All Topics / Finance / Removing cross collaterisation with CBA

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  • Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    2 separate lenders is even safer.

    Richard Taylor | Australia's leading private lender

    Profile photo of fishngymfishngym
    Member
    @fishngym
    Join Date: 2008
    Post Count: 49

    G'day all,

    I had an impromptu discussion with the local CBA branch manager whilst at the food court today.

    Neither of us had all our questions and answers with us but it went a something like this.

    At 80% LVR for the individual property "it was a sure thing" that the loan security could be removed and the property could stand alone. I was told that this was common practice when removing a guarantor from the loan (i.e mum and dad previously providing security to a child's house.)The bank may allow greater than 80% LVR on the stand alone properties, but this will depend on whether any LMI has been paid on the total LVR of the portfolio. If not previously paid, LMI may become applicable to the loans which become stand alone.

    As expected, the CBA will not take into consideration the 100% offset money when it comes to attempting to get LMI below the 80% for a partial refund of previously paid monies. (For example; if you paid LMI on 82% LVR and you paid out this loan within 12 months, you would receive a partial LMI refund. However, if you place $100,000 into your offset account, the bank won't recognise this reduced LVR as this provides no security to the bank. Therefore no LMI refund if the loan still exists.)We didn’t have time to discuss costs etc. The conversation was quite quick, so I might not have heard all the answers correctly but it all seemed quite fair and reasonable There is light at the end of the tunnel. I intend on borrowing again before these ones get down to 80% LVR though.

    Thanks for your help everyone.

    Profile photo of wayneclaytonwayneclayton
    Member
    @wayneclayton
    Join Date: 2008
    Post Count: 29


    hi fish gym,

    i was in your position 2 years ago and was getting the run around from the cba, i then asked them to give me some pay out figures an then someone higher up called and asked what was the problem, she then put someone onto me and we undid all the cross collaterals. which was good and easier than breaking fees etc.

    hopefully you've got enough equity in your place to cover the shortfall on the 2 ips.

    the thing that may go against you at the mo is the banks valuations are very conservative at the mo…..

    so goo luck.

    wayne

    Profile photo of cosmiccosmic
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    @cosmic
    Join Date: 2009
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    For me, this is the most confusing part about entering the IP game, for the moment.  I would like to learn more about this.  What should I read?

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    cosmic wrote:
    For me, this is the most confusing part about entering the IP game, for the moment.  I would like to learn more about this.  What should I read?

    Just read the posts here. Best education there is.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 5 posts - 21 through 25 (of 25 total)

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