You may have seen my last post with regards to a potential loss of $20k deposit. Luckily for me I have been able to on-sell the block of land and reduced my eventual loss to just under $10k. Many valuable lessons have been learned during this experience and I thought I'd briefly share them with you all as well as pose the question 'where to from here?'
1. Never take a broker's word as gospel. If they casually state "you'll have no dramas getting finance" – get them to show you the figures they've based this on.
2. Always have a contingency plan
3. Always have a second contingency plan!
In my case I approached a broker who unfortunately didn't entirely understand structuring and who's communication skills left a lot to be desired. I then went direct to the branch manager at a different bank (contingency plan) and although her little calculator said everything added up, unfortunately for me, affordability alone is not enough to get finance these days.
Lastly I chose to on-sell the block – private sale, I have good tradesman friends who are always looking for another development. After 5 months and a lot of heart ache, sleepless nights and pulling money from every orefice, I got this deal over the line.If anyone would like further information, please send me a private message and I'll gladly give you the full story.
So now,
Where to from here?
I have my PPOR P&I val $460, loan $348
IP #1 IO val $125 loan $130 (cross collaterised with IP 2)
IP #2 P&I val $450 loan $312Now I know you may ask why is IP#2 P&I – purely because it was originally PPOR and to get it as IO I need to refinance both IP 1 & 2 – the loans are with homeside…and in my opinion based on all dealings with them – they are very unhelpful
I also have the Capital loss from this year which I will be carrying forward as I have had no Capital gain to offset.
I don't like my chances of getting finance for a new IP anytime soon – but perhaps some brokers out there may have a different opinion?
Lets chat!
Hi Slallen
Sorry to hear about your previous experiences with Mortgage Brokers.
I know it is easy to be wise after the event but personally I would never take anyones word for the fact that the deal has been approved. I always email or fax to my clients a copy of the approval advice from the lender so they have it in writing.
It is difficuly to comment about your current position without knowing your income and other personal details
i appreciate some of this is personal information and you may not wish to post it on a public forum.
Richard Taylor | Australia's leading private lender
Slallen,
I agree with Richard, get the pre-approval in writing before you purchase.You appear to have sufficient overall equity to refinance but the difficulty is the 2 IP's with Homeside are already at 77% and your PPOR is at 76%, so not allowing much room to move. Refinancing at > 80% brings in the mortgage insurers and you need a reasonably strong case to get approval through to set up a LOC facility.
Homeside must have one of the worst back offices going around, perhaps due to volumes as they offer a decent rate. It was not clear that all the loans are with Homeside or just the IP's. If your PPOR is with Homeside, perhaps look at refinancing it with another lender but you will be limited to 90% most likely including LMI. You need to decide if another potentially $50k or so is enough to go through the hassle, then make sure if you do, you can borrow again for the balance if you are wanting to purchase another IP.
A good broker should be able to run these numbers for you and show you the outcomes.
Lenders look at income, debts and liabilities as well as credit files. As lenders funds are still limited, you need a strong case to present to obtain finance if you are in the 'just meets servicing' group.
Good luck
Greg
You must be logged in to reply to this topic. If you don't have an account, you can register here.
