Seeking Advice: AMP Bank for a Construction Loan?

Warehouse on 01/09/2020 - 14:12
Last edited 01/09/2020 - 14:14

Hi All

Wanted to get a feel from the community about their dealings and views of AMP Bank. Recently my broker has suggested them and I personally hadn't heard of them for banking before this. I also am not too trusting of the handful of paid "financial review" sites out there talking about AMP at the moment.

The details are:

  • I have 2 assets, both still owing on their loans; 1 established home, 1 block of land
  • Seeking a construction loan to build on the vacant block, designs etc all completed
  • AMP have valued my current assets above expectation = I can leverage to 80% to cover the construction loan without out of pocket cash (this is the most interesting part of this offer)
  • Interest rates TBC

I'm not looking for financial advice per se, but more so what people's dealings or expectations of AMP are as a bank.

My questions to you:

  • Given their recent troubles, do you think its a wise decision to be taking this business over to them or should I be seeking one of the bigger banks?
  • Has anyone here taken out a construction loan with AMP? What are they like to deal with?
  • Is AMP Bank really a "Bank"?
  • Should I be worried about them collapsing (given the recent troubles)? And if they do, would I be safe?

Any shared insights would be much appreciated.

Financial

Related Stores

AMP
AMP

Comments

  • CecilTheChair on 01/09/2020 - 15:15
    +1

    Given their recent troubles, do you think its a wise decision to be taking this business over to them or should I be seeking one of the bigger banks?
    -Perfectly fine, i'd go with what your broker suggests
    Has anyone here taken out a construction loan with AMP? What are they like to deal with?
    -Haven't taken out a loan with them but there wait times used to be longer than the bigger banks
    Is AMP Bank really a "Bank"?
    -Yes it is, no physical high street banks though I don't think
    Should I be worried about them collapsing (given the recent troubles)? And if they do, would I be safe?
    -Doubt they'd collapse, although they may be sold/split up possibly. As you will owe them money I dont think it would be an issue though.

    • Warehouse on 02/09/2020 - 09:31

      Hi. Thank you for your responses. By wait time do you mean approval of the loan, or stage releases?

      • CecilTheChair on 02/09/2020 - 09:40

        Approval of the loan, this was a few years ago though, so they may have quickened up!

  • Zephyrus on 01/09/2020 - 15:37
    +1

    They're unlikely to collapse, so the recent bad press isn't an issue for you. Even if they did, they'd just sell your loan to someone as ultimately it's still a profitable part of their business.
    I wouldn't buy shares in them though.

    • Warehouse on 02/09/2020 - 09:32

      Haha yeah I won't be buying any shares. Thank you for your responses.

  • bemybubble on 01/09/2020 - 16:38
    +1

    Given their recent troubles, do you think its a wise decision to be taking this business over to them or should I be seeking one of the bigger banks?
    Not at all - it boils down to who will give you the coin and who has the lowest rate.

    Has anyone here taken out a construction loan with AMP? What are they like to deal with?
    I haven't but clients of mine have. No issues

    Is AMP Bank really a "Bank"?
    Not sure if defined as a bank or credit institution. In any event they would follow strict protocols for lending no different to the big 4

    Should I be worried about them collapsing (given the recent troubles)? And if they do, would I be safe?
    Remember, they are lending you money. Not the other way around. If anything they are more worried about you than you are them :)

    • Warehouse on 02/09/2020 - 09:36

      I haven't but clients of mine have. No issues

      Any tips on how to best manage the bank efficiently? As in do they get particular about specific information before authorizing next stages?

      Remember, they are lending you money. Not the other way around. If anything they are more worried about you than you are them :)

      Great point!!

      Thank you for your responses.

      • bemybubble on 02/09/2020 - 09:47

        Any tips on how to best manage the bank efficiently? As in do they get particular about specific information before authorizing next stages?

        Can't remember truth be told. But nothing comes to mind about the client complaining FWIW

  • Seraphin7 on 01/09/2020 - 17:17
    +1

    Is AMP Bank really a "Bank"?

    Yes. They hold a banking licence and are officially termed (like all other "banks") as an "Authorised Deposit Taking Institution". They got their banking licence in 1998. I was part of the project team that actually set the whole show up back then. I've seen the licence.

    Given their recent troubles, do you think its a wise decision to be taking this business over to them or should I be seeking one of the bigger banks?
    Should I be worried about them collapsing (given the recent troubles)? And if they do, would I be safe?

    The recent troubles have nothing to do with the Bank as they are legally separated. The only relationship that is relevant is one of ownership. The assets of the Bank are separated from the parent entity and the Bank is subject to all the same rules as any other. If there was any collapse, the only issue would come in terms of accessing further financing. You would need to speak with your broker about any specific terms around construction loans and ongoing drawdowns as the construction progresses. Once they've lent you the money, the problem is effectively not yours. If a Bank were to collapse, the loans would be sold to (likely) another bank and you would simply have to repay them.

    • Warehouse on 02/09/2020 - 09:38
      +1

      Thank you for the detail. This is exactly what I was looking to know and has reassured me a fair bit.

  • Warehouse on 02/09/2020 - 09:29

    Thank you all for your detailed responses. You've increased my confidence considerably. Next step is hopefully some of these restrictions lift before we're due to start building!! (I'm in Vic - 5 people on site maximum…)

Login or Join to leave a comment
Login Join