I need some advice please.

[haydos1979]

Hi All,

My current situation is a follows:

IP1 – Current Value approx $520K – Loan Balance - $340K (P&I) - Suncorp
IP2 – Current Value approx $280K – Loan Balance - $285K (Interest Only) – ING

I have stuffed up when purchasing IP2, the mistakes I have made are:

1- Fixing IP2 loan for 5 Years at 8.44% - I have 2 years 1 month left on this loan. Break fees are approx $13K.

2- Allowing ING to have a 2nd mortgage on IP1. (The borrower is to provide a letter of consent from Suncorp, the prior mortgagee, limiting their priority to principal of $410020.)

If possible I would like is some advice on how to fix my loan structure to allow me to access the equity in IP1.

Cheers

Brad

 

[marg4000]

If the value of the 2nd IP is $280K and you have a $285K loan on it, then you have already used up most of the equity in IP1 to support the loan on IP2.

Your mortgage broker may be able to squeeze out a little more, but it would probably not be worth the break fees.
Marg

 

[Rolf Latham]

Hi Brad

meh.........not easy this one

1. Got to suncorp get a lend to 400 k , with that do a partial break with ING to get the loan value to 80 % or 90 % lvr of the current value, and concurrently release the second mortgage

2. Sell IP 1 and do a partial break with ING

3. Take out a new loan with suncorp to 400 k and use that for the next deal

ta
rolf

 

[haydos1979]

Hi Rolf,

Thanks for the advice. I don't want to sell IP1.

So I need to find a way to move from away from ING and to keep the properties independent of each other.

At the moment I am thinking of refinancing IP2 with another lender that offers 95 - 97% LVR. This should then release the 2nd mortgage off IP1 and allow me to use the equity that I have in IP1.

or the other option I am considering is to take IP2 over to Suncorp and have both IP's with the same lender.

Cheers

Brad

 

[Peter_Tersteeg]

Realistically you won't find a lender who will refinance at more than 90% LVR. You'll either need to pay down the mortgage or wait until there's a bit more capital growth on IP 2. Getting lenders to approve 95% loans when it's a purchase is difficult. Refinancing at this LVR stopped quite some time ago.

Rolf's suggestion of accessing equity in IP 1 with a partial release of the loan in IP 2 is likely to be the best solution for the time being. It'll cost a little money, but it's probably making the best of a bad situation.