Diversified Lending Structure (how to maximise your borrowing capacity)

Very much so.

I started off with a lot of RAMS lending, and outgrew them. When my borrowing cap reached, despite all their assertations that they can also get finance from 30 other lenders, they seemed less than interested in actually doing so.

I then went to another broker who was prevalent on Somersoft and he wrote me a number of loans. However he became very hard to get hold of and would disappear for months at a time when doing development work of his own,and eventually left the forums when a number of people questioned his ethics and practices.

I then talked to a few brokers and settled on Corey specifically because he wasnt a forum spruiker who seagulled the "recommend me a broker" threads and who actually knew his stuff, and was investment focused. This was before he became a good friend and business professional partner, so no bias in that respect.

Yes there are a number of business spruikers on the forums, some openly admit that they are here only to generate new business leads. From my experience at least, Corey isnt one of them.

 

Agree with comments above as I have never meet Corey or used his brokerage services but he has on numerous occasions offered me advice on certain finance queries I have asked him without hesitation..

 

Davem
I have also read positive comments about Corey.

RAMs is a franchise right, so it has its advantages if servicability is an issue and it can work, but won't be the solution every time.

I know who this broker is you mention, but I also know investors on PC still use him, he has a knack of sourcing finance and it's not the conventional way. He was also once my broker.

I won't recommend anyone on this forum anymore, I made a mistake of doing this in the past .......and a few people on PC got burnt.

I don't have a problem with business people marketing on PC, they pay for this, it's really up to us to work out if they stack up.

I think if someone is not doing the right thing, it will only be a matter of time before we hear negative comments. Eventually they stop posting


MTR

 

not the conventional way as in vendor finance?

 

No one is bagging Corey? he has done nothing wrong?
This thread is about strategising with regards to finance

 

nope.
not disclosing certain information, I know dodgy, other stuff but not mentioning it on this forum

with current APRA changes may be harder to get away with what he was doing

 

@Corey Batt great post. Often it's a costly lesson.

Most people focus on the rate and not the real value of the overall portfolio they can achieve. Again another costly lesson. I guess comes down to the value they see in investing and in saving pennies.

 

Hey @Corey Batt i totally understand lender selection and cash out in terms of LMI (hence a lender with good cash out, usually a big 4 is a good bet for anchor lender).

That said I'm still not sure I understand servicing. Let's use my example again and say someone with strong servicing chose ING to anchor with no LMI involved. They now need to fix this structure, why can they not refinance away from ING? If they service at that stingy lender then why would they not more easily service at CBA?

I think for most people this is the thing we don't understand. If you could share specifics on this then I think people would understand this post more.

 

and cash out. They are essentially two of the worst lenders you can be working with if you wish to grow a portfolio.

You should consider talking to someone about refinancing those two loans to a different lender

 

I am not with those lenders but as you have said they are two of the worst for investors. I think most people understand cash out limitations and ofcourse if you have used LMI it would make them hard to leave.
BUT what I and likely others are keen to understand is why you can not refinance away from them if your servicing is stuck?

 

Cash out and LMI are rapidly becoming mutually exclusive these days. If your strategy relies on constantly leveraging everything above 80% you're going to run into problems a lot faster than you would otherwise.

 

Potentially you can, provided servicing at another lender is OK. I'm suggesting that someone with those kinds of lenders should explore that option sooner rather than later, before adding to the portfolio any further, so that you have a better chance of making the change whilst some capacity still exists.

I personally use AMP a lot for clients PPOR, in particular where they have substantial equity and where they wish to build a multiple property portfolio . AMP's master limit functionality can be ideal as a hub/base loan product , where you can run 10 sub accounts on a P&I or an I/O basis, and where cash out is unrestricted to 85% LVR. Depending on your available equity, and appetite for LMI, the sub accounts can be used to fund 12% + stamp duty + closing costs for each purchase., or if there is sufficient equity available, the sub accounts could be used to fund 20% + stamps + costs. ANZ can also be useful as a hub product. They also allow 10 splits but they dont have the master limit functionality. Macquarie can also be useful to 80% as they have unrestricted cash out to 80%. One of the other advantages of these three lenders is the ability to access up front valuations before lodging an application. Sometimes the choice of lender will be determined by where the most equity is available. ie - where you get the best val. I typically order AMP and ANZ and Macquarie vals for PPOR's, and start from there. Once the PPOR valuations are in place, a decision can be made about where to set up the hub facility. It needs to offer multiple splits, I/O and free upfront vals for future needs... STG might also be on this list- their Portfolio product is OK.


Purchases are then made using other lenders. As a general rule ( and I stress "general" as this can vary under some circumstances ) and where a 90% I/O LVR (88+LMI) is required, I'd be looking at using lenders such as ANZ, STG, Westpac, Adelaide Bank or CBA first , and when capacity is reached there - NAB would be next, as they take actuals + 30% loading up to 90% I/O. Provided equity is still available to fund 15% or 20% deposits , when capacity is exhausted with those 90% lenders listed above, 85% LVR is available via Pepper, who service at actuals +20% loading up to 85% LVR, and then 80% via Liberty, who still use actuals to 80% LVR. Until recently Qudos bank would also have featured as they allowed actuals to 90% LVR, but that has since been reduced to 80% LVR a few weeks back, and then to 65% last week...

Some lenders who would have been right near the top of the investor servicing calc list pre APRA, such as Macquarie and Firstmac, are still reasonably OK, but they insist on P&I above 80% these days, so I havent included them as 90% lenders on the list above, for that reason.

 

AMP kind, currently 3.98%

 

I pretty much use Euro's approach - AMP is great for debt recycling and a pretty low rate, but tougher on serviceability, so great to use first with the PPOR (at the moment)

 

I would love to get that list too but it might be different for each situation.

I read stuff here, get excited and ask my broker (he is not on this forum). He generally goes "Yeah... but in your case.. blah blah blah".

 

+1,000,000

I think there has been ample, ample, ample information gifted/ posted here by people such as myself, Redom, Rolf, Corey, Jamie, Shahin, Jess, Marty , Tobe, Terry and others on the differences between pre APRA and post APRA servicing. Certainly more than enough for anyone who could be bothered to spend 10 or 15 minutes reading, to have a very clear understanding of lender servicing policies by now. And if it's still eluding you, contact one of us...

It's right above your post

 

Thanks @Shahin_Afarin for the very detailed post!

 

Great reading.

Have to look deeper into this myself as i always get told ' Servicing Calcs are tight ' maybe your option of many lenders rather then a few is the way forward. In my case I have a few leaseback lots and not all banks look at these favourably(don't really get their logic).

May sound like a silly question but got to ask .... Do all banks needs to know your portfolio for applications or can you provide them with what you think you need to?

 

I'd think that would be fraudulent and irresponsible