Looking to buy 2nd home, 1st home loan locked. Help.

Hi Guys,

My family and I are looking to buy another home, as current home is way to small now.

I already have one house with a loan that is locked in until dec 2012 with Commonwealth Bank.
Pay out fee is $7500.

Equity is about $50,000 in 1st home.

I rang the comm bank and they said they can give us a LOC account but will only give us 80%LVR of home 1. That is only $10,000.

Home number 2 is looking to be about $380k to $400k purchase price.

They will lend me 90% (or 95%) if I use home 2 as a security (xcol). Which means I only need to come up with $6k they said + stamp duty.

I have no current real savings, but can come up with about $10k cash. So looking to use as much equity as I can.

What is the most financially efficient way here.

I plan to put both these house's on interest only loans and rent them out in the future.

I hope I am making sense with all of this, I have contacted a mort. broker in the past and they were no help.

My question is, how bad is it to cross collateralise these two homes if I plan to use them both as investments in the next 5 years.

Cheers
Daniel
 
Hi Daniel

Its obvious from what you are saying that the bank is not acting in your best interest.

There is Usually no godd reason why you cant get 90 % on stand alone deals with Comm, the cross is for them to purely stitch u up further.

By having the loans crossed the LMI premium is likely to be biggers as well

Give them an earful and ask them present a workable stand alone structure, or simply get an independent broker to structure it with Comm for you .

IO is ok for both

Cant wait for the new NCCP legislation which may prevent some of this behaviour by lenders
ta
rolf
 
And Daniel, I can highly recommend Rolf if you're looking for a different broker. He is very experienced and knows his stuff 100%
 
Thanks Rolf for the info. I never like dealing with the bank for that reason Rolf, they're never really on your side.

Jacque - Thanks for the ref.

Rolf, I shall be in contact.

Regards,

Daniel
 
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