Settling my 2nd IP in May : Need opinion on Loan structure

Hi,

I wanted some opinions in relation to my loans.

Currently i had 1 PPOR with NAB

1 IP with ANZ

and i bought my 2nd IP in Chelsea Melbourne. really excited....

So i went back to ANZ and they advised if i bring over PPOR, my LVR would be 79.69% Phew!!! Avoid LMI and also 0.90 off variable



If i stick with NAB and take everything to them, my LVR would be 86%. Have to pay $11000 LMI.

So what i have done so far is said yes to ANZ to set up all 3 properties together. ( Paid $1500 discharge fee to NAB)
PPOR - under joint names
IP1 - just under my name
Ip2 - under joint names ( me & my wife)

I wanted to know in terms of offset, transaction accounts, how do i set that up. ANZ says i can have 1 offset account. How do i work around interest rates, salaries, rental income, property expenses... just want to make sure i do not contaminate stuff which will cause a lot of headache at the end of financial year

your help would be great
 
Hiya

I smell that the loans may all be crossed.

Whil thats not a problem in the context of tax and accountig etc ,it may cause issues in the future.

Without the actual numbers on vals, loan amounts and their purpose, and what equity belongs to what its hard to provide any specific help.

Often u cant rely on the people setting up the loans, sometimes they are set for the banks benefit, not yours

ta
rolf
 
Hiya


Often u cant rely on the people setting up the loans, sometimes they are set for the banks benefit, not yours

ta
rolf

This might sound like a plug for brokers, and I guess it is, just being upfront!

Bank Staff, (was one with WBC) work for banks, yes stating the obvious, Brokers work for the client.

A lot of bank staff will (not always) set the deal up to be the best for themselves, wrap them all up, which makes it harder for the client to leave.

Ok, will get off the soap box now
 
Hi
i started with the ANZ they did not want to do what i wanted so i left
I set up 12 months ago
4 lines of credit at a cost of 5k to discharge my anz mortage

1 for 133k
2 for 110k
3 for 80k
4 100k

each line of credit is secured by my family home
each line will finance a IP.
with all money spent on the IP coming out of the line of credit
and intrest rent everything so money is easy to track and i can get finance any way i want using the line of credit as a deposit
bought 1st IP june 09
2nd 22/dec 09
3rd last week
I find having diffrent accounts to service each loans it makes it easy
I hope this helps Re Rocks
 
ANZ have no issues with having properties uncrossed and all it takes is for the client/broker to state they want them uncrossed. this will have no bearing on the interest rate discount.
Like many packages out their, the Breakfree package has a limit to the amount of loans that can be held under it (5). depending on the amount of loan splits you want it may be restrictive. In saying this there's nothing stopping you taking out a further package or taking the excess lending elsewhere.


Regards
Steve
 
So i went back to ANZ and they advised if i bring over PPOR, my LVR would be 79.69% Phew!!! Avoid LMI and also 0.90 off variable

It would also be 79.69 if you topped up your nab loan and walked the borrowed deposit over to ANZ.

In fact with ANZ recent changes, why not just get a 95% stand alone for the new purchase, and get the 5% plus costs either as a top up on PPOR from nab, or your existing IP with ANZ?
That way you will have a cash buffer you can use to start debt recycling your PPOR mortgage with, or use for the next purchase.
 
If you're already bringing your existing PPOR property across to ANZ, it's no extra work at all to do it in a tax effective structure that is not cross-collateralised.

The only argument to cross-collateralise in this case would be because it gives the bank more control over your portfolio. Not good.

Any broker worth half a pinch of salt will be able to answer your questions about the offset accounts, rates, etc, in a manner specific to your circumstances and structure.
 
