jambvParticipant@jambvJoin Date: 2003Post Count: 44
I have 2 properties on the one loan. Loan was 500k split evenly between the 2 props. I’ve now sold one for 350k & the bank wants to take 340k instead of 250k- 5 years of payments. What are my options?Corey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
Grin and bear it – this is why you never cross collateralise your properties.
What is the remaining property valued at? Judging by the loan reduction amount I’m assuming they’ve viewed it’s valuation as 200k.jambvParticipant@jambvJoin Date: 2003Post Count: 44
Retail value of remaining prop is 360k with bank valuation of 330k.Ethan TimorParticipant@ethantimorJoin Date: 2016Post Count: 282
Are you dealing directly with the bank? If so, you could ask them why they want to have the LVR so low. Maybe it’s a borrowing power issue?Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
Retail value of remaining prop is 360k with bank valuation of 330k.
The bank will generally want to keep LVR at 80% – so if remaining property has been valued by them at $330k then remaining loan should be $264k. So if it was $500k initially – then you’d probably need to pay $236k…..so not sure why they’re asking you to pay $340k unless the property is in a high risk postcode with a restricted LVR
JamieTomParticipant@thebeardedbrokerJoin Date: 2016Post Count: 10
I assume you wrote the loan directly with the bank? You may be able get a broker on your team by providing written advice to the bank that they are going to represent you. Not sure they can do much in this case though.Corey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
As Jamie has noted based on that estimate bank value it shouldn’t be that low as uncrossing loans generally reduces the facilities to 80% of the remaining security. If it’s not a high risk postcode of security (with some lenders things like apartments or multiple dwellings on one title can reduce the LVR allowable).TerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
I have 2 properties on the one loan. Loan was 500k split evenly between the 2 props. I’ve now sold one for 350k & the bank wants to take 340k instead of 250k- 5 years of payments. What are my options?
Your options are limited as this is probably due to serviceability. Under the agreement you entered with the bank they would be entitled to retain the proceeds of any sale if they think you can no longer afford to repay the remaining loan. They have a mortgage and will only release the property if you accept this.
But see a broker quickly because you may be able to refinance.
This mistake of cross collateralisng loans will potentially cost you dearly.