How soon after settlement will CBA accept a reval?

Question for brokers experienced with CBA.

We settled a place 2nd July, and by all market comparisons got a pretty good deal.

How long do I need to wait with CBA to refinance and potentially pull some equity out to reinvest?

6 months, 12 months?

Cheers,
Nath
 
Question for brokers experienced with CBA.

We settled a place 2nd July, and by all market comparisons got a pretty good deal.

How long do I need to wait with CBA to refinance and potentially pull some equity out to reinvest?

6 months, 12 months?

Cheers,
Nath

Hi Nate

I dont think CBA has an embargo per se

I think the valuers will be your biggest issue.............valex will generally not do a new val if the old one isnt at least 90 days old

You may have to refinance to another lender..........but still a valuation issue.

What is the LVR ?
ta
rolf
 
Yep Valex is the major problem here. Sometimes it is possible for the BDM to order the valuation to bypass Valex if it has been valued before within 90 days but you would need a very good reason to do so (such as major renovations etc).
 
Thanks Guys,

It's 90% LVR....it would only be a worthwhile exercise if the val came in 60-70k higher than purchase price.

Which with comparables is not unrealistic.

So maybe give it 6 months an then give it a crack...if the valuer is the biggest hurdle?

Nath
 
Thanks Guys,

It's 90% LVR....it would only be a worthwhile exercise if the val came in 60-70k higher than purchase price.

Which with comparables is not unrealistic.

So maybe give it 6 months an then give it a crack...if the valuer is the biggest hurdle?

Nath

k

Hope ur serviceability is good for another prop with CBA since they wont do "cash out " above 80 %

ta
rolf
 
Sorry Rolf,

What do you mean by cash out?

may be a dumbe question :)

Nath

say your servicing is tight with CBA and you want to use NAB for the next property loan.

CBA wont give you the cash for the NAB loan deposit unless you also service
on their number.

In addition, release of cash for say shares is limited to an 80 % lvr


ta

rolf
 
Yep Valex is the major problem here. Sometimes it is possible for the BDM to order the valuation to bypass Valex if it has been valued before within 90 days but you would need a very good reason to do so (such as major renovations etc).

What is considered "major renovations"?
 
say your servicing is tight with CBA and you want to use NAB for the next property loan.

CBA wont give you the cash for the NAB loan deposit unless you also service
on their number.

In addition, release of cash for say shares is limited to an 80 % lvr


ta

rolf

Okay i get it :)

Back in 2005 we had an 80% LVR loan secured against a property with ANZ.

We then added what they called then a "supplementary loan" secured against the same property...leaving the original loan under 80%...but the "second" mortgage took the lvr in total up to 90%.

So we used the funds from the second mortgage as deposit to get into another property.

Is this not a doable option with CBA at all with current lending criteria?

Nath
 
say your servicing is tight with CBA and you want to use NAB for the next property loan.

CBA wont give you the cash for the NAB loan deposit unless you also service
on their number.

In addition, release of cash for say shares is limited to an 80 % lvr


ta

rolf

Hi Rolf

With that being the case, how does one ever do the "buy below market", renovate and refinance to purchase more ? How does one ever get off the CBA bandwagon?
 
Hi Rolf

With that being the case, how does one ever do the "buy below market", renovate and refinance to purchase more ? How does one ever get off the CBA bandwagon?

wait till you have an LVR below 80%, or refinance away from the CBA bandwagon to a lender who has diferent cashout policies. Most people would just be convinced to do both the refi and the new purchase with CBA, Pay LMI on the whole lot, and have them xcolled.

Not a problem until you have about 3 or 4, and most investors stop at one of 2 properties.
 
Okay i get it :)

Back in 2005 we had an 80% LVR loan secured against a property with ANZ.

We then added what they called then a "supplementary loan" secured against the same property...leaving the original loan under 80%...but the "second" mortgage took the lvr in total up to 90%.

So we used the funds from the second mortgage as deposit to get into another property.

Is this not a doable option with CBA at all with current lending criteria?

Nath

So.....does the option above not exist with CBA?

Cheers

Nath
 
It is, but it doesnt avoid LMI and cash out restrictions as mentioned previously.

So assuming we get a reval that makes it worthwhile....would we just pay LMI on the second mortgage portion....as we have already paid LMI to go to 90% for the first mortgage?

If serviceability is non issue....can we then use these extra funds for anything we want ie deposit for another IP?

Nath
 
CBA are pretty strict on their cash out provisions, especially when the LVR is above 80%. So you would need to show them what you are intending to do with the extra funds. You might show them the car you would like to purchase, the credit card you would like to refinance, or the holiday you have planned.

What you might have trouble with is showing them your plans to take their money to another lender as deposit on a new investment property and loan. they would then ask, how can you afford this new loan? You would say, thats my business with the new bank, then they would say, not with our money chump, lets wait until you have found this new property and have the loan approved before we stump up the cash for the deposit.

At 80% things are easier, but its a far cry from bygone times when you could just say the purpose of the funds were 'future possible personal investment, property or shares'.

Speak to a good broker about your options. Get the vals done first before making an application. Dont sweat the small stuff.
 
CBA are pretty strict on their cash out provisions, especially when the LVR is above 80%. So you would need to show them what you are intending to do with the extra funds. You might show them the car you would like to purchase, the credit card you would like to refinance, or the holiday you have planned.

What you might have trouble with is showing them your plans to take their money to another lender as deposit on a new investment property and loan. they would then ask, how can you afford this new loan? You would say, thats my business with the new bank, then they would say, not with our money chump, lets wait until you have found this new property and have the loan approved before we stump up the cash for the deposit.

At 80% things are easier, but its a far cry from bygone times when you could just say the purpose of the funds were 'future possible personal investment, property or shares'.

Speak to a good broker about your options. Get the vals done first before making an application. Dont sweat the small stuff.

Thanks Tobe,

So they are more comfortable with my intent being to blow the cash...rather than re-invest it....wow...

thanks for the tips,

Nath
 
Yes, it seems counter intuitive, but blowing the funds on a one off consumer durable limits the banks risk to just that amount. Giving you 'seed' capital to get further into debt (albeit 'good' debt) they dont control is way riskier.
 
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