Is a Fixed Interest LOC available?

[RightValue]

Hi All,

I am wanting to tidy up my banking affairs and consolidate loans. I would like a line of credit facility but would also like a fixed interest rate. In my browsing of the net I can't seem to find this facility.

Does anyone know if any main bank offers this or is it possible do do with a lender on a split loan basis, ie the advanced amount at a fixed rate and any increased amount at a variable rate?

cheers,
RightValue

 

[Rolf Latham]

Hi RV

Almost all lenders will do a cocktail of fixed on the drawn portion and then a separate LOC.

The trick with having a fixed loan on something that isnt drawn is that the lender cant buy the forward funds.

There are some lenders that will allow offsets on fixed, and allow partial repayment and redraw, BUT in almost all cases these things dont act like a LOC, in that a full payment of interest on the limit is due, and interest savings come off the principal.

ta

rolf

 

[RightValue]

Hi RV

Almost all lenders will do a cocktail of fixed on the drawn portion and then a separate LOC.


rolf

Thanks Rolf, sounds like the way to go without dicking about. This arrangement will work fine for me.

Now what are the advantages in using a broker as opposed to going to my bank (CBA) or another lender myself?

Bear in mind that these days I catch a flight travelling looking at properties every third day and am very busy.

cheers,
RightValue

 

[Rolf Latham]

Hi RV

CBA can do that for you without much issue, as can most other lenders.

On the question of can you do it yourself or get a broker to do it ?

Ever wondered why most lenders wont let the borrower commission the val

Id suggest that if you are a busy investor, that you find yourself a busy independent broker. Sounds to me like you will soon outgrow a single lender like the CBA. Should that happen then your existing portfolio is structured to suit that one lender.

NO disrespect to any one lender or personal banker, but the VISION of that lender can NEVER exceed what that lender has to offer. Why would they ever structure you so that you can move beyond them. This, in itself is one of the most limiting factors that many investors will willingly face up and lose on, simply because they dont have the all the information to hand.

Any investor that wants to keep growing must look at solutions outside of the one lender box and ally themselves with someone that looks for a win win win (for the borrower, the lender and the broker).

You are located in Melbourne, there are at least 4 brokers that post here that can look after you MUCH better than any one lender ever can.

ta

rolf

 

[RightValue]

Hi RV



Id suggest that if you are a busy investor, that you find yourself a busy independent broker. Sounds to me like you will soon outgrow a single lender like the CBA. Should that happen then your existing portfolio is structured to suit that one lender.



You are located in Melbourne, there are at least 4 brokers that post here that can look after you MUCH better than any one lender ever can.

ta

rolf

Thanks for that Rolf.

No I am not a busy investor at all. I sold some of my properties last year as I do not think that there will be any growth in the market for another 4-5 years.

In fact I switched out of valuing at the same time and now look at commercial properties for other people (generally $5m-$150m), which requires me to fly all over the place (currently in NZ, tomorrow Perth, Tue Sydney, Wed back in Mebourne before I fly to South East Asia to write my reports on the beach in peace and quiet for a couple of weeks).

I am not looking to add any more resi properties for a few years however I am about to develop one land bank property into a motel, but I will have to cut back on the work to do it.

If any of the Melbourne Brokers want the work, just PM me.

cheers,
RightValue

 

[quintets]

confused

... Sounds to me like you will soon outgrow a single lender like the CBA. Should that happen then your existing portfolio is structured to suit that one lender.

NO disrespect to any one lender or personal banker, but the VISION of that lender can NEVER exceed what that lender has to offer. Why would they ever structure you so that you can move beyond them. This, in itself is one of the most limiting factors that many investors will willingly face up and lose on, simply because they dont have the all the information to hand.

Any investor that wants to keep growing must look at solutions outside of the one lender box and ally themselves with someone that looks for a win win win (for the borrower, the lender and the broker).

I know this is an old thread, but I'm wondering Rolf, if you could explain this bit more about VISION for my finance newbie brain. Are you saying that a lender will structure your loans so that they will be best served by his products more and more in the future? If that structure doesn't suit me, then I should not try to fit a square peg in a round hole? Is this the "all the information at hand" you're talking about?

Thanks,

Jireh

 

[Rolf Latham]

Hiya

I think you are drawing some of my attitudes in from previous posts as well

Ultimately, what do you want ?

Id suggest that you sit with your Private Banker should you have one and say, pls put an envelope around what I can do with you, with my current resources. If you have a faor bot of equity on hand you will fnd that when you do the excercise with a good independent broker they can often produce twice as much gearing and lots more flexiblity becauses of mix and match.

The private banker only sees his/her product, and his/her credit rules - why would you ever want to borrow more or in a different way that we allow it is their paradigm

Thats neither good nor bad per se. Its just the way it is.

Where it becomes bad is where YOU havent asked where that envelope is, and then be surprised when they say NO more, and often you are so tied up with fxed rates, xcoll and bank guarantees that it takes months and many dollars to fix.

I have seen clients QUIT investing for years because it wasa just too hard to unravel all the mess.

The core issue at the end of the day is that you dont realise its a problem, until it is so.

Ta

rolf










Truly thats what a good broker should be able to do in most circumstances.

 

[quintets]

Hiya

Id suggest that you sit with your Private Banker should you have one and say, pls put an envelope around what I can do with you, with my current resources.

Thanks Rolf! Now that's the kind of perspective/advice that makes sense.

At the risk of oversimplification, the banker needs to get a feel of what kind of investor is sitting with him/her. You need to bring a good picture of what assets you have and a strong picture of what you would want to do in the short/medium term. They'll give you product options (or envelope) and it's back and forth like within that banker's paradigm until you either come to a combination of their products/pricing that works for you, with whatever flexibility you need, or you just say no thanks. They can only sell what they have on offer, or what their supervisor says they can sell you.

A good broker, I think, might start with a bank in mind, and then after listening decide another bank's products are the best...or not. Theoretically, after bouncing your needs and ideas around, the best bank and combination of products comes to light. After you've chosen the bank and the product(s), you start hammering for the best deal there and a good broker should also help that as well.

I think that's about it.

Jireh