Forum Replies Created
There are a few factors that limit your borrowing in a case like this. 1: Overall maximum LVR is lowered, 2: The assessment rate to which they calculate borrowing capacity is now spread over the entire portfolio. If it were a stand alone security the assessment rate is applied to the loans directly related to the top-up and purchase. Thats another thing, if it were set up as stand alone a refi and associated costs may not be necessary as you could top-up an existing loan facility for cash out to cover costs related to the next purchase. 3: The lender also has a max debt level (ceiling) and once you reach that debt limit with them thats the end of the road.
I agree
I would still prefer big 4s or ING
remember the long term benefit….The Bank wouldn't (or should I say SHOULDN'T) decline your loan just because it is too close to the original refinance. As long as you have the equity available in your current properties, you have enough income to service the increased debt, and your repayment history / credit worthiness is good – there is no reason why the Bank shouldn't approve the loan. Of course there can be some other factors involved but they are the main things a Bank looks at in the Home Loan Application.
Hope this helps Cathy. Good luck!
Probably low doc may be the way you would get it through, and if serviceability is the issue, then the banks are scaling back to 60%, and not doing 80% unless income/ serviceability and assets is quite high and can be proven.
The banks and the Mortgage Insurers at the moment have tightened up a fair bit and they will currently really assess serviceability, as the current circumstances is that you have not sold your house yet, tax return they are going of is not meeting their serviceability requirements and the bank is probably thinking it is not currently for sale, there is no contract on it or unconditional contract and what happens if you cannot sell or it sells for a lot less- so they are really looking at the current circumstances nor the projected or planned strategy.
Really helpful thread thanks for sharing with us….
Good Advices thanks..
Without private investment in the development of new housing and rental accommodation, there would be immense pressure on States to deliver public housing – which is already in a sorry state and there is no budget to properly accommodate substantial increases in demand.
by Majella Corrigan
From Money Magazine, July 2006If you don't have a credit rating, don’t own a car or house and your income is low or solely from government benefits, it has been near impossible to borrow from a mainstream lender like a bank.
Now two major banks have separately entered the low-income loan market, offering loans of up to around $3000 to enable people to borrow and also to build up a credit rating.
In the past, so-called pay-day lenders made their presence felt in this area, but this was often a debt trap for those with little spare cash. Pay-day loans – marketed as cash to tide you over until the next pay day – could involve enormous rates of interest, as much as 48%, making it difficult to repay and often making the borrower’s financial situation worse.
Now ANZ and NAB both have low-income loans on offer through their relationships with separate charity organisations.
ANZ announced in late May it had joined forces with the Brotherhood of St Laurence to provide a program called Progress Loans, which will give people on low incomes access to loans between $500 and $3000 to pay for essential items. Three loan officers funded by ANZ will be at the Brotherhood’s offices at Fitzroy and Frankston in Melbourne to guide prospective borrowers through the loans process.
Each loan will have a $40 approval fee and the annual interest rate is 12.7%, which ANZ says is in line with rates for most unsecured personal lending. It plans to charge this rate to make the program self-sustaining.
The Brotherhood and ANZ will pilot the program for six months, after which it may be extended to more partners and states.
To be eligible for a Progress Loan, applicants must have a Health Care Card or Pension Card issued by Centrelink, have lived in the same residence for more than six months and be up to date with utility bills and rent.
Tony Nicholson, executive director of the Brotherhood, said in a press release that many people on low incomes had traditionally been excluded from affordable mainstream financial services. They often had to rely on very expensive forms of credit or simply go without household items that most Australians take for granted. “Families we work with survive without a fridge or washing machine, using an esky to keep food cool and visiting the laundromat on a daily basis,” he said. “Over the space of a year this adds up to more than the cost of a personal loan.
“With Progress Loans we will be able to assist many of these families to borrow money via a mainstream credit market, in a way which is sustainable and protects them from exploitation. Our research and experience indicates that Progress Loans will help more people on low incomes build a base of assets, take more control of their financial circumstances and overcome poverty traps associated with financial exclusion.”
The research also showed that people on low incomes were generally good at repaying, with a default rate of just 0.9%.
National Australia Bank in April this year expanded its low-interest loan offering, which is in partnership with the Good Shepherd charity organisation. The loan program is called StepUP and is offered in NSW, Victoria, South Australia and Western Australia.
It lends amounts of $800 and $3000 at 6.99%. It is seen by NAB as a break-even product.
The StepUP loan is also seen as a way of getting people used to making repayments and building confidence that they can do this. It is seen as bridge between NILS, a no-interest loan scheme run by Good Shepherd, and access to mainstream credit. NAB is also considering a low-cost insurance product and a low-interest loan for basic business enterprises.
If you are needing finance from a lender there could be real problems – as they see it as a niche market situation (even though our population is ageing) and may make you jump through a lot of hoops to get the money or they may not even consider leading to you.
Good Help Thanks for Sharing This..
