Spread your equity with multiple banks

[rollin20]

Hi,

I got this emailed to me

"Spreading your lending across multiple banks enables you to optimise your equity and avoid cross-securitisation. This ensures you don't stall because you’ve run out of equity or servicing income. Some banks will want to slow your growth with broad-brush rules. If you buy well, nothing should hold you back"

Please let me know your thoughts and if this has worked for you
FYI - I currently have 3 properties under ANZ bank.
Wondering if this is holding me back with recycling my equity.
I have bought each property run down and renovating and revaluing

thanks

[cube]

Might help cross-securitisation and getting shunted in to Commercial lending when you hit 1mil or something, but don't think it helps with servicing or overall LVR.

[drelly]

I have my lending across 4 banks. It does create problems with balancing equity and lending but I prefer not to have all my eggs in one basket. I've seen two many investors go under because they relied too heavily on one bank.

[muppet]

Hey Drelly can you get one of these investors who has gone under
tell their story on PT?

[drelly]

Hey Drelly can you get one of these investors who has gone under tell their story on PT?

That's probably much more useful advice than the success stories in a boom isn't it? Not many people like to discuss losses though. The domino effect is alive and well! One investor (who had been active on here in the past) told me that they had not missed any payments but the bank revised their lending terms and called in all their loans. This was about 2 years ago. Property prices had dipped and they had to sell everything off cheaply in a depressed market to survive.

[Maccachic]

Didn't something similar happen to the Crafer farms?

[NovInvestor]

getting 4 mil from one bank in loans is a lot harder than getting 4 mil from 4 banks.

[Grads]

I would have to say that it is essential to spread your risk across mainstream lenders. Use to be with only ASB, until my commerical manager changed the rules overnight?? - After new lending had been approved?? Valualbe lesson learned! Now use ASB, ANZ, WPT, & BNZ, gives much more options and flexibility going forward. Having your 3 loans with ANZ shouldn't be any issue, banks do have a limit though with their lending (usually 1-2 million) where their LVR ratios & criteria change. The only issue you may have with only 1 lender is that your next purchase with them may be harder? Where moving to a new lender could offer you better terms to get you on board. The other thing I have noticed happening to investors (that have too much lending with 1 lender) is when the sell a property, thinking that it will free up some equity for something else - find at settlement that the bank will apply any surplus to pay down other loans. For example last week I had properties come off fixed term with ASB, 1 AKL property has a current mortgage of $110,000, I asked how much I need to repay for security to be released, was told $239,000? - talk about conservative.. Don't be caught out, always plan ahead, with A,B & C what if scenarios. There are very good lending options starting to finally come back into play again. Just make sure the focus in your focus is on income!
Cheers