Hsbc & Macquarie Not Allowing Redraw?

[GoAnna!]

No...just general.....for all

Alot of banks are starting to scrutinise people with loans over 600k. I see a lot of people have total loans over 1mil with one bank...

Also LMI premiums are based on risk loans under 300k are lowest, then 500k, etc.

Just because you have $600K plus with one bank doesn't mean this is one loan for one property. We have parcels with different banks where 1 mil = 3 properties.

 

[Herbus]

Just the facts, ma'am...

Hi folks, don't mind me jumping in at this point,.. I'm new to this and still educating myself, gearing up to get an IP in the next few months... after reading all of this I have to clarify:

Everything I've heard at seminars and read in books indicates that a LOC is the best facility to have, or certainly the most common... now I read about a bunch of you switching to offsets instead... I really can't see too much of a difference in each as far as being a resource for investing... I DO understand the concerns over freezing LOCs, but I would love to know what the pros and cons are to the LOC and offset - there must be (or was) something more attractive to the LOC than the offset, I just can't see it?

a) LOC - You only pay for what you draw out and have the rest as ready funds.
b) Offset - You effectively draw out all the funds, but put those unused back into the offset, effectively paying the same as you would in the LOC (pending any rate difference)...

Is this the case, or not?

Thanks for enlightening me.

Cheers,
Drew

 

[s_t]

It isn't a case of one or the other. To have an offset, you need a loan of some sort. For example, a LOC.

The discussion has simple been about whether to leave the LOC undrawn (ie. the loan is approved, but you haven't used it, or all of it, yet), or to draw it down (withdraw the funds) and put them in an offset (or instead perhaps some other account that will accrue interest).

There is no difference interest wise. If you have an offset attached to your LOC, the bank, when calculating interest, does the maths on drawn funds minus offset. eg. 10% interest rate, $100k (drawn LOC) - $10k (offset) = 0.1*(100-10) = $9k for the yr.

 

[grossreal]

hi all
drew there reason is that you have a better liquidity position and if banks change their lending criteria then you are frozen as you put it.
i thry to do a couple of things
1 use as much if not all banks money
2 leverage as high as possible.
3. try to keep banks fingures off any equity or spare cash
4 mitigate any loss
and david thats exactly what they will do they ask for either up the equity value position of the the loan or inject equity
both of which I would not do so closed one and changed their mind on the other.

 

[DavidMc]

and david thats exactly what they will do they ask for either up the equity value position of the the loan or inject equity
both of which I would not do so closed one and changed their mind on the other.

Given this, wouldn't it matter then if you kept the money with the bank or not?

It sounds like they'll just ask for it either way.

(Thanks for answering my questions).

 

[grossreal]

hi david
not the same
as I am reducing my leverage
my idea is to borrow money
not give it back to them
the more money back or less money lent the lower the leverage position.
I have just left a meeting today and I do 5 to one leveraging and they are 25 to 1 now thats leveraging.
they are asset backed and debt cover but still very high leverageing.
so I don't want to inject cash(as this is a premium) nor give them anymore equity then is a bare minimum.