Part Lo-Doc Part Full-Doc

[Cramer]

Hello,

First time on the Forum, what a resource for us Property Investors.

I have been asked by our financier that if we are going to refinance our two properties that are held in our PIT Trust then we must adhere to a Full Doc application on our PAYG Income and a Lo Doc application on the properties in the PIT.

We are trying to refinance out of MacQuarie whose rates keep going up.

Can anyone suggest whether this will restrict our borrowing or just a quirk of the financier? Why are they Requesting this?

 

[redwing]

Hello,

First time on the Forum, what a resource for us Property Investors.

I have been asked by our financier that if we are going to refinance our two properties that are held in our PIT Trust then we must adhere to a Full Doc application on our PAYG Income and a Lo Doc application on the properties in the PIT.

We are trying to refinance out of MacQuarie whose rates keep going up.

Can anyone suggest whether this will restrict our borrowing or just a quirk of the financier? Why are they Requesting this?

Aren't both properties in the PIT though, I would've thought you would either go Full-Doc or Low-Doc, the Full-Doc seems redundant here if they are asking you to go low-doc for both IP's anyhow; be interested to see the brokers replies

 

[Peter_Tersteeg]

The individuals (directors of the trustee company) will need to either be the borrowers or guarantee the loan in both cases so I don't see how the individuals can be spearated from the trust for application purposes.

You also can't expect a lender to accept a full doc application one day, then the same lender accept a lo doc application shortly afterwards. They've already accepted evidence of your income, they won't take your word for it if you tell them something else and refuse to verify it.

You can get away with a full doc with one lender then a lo do with another, and this can be warrented in situations where some income is verifiable and other income is not. You do need to be careful about mortgage insurance however, as this may be common to both lenders.

 

[redwing]

PS:
I hear you on the McBank rates.....ditto with RHG, both appear to want to divulge themselves of the burden of customers and lower their market exposure

 

[Rolf Latham]

Hiya

Id be very very wary ..............as Pete has suggested what can happen might not be nice.

Whats worse, if its not set up and done correctly you could be well and truly stuffed, because the mortgage insurers may not like you one little bit

ta
rolf

 

[Cramer]

Hi,

Thanks for your help but just to clarify this is a full doc application as far as PAYG income goes with a Low-Doc Declaration for the Property Investing business of the PIT. A rate of 9.7% has been quoted to us, is this any good?

Does this mean that the rent and cap gains of the PIT can be included as part of the low-doc declaration? I hope so because our PAYG income will not meet the servicing requirements of a full doc.

It's funny but that is how it seems in this now difficult environment of trying to refinance out of Mac to another financier that will do lo-doc with a PIT

 

[Rolf Latham]

9.7 is ok

some may do it a little cheaper .............but sounds to me like you need some flexibility in the income declaration etc.

We might be able to help you a littl further if you can tell us who the funder and mortgage insurers are pls

ta
rolf

 

[Cramer]

Hi,

Funder is St.George, I'm sure they quoted about 9.7% but will have to check on Monday, don't know who the mortgage insurer is.

Does this sound like enough flexibility in this declaration they are asking for in the lo-doc part of the properties in the PIT?

 

[Rolf Latham]

You may be ok

Does your PIT have ABN and 2 years GST registration ?

ta
rolf

 

[Cramer]

It does so I will give it a go, thanks for your wonderful help

 

[Qlds007]

Sounds a little rich for the Dragon i think you could certainly do better.

We do a fair $M each month with SGB and you should be able to push them on the rate. 9.82% is the Lodoc SVR and dependant on the loan amount you would still get the 0.7% discount.

 

[Cramer]

Hi,

We have enough trouble with them explaining the structure, let alone a discount of 0.7%. How can you get a discount on a lo-doc anyway?

They have had to be told that in a PIT I have to be the borrower and they have contacted our tax advisors. As Rolf has mentioned they are also asking for GST and ABN registration for 2 years, just found that out today.

Thanks for your help.

 

[Rolf Latham]

Hiya

I hate to say it, but its time to give the people doing your finance a bit of an earful.

The stuff thats coming across your path now should have been ironed previously.........

ta
rolf

 

[Peter_Tersteeg]

I agree with Rolf, they should have asked you the ABN and GST questions prior to recommending a lo doc loan. If you don't have these in place you won't qualify for most lo doc loans.

I don't think they're being as helpful or as informative as they should be. If they don't already know your ABN/GST position would seem to be giving advice without qualifying you to determine if it's relevant.