redraw facility



From: Sarah Verrone

Hello all,
Peter Spann,in his tapes called"Property
Magic"talks about using a redraw facility
to access a deposit for purchasing further investment properties.
He said that using this redraw facility has been vital to his success.As I understand this is not a line of credit.
I asked my bank about their particular redraw facility.The guy said,when you are ahead in your mortgage repayments you can redraw some of it,providing your
ahead $3,000.
This doesn't sound like the same thing Peter Spann is talking about.
Any Spann graduates that could explain to me
what type of facility he is referring to and
where I might obtain one?
Thanks Sarah
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Reply: 1
From: Sim' Hampel

No, I think your bank person is correct.

A typical redraw facility works exactly as you described... you can "redraw" any extra repayments that you have made into the loan.

Of course, if you can convince your bank to revalue your property at a higher value and then increase the borrowing limit of your loan (thereby giving you access to the increased equity), you could "redraw" this extra amount which you have not had to put your own money into first.

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Reply: 2
From: Rolf Latham

Hi Sarah

A standard Term Loan (one that runs for a particular term) usually has a redraw that only allows you to redraw extra repayments. The "limit" of the loan decreases so that at the end of the term the limit is zero.

A true revolving Line of Credit works the other way, you can pull cash all the way to the limit at any time.

What is confusing is the smoke and mirrors marketing approach used by some lenders. There are a number of hybrid products on the market and some lenders claim that you can use their term loans "like a line of credit".


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Reply: 2.1
From: Kylie S

Hi Sarah,

I have attended the Peter Spann course - and my interpretation of what he teaches is:
you get the property revalued - and borrow against the additional equity in the property.

I don't know the technical terms - however I think this is the concept.

The term I thought he used was "Draw Down" not redraw??

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Reply: 2.1.1
From: Nigel W

Hi Kylie

How did you find Spann's course/s? Did you find any amazing insights? Was it worth the $? Have you been able to implement his strategies successfully?

I'm thinking about doing his courses but I'd like to get my hands on his material first to have a look.


Please feel free to email me at [email protected] if you'd prefer to comment off-line.
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Reply: 2.1.2
From: Sarah Verrone

G'day Kylie,
I will have a listen to the Cds again re draw down.
My notes say a"redraw facility is critical to
create wealth".

We get the property revalued and borrow against the additional equity.
Do you know how and where Peter suggests we borrow these funds?I don't mean what bank.I mean in what form.Same bank or different one?

If we purchased the property with an interest
only/fixed loan as suggested,obviously
this loan can't be increased.
Peter mentions that we can borrow more from the bank for a reno?This would have to happen
when applying to purchase the property in the first place....yes?

INMO,I really enjoyed Peter's CD's.I think the details of obtaining finance was not sufficiently explained.Mind you,I could be a bit slow with this finance stuff.At the same time it's sooo important in fact no finance no investments.I prefer things to be explained to me as if I'm a three yr old.
Cheers Sarah
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