Loan top up -second mortgage?

Just wondering whether it's standard for a bank to ask for a second mortgage when you do a top up to extract equity.

I would have thought that they could just amending the first mortgage to refer to the top up loan as well? As otherwise there could potentially be a fairly large number of mortgages with numerous registration and discharge fees applicable when refinancing to another bank or repayment.
 
Just wondering whether it's standard for a bank to ask for a second mortgage when you do a top up to extract equity.

I would have thought that they could just amending the first mortgage to refer to the top up loan as well? As otherwise there could potentially be a fairly large number of mortgages with numerous registration and discharge fees applicable when refinancing to another bank or repayment.

Yes, if it is the same lender they would already have a mortgage registered.

Perhaps a mortgage manager with the lender being different?
 
Yes, if it is the same lender they would already have a mortgage registered.

Perhaps a mortgage manager with the lender being different?

Same lender Terry, AMP. I thought it was strange because of this and was wondering whether it was standard practice.
 
Frankly I've been very frustrated with AMP lately. Their processes and service are somewhat in the dark ages. They can do an increase of your existing loan, but it doesn't surprise me to hear they want a second loan account when a single larger loan might do the job.

Add in their screwy offset account, potentially high fees for a top up and restructure then the incredibly painful process, it can often be easier just to take the whole deal elsewhere.

When accessing equity, the path of least resistance is usually to stay with the existing lender. AMP may be an exception to this general rule however.
 
No issue with the second loan account, I would probably prefer it as it keeps the funds separate. I just didn't think the second mortgage was required, you could very easily just amend the existing mortgage to be security for the second loan as well.
 
I think there's a misinterpretation of how the word 'mortgage' applies here.

If AMP is the only lender who is lending against the property, there's not going to be a second mortgage. They hold the first mortgage, they shouldn't have to register their priority over it a second time.

Then again, it is AMP. It wouldn't entirely surprise me if they did try register a second mortgage over the title. :rolleyes:
 
I think there's a misinterpretation of how the word 'mortgage' applies here.

If AMP is the only lender who is lending against the property, there's not going to be a second mortgage. They hold the first mortgage, they shouldn't have to register their priority over it a second time.

Then again, it is AMP. It wouldn't entirely surprise me if they did try register a second mortgage over the title. :rolleyes:

Im sensing some tension from using AMP recently. :D

starter, you're saying that they are creating a separate split from existing loan, correct? ie, 150k + 50k loan, instead of increasing a 150k loan to 200k?

They can facilitate either setup, be sure to get what you prefer. Just because the lenders don't like to follow through with instructions, doesn't mean we should let them get away with it!
 
It's a separate split and a second mortgage. No issue with the split, it's the second mortgage that I found strange. Like you Pete I didn't see a point to it.
 
Yep an additional registration fee, to be fair if thy amended the existing mortgage to include the second loan there would be an additional fee as well, although maybe less? I was concerned that if we refinance away or repay the loan in future there would be many discharge fees applicable. Shahin has assured me that this wouldn't be the case, just AMP being AMP.
 
Yep an additional registration fee, to be fair if thy amended the existing mortgage to include the second loan there would be an additional fee as well, although maybe less? I was concerned that if we refinance away or repay the loan in future there would be many discharge fees applicable. Shahin has assured me that this wouldn't be the case, just AMP being AMP.

This is really odd and worth pursuing? I have not ever seen a 1st mortgagee ask for this?
 
I agree Marty, but I think I have seen AMP do this before. It's definitely not common place though.

I also suspect Terry is correct and there's going to be an additional discharge fee when the loan is closed.
 
I'll ask Shahin to confirm with AMP re the discharge fee. If we keep the loan with them we will probably to top ups a few more times and I don't want to be slugged with a discharge fee each time when we go and repay the loan.

What a nightmare this whole process has been, can't believe it'll be about 8 months to get the top ups done. No fault of Shahin who has been great stepping in, not happy with the previous broker who has conveniently gone awol from somersoft now.
 
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