- bm17Participant@bm17Join Date: 2010Post Count: 47
Been a little while since my last post but I was hoping to get some of the very qualified broken feedback on a question I have about cross-security.
I am looking at refinancing my 3 properties (2 investment, 1 PPOR) and wanted to ensure I did not get locked into having these cross securitised. My situation at the moment is all 3 properties have different lenders (ING, Westpac, ANZ), with each property acting as security for one loan only (i.e. properties are not cross securitised).
My questions is, if I was to refinance and put all loans (and therefore all properties) with one lender, but had separate loan accounts, would this result in cross-securitising the properties? I imagine the new lender would want to take all three as security to reduce their risk but was wondering if this could be avoided?
If anyone had any feedback on the best way to approach this that would be greatly appreciated!Don NicolussiParticipant@donJoin Date: 2005Post Count: 1,086
BM 17 – your question seems really just double checking your gut instinct – which is correct. Yes you can keep your loans separate at the one lender. No problem. However, with the structure you have now I am guessing that the reason you want to move is price or rate. Serviceability (or the way banks calculate what you can afford) will be slightly different across a panel of lenders. With multiple properties a consideration is whether the bank will use your actual repayments to calculate your affordability for a new purchase (or the refinance) or their assessment rate.TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069RickParticipant@rixterJoin Date: 2003Post Count: 15
You can refinance all loans with the one lender. Just check your loan docs before signing one property is securing the loan. In my opinion having the properties spread across multiple lenders as you have it now is best for minimising your exposure risks.
bm17Participant@bm17Join Date: 2010Post Count: 47
- This reply was modified 5 years, 1 month ago by Rick.
Thanks everyoe for your comments, very useful.
Just another quick qestion, if I was going with a single bank, would I do a single application for the total loan amount and then split the accounts, or would it need to be 3 separate applications (i.e. one per property)?
Thanks again.Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069[email protected]Participant@spartantomJoin Date: 2015Post Count: 18
If you’re simply chasing a better rate it may pay for you to consult with your broker about having the banks reprice your loans, or if you don’t have a broker talking direct to the banks.
The banks are very competitive at the moment so you may find that if you suggest you’re leaving them for another lender they may well match the rates or come close to it.Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
There are many factors to consider as the features required for an IP loan are different to a PPOR loan.
The 3 lenders you have mentioned are not ideal for a rate sensitive client and I am sure you could do better.
Would be looking at 3 separate applications especially if you can get some of the fees waived.
Yours in Finance