great deal.
You still have to come up with the $$ or be repoed.

"unspecified amount"?
I know of margin calls but it seems strange if they did'nt specify an amount.

"Out of the blue"
Geez I been posting bout this stuff for a while, it's only "out of the blue" to those who don't believe it ever happens and lable those who talk about it "D&G".
I've seen it last 2 yrs, I seen it in the 90's and I seen it in the 80's.
It happen then, it's happening now, and it will happen again in the future.

09-04-2009, 12:38 PM Again I keep hearing stories of margin calls.
People not asked, but formally required to to lower LVR by XX amount by XXXX date. or add $XX of capital.
Some banks seem to be targeting a <50% LVR for CIP and large parcels of vacant land around Sydney.

10-04-2009, 08:05 AM Well this is only one lender on each property.
I'm mainly referring to property in the 10-15mil range.
Land banks seem first on the hit list. What is strange is that they are not defaulting or late on payments, were purchased at 50% LVR and are still very close to 50% LVR on current bank valuation. As far as I can tell they are pretty much all interest only loans.
It's just that banks are now showing their true colours and grabbing at anything they can. Phase 3 has started...

It's always a tough situation, but a lot people still believe it never happens, and/or never happens to real estate.

 

[Bigtone]

If you say so...would love to know how successful your strategy has been.

Talk is oh so cheap.

to clarify what i meant, i suggest every loan is only secured by one property, u can have many loans against each property for deposit on other properties over time, but each loan is only secured by one property, ie no x-coll, i am not as strict as one property per lender i have multiple properties with most of my lenders but none are x-coll.

depends of course on what your definition of successful is and given all my properties are resi would mean unsuccessful to some . In terms of the strategy working by accessing deposits with one lender and then buying through another lender it has been successful for me in growing a decent portfolio spread over 11 lenders .

the other issue that does not relate to me but to discussions on this thread, i have never seen a lender in effect make a margin call on resi property where no comm property is involved or business account in not with that lender. If i was buying cip i would certainly have only that property with that lender and no business accounts or resi property with x-coll.


cheers

bt

 

[FinancialPlus]

I have found that lately with the tightening of credit policies, many Banks will restrict the LVR's if you aren't a current borrower. This is another great reason to spread your loans around. It usually boils down to policy and borrowing capacity for me.
As you can see it doesn't matter how great the relationship with the branch manager is, when the time comes he doesn't have a say.
We have 2 properties (not cross collateralised) with one lender and the others with different lenders. Wouldn't hesitate to move them if policy suits better.

 

[Thann]

Currently, I have 2 IPs + PPR, using 2 banks.

 

[Lickster]

I have PPOR and IP1 X-colled in a package, plus IP2 with another bank. As I go down the path and buy more I intend spreading further. At this stage I see the package as a firm base from which to expand, and have ready access to combined equity from two properties. Would like to split but thinking a little fiddly right now, so I see it as the best of both worlds.

 

[sash]

Does not matter if it is cross collateralised or not with one bank....even if you have separate loans a lot of bankd cover them selves in the contract by saying that they can look at any other asset you have.

Who knows when banks in Australia use the "all monies clause" in my view why not protect yourself.

My suggestions are as below:

1. Try to keep the overall LVR with any instituion under 80%, MOst of mine were bought with 5% deposits but within 2-3 years most have come down from 95% LVRs to 65%-75%. This is despite people telling me you only make money in upper middle class suburbs.

2. Try to keep the lending with any one institution under 750k.....lots of banks have a process of reviewing customers with more than $1m in borrowings. If you have less than $750k.....there are too many people who have these types of loans...the banks do not have the resources to review all of these people unless they are in default.

3. Do not buy luxury property ($1m plus) as this is the one area in residential lending which worries bankers.

4.

Nathan,

Yes, I am aware of the ''all monies clause'', but I think that there is still a difference between having all loans with one lender not x-coll vs. having all loans with one lender and x-coll.

The next question then is in what situations has this ''all monies clause'' been enforced?

 

[Piston Broke]

While good points have been made i think you need to look past all that.

If you had a managed protfolio 5 IPs with separate loans, and one got a margin call what would be the result?

You either come up with the extra $$ or get foreclosed.
If you get foreclosed and the bank realises a loss, then you either pay up the shortfall or go bankrupt.
How will this foreclosure (which looks like a default) affect the rest of your the loans?
Will it give the other banks the right to call in their loans also?

Maybe you have an LOC to draw on and make up the difference in LVR.
So you have just increased you total LVR, meaning a higher interest payment.
If it's a portfolio of <1mil, you can pack shelves at Coles to make up the interest increase. If your portfolio is >5mil, then it may not be so easy.

Maybe you use the LVR to make up the bank's loss.
You have now lost all the $$ put in the deal + the banks loss.
Still increased LVR, and less income to pay interest if it was +cf CIP.
So higher LVR and higher expenses.

It's hard for people to think about this stuff before it happens because of the "only happens to others" syndrome.
Which is why I agree with sash and have always posted about having & building equity.
Unless you build equity your working for someone else.

4.

But more than else i agree with his very profound 4th point...

 

[Indifference]

2 Banks... 1 for Resi (package setup) and 1 for Business lending. (CIP)
Its been OK so far...

 

[wobbycarly]

4 IPs, 1 PPOR, all with A*Z, all somehow tied up, just a smidge over the magic 'M', with LVR approx 65%.

 

[Bigtone]

Does not matter if it is cross collateralised or not with one bank....even if you have separate loans a lot of bankd cover them selves in the contract by saying that they can look at any other asset you have.

Hmm can't agree with that, if they are not cross x then if you sell a property and or refinance one property when they r not x -coll it goes straight to discharge department and likely to go straight through. If X-coll then it can go to assessment and all sorts of things can then be demanded.

Can be much more pro-active if individually secured and much much more flexible, especially when some properties in portfolio may have gone up and some down, why put handcuffs on yourself? Even if u r into that stuff keep it to the bedroom not your investments

 

[Piston Broke]

why put handcuffs on yourself? Even if u r into that stuff keep it to the bedroom not your investments

Sometimes it's the only way to keep the "debauchery" going.
And of course you supply the handcuffs, gaffa tape & rope, while they bring the stillettos.

 

[ugotadollar4me]

My rule is a max of 3 properties to one lender with a borrowing amount of around $1m
OR 1 property to 1 lender if its over a mil

easier to escape if you need to.

 

[Big Tone]

Who ever is dumb enough to give me the money, I'll take............
As long as it works for me.

Big Tone

 

[D.T.]

Who ever is dumb enough to give me the money, I'll take............

You see yourself as a bad risk?

 

[angela1]

we have 5 mortgages spread over two banks, looking at refinancing soon and would be happy to go with one if they can offer a good enough deal.

 

[Big Tone]

You see yourself as a bad risk?

not a bad risk.............just a big risk.

I have no problems losing o.p.m!
I transfer the risk to the lender.

I rarely if ever put anything I own 'on the table' and limit the ability of the lender to get back more than what they lent the money for.



Big Tone

 

[Rolf Latham]

we have 5 mortgages spread over two banks, looking at refinancing soon and would be happy to go with one if they can offer a good enough deal.

Hi Angela

In your view, what would constitue a good enough deal, and what are you willing to trade for that good enough deal ?

ta
rolf