Uncrossing NAB Loans

[hugh72]

Hi All
I was wondering if there was a plan of attack in approaching NAB to uncross multiple loans, I know this is their favoured method of operation. My most recent loans are with a broker from this forum and were set up correctly but I would like to fix the mess I created first before I knew better and then see my broker to expand further. The loans are across 5 properties LVR 35-40% p&i and io
Thanks
Hugh

 

[Corey Batt]

At such low LVR's uncrossing won't be an issue if the servicing is evident. Simultaneous applications can be put in place to restructure the entire NAB x-coll'd section of your portfolio, whilst adjusting any other maintenance issues you may have (if you want an IO period, product switch, equity access etc).

 

[hugh72]

Thanks Corey sounds straight forward, do NAB still require a new application/assessment if a 5 year IO is about to lapse in a couple of months?

 

[Corey Batt]

They are still quite pedantic in waiting assessments for IO extensions - so best to get new 5 yr extensions on all properties being uncrossed to give you plenty of room. If this is an ongoing issue, you could look at your alternatives with moving your loans over to another lender who will allow tick and flick extensions of your IO periods.

 

[hugh72]

Thanks for the advice, I will post how I go
Hugh

 

[Peter_Tersteeg]

A simple solution might be to do a partial release of securities if the LVRs are quite low.

Talk to your broker about it. The solution probably needs to take into account larger issues and future goals.

 

[Redom]

Thanks for the advice, I will post how I go
Hugh

Hugh, on your new loan docs just read the security section of each loan closely. There should only be one security for each loan. Ive had a client who thought he uncrossed all his loans after going through the refinance process specifically to uncross and take some equity out. Turned out he hadnt, just thought the bank did it correctly as asked.

If your in doubt, give your existing broker a call. Im sure theyll sort it out for you.

Cheers,
Redom

 

[hugh72]

Thanks Peter, yes looking to expand further this year after just paying down investment debt for the last 4 years and thought I should fix some mistakes (uncross) some properties first.

 

[hugh72]

Good advice thanks Redom
Hugh

 

[Rolf Latham]

Thanks Corey sounds straight forward, do NAB still require a new application/assessment if a 5 year IO is about to lapse in a couple of months?

so much so, that unless there are LMI or fixed rate issues, id often suggest to jump shio, more so if you are into consolidation phase, then a wbc or cba may provide more comfort loan term with their tick and flick IO extns

ta
rolf

 

[westminster]

Hi All
I was wondering if there was a plan of attack in approaching NAB to uncross multiple loans, I know this is their favoured method of operation. My most recent loans are with a broker from this forum and were set up correctly but I would like to fix the mess I created first before I knew better and then see my broker to expand further. The loans are across 5 properties LVR 35-40% p&i and io
Thanks
Hugh

Rather than trying to sort it out yourself I would engage your current broker (who it sounds like you are happy with) to uncross it for you.

He/She may have some good ideas/strategies for the uncrossing which will further enhance your ability to expand further after its completed. This may be refinancing to another lender etc as part of the uncrossing etc etc

 

[perthguy]

Rather than trying to sort it out yourself I would engage your current broker (who it sounds like you are happy with) to uncross it for you.

He/She may have some good ideas/strategies for the uncrossing which will further enhance your ability to expand further after its completed. This may be refinancing to another lender etc as part of the uncrossing etc etc

Another vote for talk to your broker. Mine just did a re-fi to a lower rate and uncrossed two loans at the same time. The new deal is a great deal!

 

[hugh72]

Thanks guys, great to get a different perspective as it is easy to let things drift along and not take action when there might be better options.

 

[belleran]

My loan was crossed by NAB and my broker said it would be about $1800 to fix and it was the broker's fault it happened so have left them as they are. Should it cost this much to correct?

 

[Peter_Tersteeg]

The variation fee with NAB (HomeSide) products is $300 (from memory). Do you have 6 properties crossed?

It might cost $1800 to rectify for 2-3 properties if your broker is planning to refinance you to a different lender. It's unlikely that this is the ideal outcome for you.

If this is the same broker that crossed the loans, it's time for a new broker, or you get them to pay the costs to rectify the problem.

 

[perthguy]

If this is the same broker that crossed the loans, it's time for a new broker, or you get them to pay the costs to rectify the problem.

Not necessarily. It depends on the circumstances. My broker used crossing as a strategy to get us out of a very bad situation, with my full knowledge and agreement. Basically, between myself and my investment partner we had ~$1,000,000 worth of low doc loans at 9.5%. This was only just over 3 years ago, so that was an excessive interest rate for the time. No lender wanted to touch a refi but my broker got a deal with AMP at 6.39% but it required two properties to be crossed. Fast forward 3 years later and we are doing another refi to drop the rates to 4.63% and uncrossing at the same time. From low doc to full doc in 3 years and 9.5% to 4.63% in 3 years. It's all worked out well for us. Of course I would not generally recommend anyone cross unless absolutely necessary and part of an overall strategy. Just commenting that crossing is not an automatic fail and sometimes is necessary.

 

[Peter_Tersteeg]

I low doc loan is one of those situations where crossing can work in your favour, I'd done this myself in the past. That would be 1 of about 3 occasions where we've deliberately crossed loans in the last decade (family guarantee loans being the exception).

5 properties with an overall LVR around 40%, you'd be hard pressed to find a legit reason to cross.

 

[perthguy]

5 properties with an overall LVR around 40%, you'd be hard pressed to find a legit reason to cross.

True. Although they are 40% now. We don't know what the LVR was when the loan were set up. Still, 5 cross properties is highly problematic at the best of times. I was very grateful to my broker for bargain down our crossing to only two properties because I ended up selling one the bank wanted included in the deal. 2 were easy to uncross at the right time. 5 is just painful.