To Refinance or Stay Put?

LZloyKrys on 01/10/2016 - 21:13

I have a dilemma - what to do with my home loans.

Currently having three loans with NAB:
$430k - P&I PPR (approx value $850-900k), 4.15% variable with offset
$90k - I/O secured against the PPR, 4.45% variable with offset
$459k - P&I investment (approx value $685-700k), 4.05% variable with offset

I was looking at current rates and it looks like than a better rate can be had elsewhere, but my broker advised me to stay put because I recently (from July) went on contract with the company I worked for permanently during the last 3,5 years, although it's a long term contract with PAYG payments through a payroll company (and much better pay), he says it is unlikely that lenders will look favorably at such income.

What is your reckoning, fellows?

Financial

Comments

  • pais on 01/10/2016 - 21:40
    +1

    My advice from my broker was that the big banks are generally more flexible with things like contracting/casual work, but obviously the downside is that they don't have the most competitive product on the market. With that said, it definitely doesn't hurt to put the feelers out to other financial institutions; the worst they can do is say no.

  • sklzthtklz on 01/10/2016 - 21:44
    +1

    Call NAB and ask to talk to someone regarding your rates. It's a bit different with broker side mortgages but there is a process in place. Nobody there wants you going somewhere else so if you're looking at rates at other banks let them know that.

  • naritas on 01/10/2016 - 22:11
    +2

    Some general tips:
    1. If you are by and large doing the same role on similar pay (could be the same pay as before but with casual loading) and with the same employer (but as a PAYG contractor), you may be defined under permanent casual credit criteria. Typically under such criteria you will need to demonstrate a few years worth of role consistency or 12 months in the present role depending on the lender. Based upon the scenario you describe about your work history may mean you have the ability to be approved with other lenders.
    2. If one is contracting to a payroll company using an ABN you will commonly need to demonstrate 2 years worth of consistent income to qualify with cheap lenders with some lenders accepting 12 months.

    NB: Your qualifications, the terms of your contract, your net disposable income, your credit score and whether you have a co-applicant will all influence which lenders may consider you for approval. As such, it's hard to say for sure what your options are without knowing your full credit profile. Suffice to say, if you have a strong credit profile (and preferably a stably employed co-applicant), you could quite possibly have options that are more keenly priced than NAB available to you.

    Hope this helps.

  • grabngo on 02/10/2016 - 09:41

    Listen to your broker
    Banks are clamping down on contractors.
    Full time work has more weight
    Besides,the lender knows his job just like u know yours.
    Don't upset the applecart !

  • Stalker on 02/10/2016 - 10:28
    +1

    Your rates are pretty good anyway. I just refinanced $500k with St George at 3.95 (variable). Unless you are prepared to move away from the big banks, I'm not sure you will get too much better. Perhaps book an appt with NAB and ask them what they are prepared to do to keep your ~$1m debt with them. ;)

  • ZloyKrys on 02/10/2016 - 19:40

    Thanks a lot for your thoughts chaps, will give NAB a call but would not hold my breath, though. They've set current rates a few years ago when I was employed permanently… Small lenders are okay, as long as they are not charging application or valuation fees before approval, had bad experience with loans.com.au who had charged me $220 valuation fee and undervalued my PPR, they called later saying there was a mistake but I had to go to another lender already, a costly mistake it was!

    If any broker out here is willing to have a closer look, you're welcome to drop me a message!

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