NAB, fixed IR and increase loan ?

E

ericproperty

Hi guys

would you pls advise?

2 IPs, mortgaged with NAB,

* IP1 valued at $1.5m, loan $641k, however the loan is on fixed rate till Nov 2015.

* IP2 valued at $500k, loan $300k, variable rate.

now I would like to take some equity (cash) out for further purchase (with other bank).

question:

I would like to use the combined value of the 2 IPs to take out as much equity as possible, however IP1 is on fixed rate, will NAB only consider IP2 to release equity, or will NAB consider both IP 1 and IP2 to release equity?

very appreciated
 
No problem IP2.

If you want equity from IP1 and refinance, you will be able to as well, but up for the break fees.

What do your mortgage docs say?


pinkboy
 
What lvr's you looking to go to? You could take the 300k one up to 400k to provide you with 100k to play with (80lvr)
Then, create a second account on ip1 for 559k. As a separate account it won't interrupt your fixed rate. This new one could be fixed or var at your choosing. This is also 80 lvr
 
Don't touch the $641k loan, but you can get a secondary or top up loan for $559k, taking the loans to 80% of IP1.

Do the same for IP2, do a top up loan for $100k.
 
If your serviceability is ok, and it's set up correctly with nab they will lend to 80 on cash out without too much of an issue

Ta
Rolf
 
I think your question revolves around the fixed loan and releasing equity from that property.

Not a big deal. You can release equity from a property with a fixed loan by setting up a second loan along side it for the equity release. No need to break the fixed loan and you still get access to your equity.

Even if your loan wasn't fixed you'd still do this to separate the original home (non deductible) loan from the equity loan which is presumably for investment purposes (and this is tax deductible). Always keep the two purposes as separate money.
 
No break free will apply if you set it up appropriately (as a separate loan as Peter mentioned).

I'd be careful not to cross your loans - its often the default setting applied and you could run into problems later - esp if your in LMI category.
 
You can release equity against a property with a fixed loan.

You just need to meet that banks criteria.

NAB will try very hard to get you to take out the new purchase with them.

Cheers

Jamie
 
thanks Pinkboy, D.T, Rolf, Peter, Redom and Jamie.

you are right Rolf, NAB is stubbon with serviceability.


"Even if your loan wasn't fixed you'd still do this to separate the original home (non deductible) loan from the equity loan which is presumably for investment purposes (and this is tax deductible). Always keep the two purposes as separate money."

Hi Peter, both loans (IP1 & IP2) are for investment purpose, they both tax deductible. the equity is for investment as well, do I still need to separate them?
 
ericproperty said:
Hi Peter, both loans (IP1 & IP2) are for investment purpose, they both tax deductible. the equity is for investment as well, do I still need to separate them?
Click to expand...

Sorry, my assumption was that property 1 was your PPOR. It doesn't really matter though, the solution is the same when there's a fixed loan in place.

I do question your statement that NAB is tight on servicing though. In my experience they're consistently one of the most generous lenders available. I can even explain why in terms of their lending policies and the math used in their servicing calculators.
 
ericproperty said:
thanks Pinkboy, D.T, Rolf, Peter, Redom and Jamie.

you are right Rolf, NAB is stubbon with serviceability.


"Even if your loan wasn't fixed you'd still do this to separate the original home (non deductible) loan from the equity loan which is presumably for investment purposes (and this is tax deductible). Always keep the two purposes as separate money."

Hi Peter, both loans (IP1 & IP2) are for investment purpose, they both tax deductible. the equity is for investment as well, do I still need to separate them?
Click to expand...

Hiya

If you are having lender service issues with nab then you'd b well served to speak with a broker yesterday to look at potential alternatives, and to maximise your chances of keeping to build your portfolio

Ta

Rolf
 
"I do question your statement that NAB is tight on servicing though. In my experience they're consistently one of the most generous lenders available. I can even explain why in terms of their lending policies and the math used in their servicing calculators."

Hi Peter, I go the impression from my broker, who I have used for all my loans. I remembered he advised me about 2 yrs ago re issues with serviceability with NAB. then I moved to ME bank.
 
ericproperty said:
Hi Peter, I go the impression from my broker, who I have used for all my loans. I remembered he advised me about 2 yrs ago re issues with serviceability with NAB. then I moved to ME bank.
Click to expand...


and now 2 years later you are back with NAB with your portfolio ? Sounds confusing to me, but im sure there are good reasons.

When you next move, if at all possible, dont churn the whole lot, try and move some of your lending down the serviceability scale and see if you can get it done with a lender like say WBC who is a middle range serviceability lender

ta
rolf
 
"and now 2 years later you are back with NAB with your portfolio ? Sounds confusing to me, but im sure there are good reasons.

When you next move, if at all possible, dont churn the whole lot, try and move some of your lending down the serviceability scale and see if you can get it done with a lender like say WBC who is a middle range serviceability lender"

Hi Ralf

sorry to confuse you. ATM I have 2 loans with NAB (as mentioned above). 2 yrs ago, when I was trying to borrow more, NAB questioned my serviceability, so I went to ME for the subsequent purchases. Now I want to increase the loan with NAB (taking out some equity) to buy again. My plan is to use the equity (cash) as the 20% deposit, the new loan will be with other bank (not NAB or ME).
 
ericproperty said:
"I do question your statement that NAB is tight on servicing though. In my experience they're consistently one of the most generous lenders available. I can even explain why in terms of their lending policies and the math used in their servicing calculators."

Hi Peter, I go the impression from my broker, who I have used for all my loans. I remembered he advised me about 2 yrs ago re issues with serviceability with NAB. then I moved to ME bank.
Click to expand...

NAB and ME are usually two of the most generous lenders for servicing purposes in investment properties. I'm very confident in this statement. It could be that something in your circumstances doesn't match up with their policies which is effecting this.

There are one or two lenders which are often better again, but not many. It may be possible where your existing serviceability is getting to the point where it's maxed out. There may also be some things that can be done about it. Approach your broker with this in mind.
 
ericproperty said:
Hi Ralf

sorry to confuse you. ATM I have 2 loans with NAB (as mentioned above). 2 yrs ago, when I was trying to borrow more, NAB questioned my serviceability, so I went to ME for the subsequent purchases. Now I want to increase the loan with NAB (taking out some equity) to buy again. My plan is to use the equity (cash) as the 20% deposit, the new loan will be with other bank (not NAB or ME).
Click to expand...

if NAB had an issue then, they possibly wont like it now.

Sounds like your broker knows what they are doing, but just not taking you along the knowledge path to the level that you desire.

I find some clients really want to know in depth, and some "just want the loan". As an educator, its important to work out which side your client is on

ta

rolf
 
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