[Recommendations] Learning Everything about Home Loans

• 

  EightImmortals on 19/06/2017 - 17:25

  +4

  Owning or investing?

  Tip one, don't try to negotiate with the banksters yourself, use a trusted mortgage broker.
  Tip two, understand the game you are going to be playing, watch the 'Money as debt' docos and 'The Money Masters'.
  Tip three, don't over borrow, we all the McMansion for our first home and the banks will (depending on the day) lend you more than you can afford. Don't take the bait.
  Tip four, save ALL THE MONEY YOU CAN over the next 5 years, no new cars, no OS trips etc, the more you have in savings then the less you will be enslaved to debt for the next few decades.
  Tip five, DO NOT remortgage any built up equity in your home except to maybe leverage an investment property. (Look up the U.S. home equity crisis. http://www.nbcnews.com/business/real-estate/more-homeowners-… “There should be a healthy respect for the use of HELOCs, because they are one of those tools that can be used by homeowners responsibly or irresponsibly,” Blomquist said.

  Pre-crash, many homeowners did the latter, purchasing luxury goods, vacations and depreciating assets like boats or jet skis, only to be caught unawares when housing values plummeted.

  Tip five, pay the damned thing out as soon as is humanly possible without killing yourself in the process.

  • 

    TheBilly on 20/06/2017 - 14:36

    -2

    I have had nothing but bad experiences with brokers. I've done 3 loans directly with banks. Plus there is no negotiation, only set products so you are safe in what you are getting. Negotiation only occurs with brokers, as they have multiple different products they are trying to sell you, from multiple different institutions (brokers have there place as some can work wonders I have heard) but for a first home buyer, it will not be of any huge benefit. Also with item 3, banks do not allow over borrowing in this day and age, unless somebody has a tonne of equity they are using, but for first home buyers it's a big no, unless once again, there is equity in the equation.

  • 

    [Deactivated] on 20/06/2017 - 16:46

    Thanks a lot for this information, very valuable!

• 

  drunkenmonkee on 19/06/2017 - 20:20

  Five years!? Who the hell knows where things will be then!? Save your dough and speak to a broker when you're ready to buy.

• 

  dcep on 19/06/2017 - 20:47

  5 years … you'll have a new partner by then.

  are you studying in uni. or working ?

• 

  boomramada on 20/06/2017 - 09:44

  I want to learn as much as I can about home loans

  There is nothing to learn, just save much as you can for the 20% deposit, that is the key.

• 

  TheBilly on 20/06/2017 - 14:30

  +2

  In 5 years things will change as lending criteria is always changing to reflect market requirements.

  In short I purchased recently and these are my views and some facts:

  1. Mortgage brokers are all shit talking salesmen - All brokers I dealt with achieved the same result
  2. What truly dictates lending criteria and whether or not you get the loan is the lenders mortgage insurance company
  3. Even if you borrow under 80% a bank still has to pay LMI, it is just not passed onto consumer, so LMI criteria still applies and they call Shots
  4. When borrowing over 80% loans, the LMI is passed onto the consumer
  5. There are only like 2 or 3 Lenders Mortgage Insurers in Australia
  6. As a result of item 5, you can go to 5 brokers 3 banks and they will achieve the same result if they are going with the same mortgage insurer
  7. ANZ do their own mortgage insurance and are only bank that does, so they have more control over the process + are more flexible in lending criteria
  8. As per item 7 - that can be good or bad, depending on your circumstances
  9. The big 4 banks and many well known institutions have set products and you should not have many issues negotiating with them directly
  10. Save 20% deposit, have this sitting in your "Bank Account" for at least 6 months - so it has recorded history
  11. Borrowing power grows exponentially when there is more than 1 income (no matter how high 1 income is, 2 incomes is always better)
  12. Non income earners in the relationship are considered to be dependants which reduces your borrowing power
  13. Credit cards, even if nothing is owing, it is calculated as a 100% debt which reduces borrowing power
  14. Casual workers do not get considered in borrowing power, but also are not looked upon as a dependant when an application is made
  15. Need to be working minimum 3 months in a permanent capacity prior to applying for loan if full-time
  16. Minimum 6 months prior to applying if part time or casual
  17. The process is quite simple, however this all depends on who you deal with. You can get approved for a loan in 1 day or 3 weeks.

  Hope it helps !

• 

  Natalia Khanas on 07/10/2017 - 19:59

  -1

  I can recommend you take a loan in Queensland Teachers Mutual Bank (QTMB). According to the http://bankchart.com.au/ this bank offers the lowest interest rate on First home loans for a term of 5 years. The interest rate is 3.69%.