One loan for all IPs

[cgw]

I have 4 IPs, and 4 LOC loans. I have another loan LOC that holds the 20% deposits for the 4 IPs.
If I put all of the 4 IPs into one LOC, what happens when I sell one of them. How does the bank work out what is left in the loan? and the other 20% that is in the other LOC.
Or should I just put the whole lot into one Investment loan for the lot?

 

[jaycee]

What is the perceived benefit of combining the loans compared to leaving them as is ?

 

[Rolf Latham]

ummmmmmmmm

unless u want to become a banker dont place all your securities on the one loan.

Like giving dracula the keys to the Blood Bank....all looks fine until

Seriously though, what will the lender do ?? ........whatever they bloody well want.


ta
rolf

 

[Albertus 6]

Have to agree with Rolf, handing all your loans to one lender really puts you at their mercy. If there all lumped in together the lender may decide to revalue everything and the lend 80% against what is left.

Normally we would suggest the 1 line of credit with 1 lender and all the others with a different lender. That way if you sell you can pay down the line of credit or not , entirley up to you.

Alternativley if there is enough equity have each loan as a stand alone LOC - if you sell the lender pays out the loan but the rest of the portfolio is un touched.

 

[Perp]

What you're proposing is what I call "portfolio lending" in the following blog entry. This entry may help clarify for you why this would be a very bad idea. The advantages are all for the lender; I can't think of any benefit for the borrower.

 

[devo76]

It can look messy some times and it sounds like a good idea to clean everything up but as they say it is a bad idea.
I have 1 PPOR loan,1LOC,and 3 Investment loans. Im about to add another LOC and 2 Loans.Looks very messy on one page but its all in my head. Its structured correctly and rolls along by itself.

 

[josko]

I have 4 IPs, and 4 LOC loans. I have another loan LOC that holds the 20% deposits for the 4 IPs.
If I put all of the 4 IPs into one LOC, what happens when I sell one of them. How does the bank work out what is left in the loan? and the other 20% that is in the other LOC.
Or should I just put the whole lot into one Investment loan for the lot?

To answer your question:

The bank will make sure it has enough equity to cover LVR and give you the change.

If the property you sell has had all of the growth and the other properties lost value, you could find you receive nothing!

All I can see is a magnificant headache for you and your accountant with this scenario. Meanwhile the bank is smiling.....

Regards JO

 

[--(< PJ >)--]

Hi cgw, Just a quick 'thank you' for posting this question. I haven't looked at this before. The discussion is handy. PJ