Hi Guys,
Need some guidance understanding refinancing with banks.
My Situation:
I am building Investment Property for which I took loan and ignorantly crossed my existing Property with the new Investment to keep it below 80% saving mortgage insurance.
To acheive 80% of total crossed value, I was short of around 25K, which I put in from my pocket.
Now I am realizing that I did it all wrong and need to correct it.
1. How can I get the 25K back that I have invested in Cash from my pocket which I could have actually used to reduce my Personal Mortgage ? which would have resulted in me paying less interest on my existing property.
2. Whats the best process of breaking Cross Collaterallization.. Should I, vary the limit, that is reduce my personal mortgage by 25K and increase the mortgage by 25K (but its like refinancing) first and then go with another vendor ?
Thanks for your help.
1. too late. You have paid the money.
2. Apply to the bank to release security or move banks by refinancing it and fixing at the same time.
Since it is just a $25,000 shortfall to 80% LVR you may want to wait a bit for some growth and then refinance.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi raj
As Terry mentioned hate to say the 20% has been and gone and you cant get that back.
Not sure who your lender is but there are a couple of tricks of the trade with certain lenders in reducing your LMI when it comes to land and construction.
Think i would be waiting until the building is completed and then taking out a standalone loan of 90% secured against the IP security with a separate lender.
Should then look at an equity loan on your PPOR to use as deposit for the next IP to make sure you dont fall into the same trap a second time.
As i often say careful loan structuring makes a big difference when i comes to the long term.
Most bankers would have no idea or if they do it isnt in their interest to suggest an alternative.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Guys for your reply.
At the time of taking loan, I was told that I can vary the figures like reduce my mortgage value by 25K and increase the value of my IP after the loan is fully withdrawn/construction is completed.
Is that incorrect ? I went through Mortgage broker and that was the advise, now I am trying to doubt it ?? and thats why I put in this forum.. ?
Thanks in advance.
That would be correct.
But it is not tax effective. It is bad advice.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
With that quality advice might want to steer clear of that Broker in the future.
Next thing he will be telling you the Earth is flat and the moon is cheese.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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