"No Valuation will be required." Does this mean...?

[joanmc]

If you simply must cross-coll, have you considered keeping your PPOR loan at 200k and your investment loan for the full amount including all costs?

By putting some of the costs in your PPOR loan you are making your accounting very difficult especially if you are paying off your PPOR loan.

Every payment will need to be pro-rata between investment and personal expenditure i.e. if you pay $100 into that loan 200/320 will be personal and 120/320 will be investment. each interest charge per month will have to be pro rata as well.

How has the bank guy convinced you this will be easier for accounting?

 

[Ed Barton]

I really appreciate everyone's advise but I would also like to remind everyone that there are things only I can see. like people here only see let's say 50% of the story so based on the facts i have provided, they would choose option A for example. However I see 100% of the picture and I think option B is the best option, and if other members saw 100% of the picture they might choose option B also...

So you only provide 50% of the story but expect members here to give you good information?

Alot of people here are like you should seek a "professional" expert this expert that but the fact is they charge alot for things that are not worth it.

Your posts over multiple threads tells me you are in desperate need of professional advice. You are very ignorant (as in, lacking knowledge, not dumb. The two are often confused) on many matters.

There are other benifits of cross col that i don't want to post here but i understand the negatives/cons of cross col (now that you have explained it) and i don't see them as being an issue. eg. let's say (i can't) but hypothetically I can pay off the loan in a year. can you see how this wouldn't be a big issue.

There are no benefits to cross col, so I'm not surprised you don't want to post them. I suspect the CBA salesman has told you that you can get a 1% discount if you cross. A broker (or even you, if you knew what you were doing) would be able to achieve the same discount off standard variable without crossing.

Thanks for everyone who explained Cross Col. And providing real examples, really appricaite it.

And you'll totally ignore it and take the advice of the CBA salesman.

IP happily never ever after...

 

[truong]

I have got a conveyancer, i'm paying them $700-$800, they will run other searches etc.

To add to the other posters, please be aware that among the 5 common types of professionals who can assist you on your investment journey (lawyer, accountant, mortgage broker, RE agent, conveyancer) the one that is the least likely to help you with useful advice is… a conveyancer.

Not questioning their competence but their area of expertise is just a tiny portion of an investor’s knowledge base.

I've also noticed you’re about to buy a 740K investment property. Have you run detailed numbers on it? This price level raises alarm bells wrt cashflow and profitability.

 

[fullylucky]

I've also noticed you’re about to buy a 740K investment property. Have you run detailed numbers on it? This price level raises alarm bells wrt cashflow and profitability.

Yes, I have done the numbers, multiple scenarios, and using conservative figures.

eg. one scenario interest rate goes up 2% etc.

all good. (acceptable risks)

i'm very proficient with excel. if anyone wants excel advice please ask me.

I can still change it to not cross col. i haven't signed any forms. it's not until signing is anything set in stone.

still ages until unconditional.

P&B late this week, can still fail it and change my mind.

 

[Shahin_Afarin]

Changing it from crossed to uncrossed will take more time than you think. The deal essentially needs to be re-structured, re-assessed and new mortgage documents will need to be issued. This is not something I would leave to the last minute.

Regards

Shahin

 

[Marty McDonald]

Yes, I have done the numbers, multiple scenarios, and using conservative figures.

eg. one scenario interest rate goes up 2% etc.

all good. (acceptable risks)

i'm very proficient with excel. if anyone wants excel advice please ask me.

I can still change it to not cross col. i haven't signed any forms. it's not until signing is anything set in stone.

still ages until unconditional.

P&B late this week, can still fail it and change my mind.

Mate seriously. Your are clearly great with money but crap at taking advice. Forget us brokers if you feel like you couldn't possibly believe that we could add value, at least look at some of the investors who have posted here and take note of their advice. Anyone who knows anything about this stuff does not cross collateralize.

 

[fullylucky]

Mate seriously. Your are clearly great with money but crap at taking advice. Forget us brokers if you feel like you couldn't possibly believe that we could add value, at least look at some of the investors who have posted here and take note of their advice. Anyone who knows anything about this stuff does not cross collateralize.

I've made an appointment with CBA mobile lender tomorrow. I'm gonna ask them to set it up like how others have suggested (with 3 loans). I’ll let you guys know how it goes.

They say in war it’s ok to make mistakes as long as you don’t make the same one as the person in front of you. Also the best way to learn lessons is from others since you don’t have to pay the cost they spent learning the lesson (time, energy, money). I’ve heard other members’ experience how cross coil has stuffed them up so I’ll try to set it up correctly on the get go.

As I said earlier, I have nothing against brokers. I respect their profession. I guess they bring borrows and lenders together. Just like how real estate agents bring sellers and buyers together. They do provide value added. Just like how banks bring savers and borrows together. If someone wants to borrow 1 Million dollars they are not going to door knock 1000 houses and borrow $200, from person A, $5000 from person B, $1000 from person C etc. banks provide many other services.

I’d prefer not to use a broker because of past experience, my logic with brokers is that say there are 3 different loan products, the broker will choose the one that gives them the most benefit (commission bonus or gifts I don’t know) and not necessary the best loan product for the borrower.