Thanks for your responses . Just after all the possible scenarios i was left with no choice but to go with ANZ to avoid $12000 in LMI

My situation before: ( Numbers are illustrative but LVR's are accuarte)

I had a PPOR loan of $81.8K with NAB valuation of $100K LVR 81.8%
Another $75.9 with ANZ for my IP1 with NAB valuation of $100K ( I got Nab to value it to see if i can refinance) LVR 75.9%

wENT TO nAB & anz FOR ip2

IP2 NEED $105k ON A $100k VALUATION lvr 105% ( NO DEPOSIT REQUIRED)

Finally it came down to valuations where ANZ Valuation for PPOR was LVR 67% as oppose to NAB's 81%

IP1 valuation of ANZ was 71%

So ANZ said we'll give you 105% to settle on ur IP2 and u do not need any funds from you pocket and ur overall portfolio wud be LVR 79.7% ( approx). They also said later down the line when i have equitym they can restructure everything under equity Manager (LOC product

So what i am getting as part of breakfree packagae is 0.92 discount off std variable.

PPOR Loan account linked to offset account

Separate Salary Account for me and my wife

and 2 investment accounts

$375 fee p.a
--------------------

Please suggest options if i need to open Rental Income a/c or Rental expenses account ( just like a transaction account) or ??????

Or what could be my future options when i start to look out for IP3 say next year

at this stage LOC was not an option for me but moving forward for say Ip3 or Ip4 i would like to go with another bank.

any suggestions on account set up structures would be a good learning experience.

ta
 
Mortg Brokers & Finanice experts: Need Opinion

Hi There,

About to settle my 2nd IP at this end of this month.

Going to see the mortgage Manager and sign the papers. The set up they have for me is

PPOR Loan = $356K PPOR valuation = $530K
Ip1 Loan =$414K IP 1 valuation = $578K

IP2 that we are settling is $438K.Loan sought for is $461 ( $438K + $22KSD)

He mentioned that if i add all 3 together, my LVR = 79.5 % ( just under 80% and hence no LMI)

Do i have any other way of setting this up. AM i X-Coll...
 
Hi RER

looks like xcoll...............

yes u can usually set it up so that the new IP and other loans are only secured to the actual property. BUT depends on lender, and the level of previous "tie up"

Obviously not in the lenders interest to do things that work for you, mainly work for them.

best to have a chat to someone not allied to the lender.....though if you settlement isnt 2 plus weeks away, you are stuck with it.

ta
rolf
 
Hi RER

looks like xcoll...............

yes u can usually set it up so that the new IP and other loans are only secured to the actual property. BUT depends on lender, and the level of previous "tie up"

ta
rolf



Hi ROlf,

I was told that i stand no chance of doing any other arrangement if i was to avoid paying $10K LMI.

If you add the nos it'll tell you my LVR.

Wont my IP 2 be secured by IP1 & PPOR but IP1 & PPOR still be independent.

I am happy to answer any other questions if you feel that i have any other ways of financing my loans
 
Hi ROlf,

I was told that i stand no chance of doing any other arrangement if i was to avoid paying $10K LMI.

That makes sense if one hasnt been trained any other way..........thats just how many banks and many brokers work.



PPOR val = 535, 80 % lend = 424 - 356 exist = 68 new loan and new money secured only to PPOR

IP 1 Val 578 k, 80 % lend = 462.4 - 414 exis = 48.4 new loan and new money secured only to IP1


Combined = 116 .4


IP 2 val = 438 k 80 % lend =350.5 secured only to IP2

need 20 % dep = 87.6 + 22 k costs = 108.6, sec

from 116.4 leaves = 108.6 = 7800 left over for a drink for your new broker or banker.

Thats a simplistic but functional model. Any half decent broker will put this together without LMI. In addition,a little LMI in the right place would see up be able to do some debt recycle, which would oay back that LMI 10 x in a few short years.

The proposal thats been put to you by your lender isnt much on your favour and hasnt actually been thought through by them..............thats not their role.

In fact the proposal places you at a distinct commercial disadvantage.

ta
rolf
 
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