Long time lurker, you know the deal.
Looking to refinance with a large cash out component. Cash out component is for a couple of reasons but beoker insists the banks will wants proof/invoices for what we want the cash out for. Without providing these (can’t at this time) they won’t go further with application. Anyone had any experience with large cash outs without providing hard proof to the banks as to the purpose? If so, which banks/products did you use?
Thanks
if more than 100K, banks will ask for quotes/invoices
None when I refinanced few weeks back..
I got several hundred k cashout just by saying I wanted to do renovations and buy a new car. The LVR was quite low though.
In current market situation, I think the bank would prefer low LVR loan. Having higher LVR with cash out might mean the bank is taking higher risk for that loan
they shouldn't ask for invoice, but more of a written quote to see if you are going to spend the money on what you say you are.
We got a large cashout when we refinanced just prior to COVID.
One place I applied and told them it was to pay off an older family member's mortgage. They refused.
Second place we applied and told them it was for car and caravan. They were fine with it. No invoice or receipt necessay.
When we did a cashout as part of a refinance to STG, we just had to provide our own estimates or quotes for the items we intended to spend it on.
I did a large cash out. Just needed to say I'm gonna buy shares and showed them I already owned lots of shares. The bank was satisfied.
Invoice is after you spent the money, quote is before. They only want to see a quote for something….
yep, something that they can get if you are late with the loan.
Hence, no helping friends, travel or medical bills. Only cars, boats,etc..
As a bank I think it wants the amount used to be under your name. So things like buying cars, caravan, new investment property, new business etc should work. Show them picture of houses and cars.
I refinanced twice in the last year and got cash out upto 80% LVR, with no questions asked.
Which bank was this ?
Both westpac and anz
I think this may be more to do with anti-money laundering.
For some transactions there is a requirement for banks to ask what the money is to be used for. The reality is all banks will probably want to be able to put something down that is legitimate. Shares, investments, reno are all valid. As opposed to, my cousin in Syria needs a few bucks, I'll be joining him there next month… not so much.
The bank fears the Australian Prudential Regulation Authority and AUSTRAC, not extending your loan terms and making more money from you. That bit they would be quite ok with.
You might also be able to provide reasons such as "refinance to buy investment property".
You would need to provide them a copy of contract of sale (the draft that you get the agent to send you after inspection, and maybe rental appraisal).
But depending on your borrowing power, you might want to find property with price that is sensible.
I think they'd push you towards an investment loan secured against the property for that purpose.
Not necessarily, it doesn't have to be cross-collateral (if I got the term correctly).
Some new property investors refinance their PPOR to withdraw extra equity and use this to pay for the deposit for their investment property (20%) to fully maximise their tax / negative gearing setup.
You'd still need to take the remaining 80% as investment loan secured against this investment property though if you are to go ahead with the purcase.
But for the purpose of refinancing, banks in general won't go beyond the initial check that you intend to purchase one?
That's what I was told at least by the mortgage broker.
just say you plan to do renovations?