If you look back through Kierans old posts you will see how things have turned pair shaped in years past for some investors with banks demanding statements of position from clients etc. Kieran, Olly and the like are not talking through holes in their heads. They speak from experience and $#!T does happen.
I explained to the bank that the interest on the revolving account was well covered by the income from other properties, that the amount owing was under $150,000 and was well below the value of the property, as well as being well under the revolving credit limit. Not only that, but I had an overall LVR of only about 20%.
Under the terms of the revolving credit, the bank gave me one year's notice to pay. The property was leased to a national retailer about 6 weeks' later and they then forgot about the matter. But I did not.
I think they just wanted to obtain security over other properties which were not mortgaged at all, as the bank was not in danger of suffering any loss, and the interest was always well covered.
The lesson here is that when it comes to the crunch, the banks are only concerned about themselves. They do have a point, as they do have to look after the deposits of their customers, but at the same time, they don't want to reduce their profits.
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