I think the loan market is already quite perfectly competitive market. i.e. lots of buyers and sellers, everyone selling a standardized good, perfect information, low barriers to entry and exit. There are tools like ratecity and other sites that lets you compare. Lots of lenders try to pull away from this competitive market by trying to make their loan product unique and stand out etc but its bs. Std var is best type of loan since any extra features would just be an extra cost for the lender to calculate etc so of course that cost has to come from somewhere.

Anyways the first time I tried to get a broker for my first home the bugger tried to sell me a loan product that had an extra 1% more than everyone else.

Anyways I’m capable of finding a loan product myself.
In other countries, doctors prescribe not the best medicine but the drug that gives them the most commission even if it’s useless (luckily it’s not like that in Australia).

 

[Aaron_C]

Seeing as most loan products pay roughly the same commission I think your assessment of how brokers operate is completely and utterly inaccurate. While I do respect your decision not to use brokers, get your facts right first and not slander all of us as unscrupulous loan sharks due an unfortunate incident from someone who has probably long-left the industry.

 

[fullylucky]

Seeing as most loan products pay roughly the same commission I think your assessment of how brokers operate is completely and utterly inaccurate. While I do respect your decision not to use brokers, get your facts right first and not slander all of us as unscrupulous loan sharks due an unfortunate incident from someone who has probably long-left the industry.

please dont judge all brokers based on the actions of one broker. i never said he was a loan shark.

just saying their service is not for me. i do everything myself if i can.

 

[Rolf Latham]

once the loans have settled

go to

www.ubank.com.au

and refinance asap.


you will save a motza

ta
rolf

 

[fullylucky]

once the loans have settled

go to

www.ubank.com.au

and refinance asap.


you will save a motza

ta
rolf

yeah i like the logic of small lenders pretty much use large banks to do all the safety checks. i guess their logic is if it's good enough for the big bank it's good enough for us.

save heaps on analyzing the risk and pass the savings on to us borrowers.

 

[Rolf Latham]

yeah i like the logic of small lenders pretty much use large banks to do all the safety checks. i guess their logic is if it's good enough for the big bank it's good enough for us.

save heaps on analyzing the risk and pass the savings on to us borrowers.

looks like the perfect fit for someone that knows what they are doing and is on the home run to retirement

ta

rolf

 

[joanmc]

"you don't know what you don't know"
These words changed my whole perspective on investing. If I had known at the start what I know now, we would have so many more properties AND not be tied in knots by our lender. If we had got it right at the start it would have been much better.
Imagine Fred wanted to build a 6 storey block of units.
The engineer says Fred needs certain foundations or else down the track the building will fall over not right away mind, but down the track it will definitely cause problems.
But Fred has done his own research, He is pretty smart and he decides he doesn't want the extra hassle/expense of foundations (and the engineer is only recommending what will make him more money in fees anyway).
What would be your advice to Fred? Is it worth the effort to get the basics right?

 

[fullylucky]

I printed out everything and the two examples on this thread and showed it to the CBA mobile banker, they read it and said those situations wouldn't happen. and since i'm not doing a very high LVR i wouldn't be in those situations. even if house prices drops i would still be above 80% LVR for each property.

they gave an example where house prices dropped by 50k and the LVR was fine after selling.

And they said property prices are going up and they know the area well.

They said singling all securities are only for those investors who invest in high LVR like 85 or 95% and want loans with different lenders and don't want each lender to know all your business.

Got final approval just have to wait for the forms to sign.

I now envisage a new problem of how to pay for the interest only investment loan. I will start a new thread in the Property Finance section of this site to discuss.

 

[Aaron_C]

I printed out everything and the two examples on this thread and showed it to the CBA mobile banker, they read it and said those situations wouldn't happen. and since i'm not doing a very high LVR i wouldn't be in those situations. even if house prices drops i would still be above 80% LVR for each property.

lol. Cognitive dissonance at work.

 

[DaveM]

And they said property prices are going up and they know the area well.

The banker giving you a surety that prices are going up? Dangerous.

They said singling all securities are only for those investors who invest in high LVR like 85 or 95% and want loans with different lenders and don't want each lender to know all your business.

Scary that they believe thats why you do loans as standalone. Shows their lack of knowledge in portfolio structure. And they are just lazy.

I now envisage a new problem of how to pay for the interest only investment loan. I will start a new thread in the Property Finance section of this site to discuss.

Umm... rent?

 

[joanmc]

Ask your mobile banker how many investment properties they have. If the number is less than, say 4, why are you taking advice from someone who hasn't yet done what you want to do? or do you only ever want 1 investment property? If that is all you want, knock yourself out with CBA. If you want to have a portfolio of properties then get advice from someone who has however many you want.
There are plenty of folks on here with way more than 1 investment property, some have even posted in this thread

 

[wylie]

I printed out everything and the two examples on this thread and showed it to the CBA mobile banker, they read it and said those situations wouldn't happen.

Unbelievable. I'd have loved to be there to see the banker reading the thread .

And they said property prices are going up and they know the area well.

That's what the bank thought when a house we now look after was valued at $1.1M. We cannot sell it for $900 now .

I now envisage a new problem of how to pay for the interest only investment loan. I will start a new thread in the Property Finance section of this site to discuss.

I really do hope that last sentence was a joke .

If nothing else, your "I know better" and "my banker said..." answers to all the sincerely given advice here makes for interesting and entertaining reading. Seriously, why even bother asking anything.

 

[Jake D]

 

[Shahin_Afarin]

Jake - congratulations you are the winner of the post of the year.

Regards

Shahin