Is the Redraw Amount Accounted for loan applicatio

Viewing 6 posts - 1 through 6 (of 6 total)

111111
Participant
@111111
Join Date: 2003
Post Count: 29
November 21, 2003 - 2:52 am
I have the following variable rate home loan
Original loan amount : $400K
Current Balance (Oweing) : $300K
Redraw Available : $100K
When I apply for a home loan, which loan amount should I mention to the bank ($400K, or $300K) ?
One broker said If I say $300K without mentioning the $100K redraw, I will be borrow approximately $100K more. Is it true ?
I thought the bank will find out the actuall balance eventuallly.
What do people think ?
Rubbachook
Member
@rubbachook
Join Date: 2003
Post Count: 288
November 21, 2003 - 2:57 am
Probably a good question for a good broker to answer!
In my experience, the banks only care about the principle (not principle minus redraw) – ie the higher of the two amounts. The argument I get is that becuase I can withdraw the redraw at any time they need to consider their worst case.
Perhaps if it was refinanced and you “spent” the redraw amount they may consider the lower of the two.
kay henry
Member
@kay-henry
Join Date: 2003
Post Count: 2,737
November 21, 2003 - 3:09 am
I think so too, 6X1. I think that the bank will only care what you owe- not the amount of your original loan. Unless you’ve withdrawn that 100k already, then the banks will consider it as equity. Get your house revalued, and you may even have more equity to draw on!
kay henry
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
November 21, 2003 - 3:21 am
Tell them the truth – always a good policy.
Truth is you have a $100K asset against a $400K liability. If you use a good broker/banker it shouldn’t give you any trouble.
try to fiddle the figures to look better than it is and it will bite you on the bum!
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
November 21, 2003 - 6:23 am
lenders will want to know the limits of your loans and LOCs as this is what you can potentially bring your loan up to. But it depends on how they ask. Some ask for limits, others ask for loan balances.[]
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
111111
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@111111
Join Date: 2003
Post Count: 29
November 24, 2003 - 2:11 am
Thnaks Guys. I really appreciate your comments.