Hi all,
I’ve been made aware of some significant changes in how investment property loans are being handled when the borrowing entity is a trust, and I wanted to pass this on.
Mortgage brokers have been advised that several major lenders are now pulling back from lending to trusts through the broker channel. In many cases they are either declining these applications outright or pricing them so uncompetitively that they’re effectively inaccessible; some reportedly adding up to 150 bps to the interest rate.
Interestingly (no pun intended), this shift appears to be limited to broker-sourced loans for now. Approaching lenders directly, particularly through business banking, or using a broker with access to business banking channels still seems to be a workable pathway.
Thought you should be aware.
Regards,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanks Steve. Good to know.
So far it is just Macquarie Bank that was said they will no longer lend to trustees or to companies (whether acting as trustee of not).
CBA have tightened up, but they will still lend to people and companies acting as trustee where they hold credit facilities with CBA already for more than 6 months – and this includes guarantors whether acting as guarantors or not.
I think that existing trust or company debts will still be disregarded where these entities are self sufficient and are not borrowers.
I am not aware of any other changes at this stage – but it could be a general tightening up about to happen.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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