How many home loans can one bank handle? In my opinion unless you have no other choice it is best to spread the love around.
I had a Home Loan health check in Ballina recently with clients who came to me 5 years ago. When we first met they had recently moved from Interstate. They came to me with 8 properties all under the one bank. This type of structure for investment properties sends alarm bells ringing for me.
The issue with having all of your investment loans with the one bank is that you are placing yourself and your portfolio at risk and you are at the mercy of the lender. If god forbid something goes wrong with one investment property you are putting the other properties at risk. The other issue with this particular situation was the interest rate they were paying was particularly high considering the amount of borrowings with the one bank.
Unfortunately for this couple they had lost a lot of money on one investment property they owned. The property was purchased for over $400K and after the Global Financial Crisis its value had dropped to below $200K. This drop had a significant impact on their ability to change lenders and spread the risk.
Over the past four years we have been able to reduce their interest repayments considerably and move two of their investment loans over to another lender. Already their investment loan structure had improved. Fast forward to 2015 and we have re-valued their properties and we are now able to look at moving more of their loans over to different lenders.
We will un-cross securitise them all so as they near retirement they can easily start to sell them off. Their retirement phase will see them sell their investment properties using the funds to live off.
Are you in need for a Home Loan Health Check? We can came to you – Gold Coast, Brisbane, Ballina, Byron Bay, and Lismore. Alternatively we have an office in Ballina or can do Skype appointments.