Westpac - second loan, avoiding x-coll

[goponcho]

Hi,

Have an IP with Westpac, looking at getting a PPOR loan with Westpac too through the bank, but avoiding X collateralisation.

If there is only one security under the security section of the loan, is that ill need to do to ensure it is not x collateralised?? Anything else i need to do??


In the loan doc it says if you sign, you give Wxpac the right to apply money in any of your accounts towards amounts payable by you.
- is this their all money clause?
- will this only be applicable if i default? because i am comfortable with that.
- or can they just willynilly shift their money around???

Thanks guys!

 

[Rolf Latham]

Hi GP

in Wbc docs the security is in the last few pages.

if only one is listed you are ok.

On the "all monies" yes, if you are in default they can access all monies.

Default can in legal terms, be caused by other things than you, but if you get too paranoid you will never sign for a loan

ta
rolf

 

[goponcho]

Hahaha okay sounds good, thank you!

But with teh all monies, generally tehy have a legitamite reason to take money from your accounts?

What if the value of a house drops, can they take money from your offset account?

 

[Peter_Tersteeg]

The all securities clause and loosing your whole portfolio are nowhere near the most common reasons why you should avoid x-coll.

At the moment a client has a portfolio that is completely cross collateralised. They're currently obtaining a loan with a different lender, but that lender is querying why their home is mortgage to a lender, despite there not actually being a loan over that property.

There's some complexities to the overall deal, but suffice to say, their loan with the second lender would be going a lot easier if the rest of their portfolio weren't crossed.

Cross collateralisation can completely mess up your greater strategy. There's times when it's useful, but for a basic residential portfolio, it's rarely necessary. If the person advising you is suggesting you cross collateralise, get a new adviser.

 

[Peter_Tersteeg]

Hahaha okay sounds good, thank you!

But with teh all monies, generally tehy have a legitamite reason to take money from your accounts?

What if the value of a house drops, can they take money from your offset account?

Generally they won't do this when the status quo is in place, but if you sold a property or tried to move one to a different lender, I have seen lenders ask for a cash contribution before they release the title.

 

[ok180]

looking at getting a PPOR loan with Westpac too through the bank, but avoiding X collateralisation.

This is your problem, you're going through the bank. Don't deal with them directly because they will tie you up for as much security as they can. The more security they have the better their books look. No benefit to you.

Get in touch with one of the many good brokers on this forum and they will point you in the right direction. They might even let you stick with Westpac but not X colled to the hilt.

 

[goponcho]

Generally they won't do this when the status quo is in place, but if you sold a property or tried to move one to a different lender, I have seen lenders ask for a cash contribution before they release the title.

Thanks of sharing your experiences, good to get an idea!

 

[goponcho]

This is your problem, you're going through the bank. Don't deal with them directly because they will tie you up for as much security as they can. The more security they have the better their books look. No benefit to you.

Get in touch with one of the many good brokers on this forum and they will point you in the right direction. They might even let you stick with Westpac but not X colled to the hilt.

If a broker obtains the same loan for you from the bank, what would be the difference going through the bank? Like what would they do differently? If there is only one title on teh loan document?

 

[Rolf Latham]

If a broker obtains the same loan for you from the bank, what would be the difference going through the bank? Like what would they do differently? If there is only one title on teh loan document?

"Most" brokers WONT do things differently, since most brokers are either bank trained, or trained by organisations or systems that are headed by ex bankers.

Some brokers will structure things so that they borrower has max flexibility.

This serves BOTH the broker and the borrower.

ta
rolf

 

[Brady]

Find someone who you trust to do the best for you, be it banker or broker.

 

[Peter_Tersteeg]

If a broker obtains the same loan for you from the bank, what would be the difference going through the bank? Like what would they do differently? If there is only one title on teh loan document?

You've gotten some good advice and the others benefit of experience asking questions here. Did you get the same thing through the branch?

As both Rolf and Brady have noted, you don't necessarily get (or don't get) this advice from from every branch or broker. Perhaps contact one of the brokers from the forum.