Mortgage Loans- Investor (Settles in 1 Month) First Home Loan

LIneedahome123 on 21/04/2018 - 11:50

Hi forum,

I recently purchased an off the plan apartment and require a mortgage loan. I'm not quite familiar with the process and wanted to run by some things.

In terms of fixed/variable is it safe to say variable is the way to go if I want flexibility for increased mortgage repayments (it also seems like fixed have a lot of clawback fees for early exits etc). Prefer to have an offset account to reduce interest payments.

Not sure whether to go with a non-bank lender or big 4 bank, non-bank seems to provide lower interest rates and more flexibility but will be highly influenced by economic conditions? (also less regulation as it doesn't report to APRA). Is this significant or is it relatively safe?

Also not sure if i should do independent research through those rate comparison websites or go to a mortgage broker (they only work with select lenders and might push products). Does anyone have any success with mortgage brokers in Sydney?

Also in terms of financial situation,
Apartment is 815k, 10% initial deposit is paid, 10% at settlement will be paid in June. Salary is currently 55k before tax but I have financial help from family (they plan to refinance their current mortgage and pay off some of the principal in my loan). Also salary would be expected to increase to at least 90k after 2 years (moving from Big 4 to industry). Rental income will be $628 a week and for loan size preferably something around 500-600k.

I had a look on ozbargain and it seems UBank is quite popular. Has anyone had experiences with State Custodians? Currently 3.89% for investor with basically everything I require. Any other recommendations for loans in the market at the moment for my situation? Thanks in advance.

Financial

Comments

  • [Deactivated] on 21/04/2018 - 12:05
    +11

    55k buying a 815k apartment?
    I can see financial ruin already

    • dcep on 21/04/2018 - 12:24

      straya !!!!!!!!

      over 200% household debt to income
      over $7 trillion housing market
      over $1 trillion foreign debt

      good stuffs !

      • ihbh on 21/04/2018 - 15:43

        good stuffs !

        good stuff !

  • Quantumcat on 21/04/2018 - 12:11

    If you are investing you shouldn't worry about penalties for paying it back early, you would want to keep a mortgage on it as long as possible to claim tax benefits.

    I'm surprised you got a loan for so much on so little income, I was on about the same income and buying a $400,000 place was the absolute upper limit allowed to me with 20% deposit and low living costs. I assume you already have an offer of a loan somewhere prior to purchasing?

    Also, the money given to you by family will not count for the purposes of your liquid cash available when banks decide whether to give you a loan, it has to have been in your account for a long time, since they don't want people borrowing money for a deposit and then having a larger loan total than the banks thought you would have, makes the risk higher.

  • Ineedahome123 on 21/04/2018 - 12:13

    i talked to NAB and they offered 450k at 4.29% fixed, CBA and Westpac were a no go.

    I did an online questionnaire and State Custodian offered 550k at 3.89% which is why I wanted to enquire about it.

    But as I mentioned, a lot of it is going to be from financial support from family, just wondering where I can get the best loan.

    • Quantumcat on 21/04/2018 - 12:16

      You should talk to a broker. Even if you don't end up going with an offer from them, they will help you work out where you stand with this family money etc. Probably you'll have to buy jointly with them or have them as a guarantor or something.

      • Ineedahome123 on 21/04/2018 - 12:17

        Do you have any suggestions for a broker? There are so many competitors I don't know where to start.

        • Quantumcat on 21/04/2018 - 12:19

          I went with Mortgage Choice on my first one, they were really good, Aussie wouldn't talk to me at the time. Went with Aussie the second time but the broker made a mistake of some kind which delayed the settlement and caused extra work for my conveyancer. I don't know anything really about how to find a good mortgage, I just listened to their advice. So maybe others can give you better advice.

        • Ineedahome123 on 21/04/2018 - 12:22

          Thanks, will look into MoC and Aussie

  • dcep on 21/04/2018 - 12:14
    +1

    1) Fixed/Variable. It depends on which deal. Most fixed has capped extra repayments or even don't allow any.
    You can go mixed 50-50 fixed variable split loans.
    But given the current climate, you won't see any significant rise in interest % till after 3 years from now.

    2) Offset in non-bank is not guaranteed if they went down. Don't go non-bank if you think another credit crisis is around the corner (which it is). Their rates will rise real quick as their funding from wholesale are short term.
    Ubank is backed by NAB so they're good.

    3) Find good broker which can do better than advertised rates + offer cashback. I don't have anyone to recommend here as Ozb seems not openly sharing their broker details.

    4) Don't over-leveraged by forecasting your achievement. I know you've based your projection on industry norm but remember to factor in external influences especially in current climate.
    Tough times ahead, mate. And it won't be pretty. It's gonna be real ugly this time. Take care.

    • Ineedahome123 on 21/04/2018 - 12:17

      Thanks for the feedback, didn't know that about UBank, that does give some comfort.

  • smuggler on 21/04/2018 - 13:16
    +5

    Apartment is 815k, 10% initial deposit is paid, 10% at settlement will be paid in June. Salary is currently 55k before tax but I have financial help from family

    What is wrong with you?

    • follow on 21/04/2018 - 15:03

      wonder how much the ring will cost

  • GangGang on 21/04/2018 - 16:26
    +1

    This is crazy. Putting 10% down before you've even gotten a pre approval. How do you even know the bank will give you the money?

    I'm in the same situation and you better get a move on. You have around 1 month and a half, it sounds alot but it isn't. There are alot of problems. Be quick, don't want to see the deposit gone.

  • Steptoe on 23/04/2018 - 13:37

    Off the plan suggests it’s not yet built?

    Have you got a subject to finance approval clause in the contract?

  • [Deactivated] on 23/04/2018 - 13:56

    lol do you think you just jump from 55k to 90 in 2 years? dreamin

  • jsheroes on 23/04/2018 - 20:04
    +1

    Clear troll. Otherwise WTF. Off the plan. Apartment. Sydney. 2018. Commit before approval. Need a loan 10+X earnings. Madness.

  • imaxsameer on 02/05/2018 - 20:25

    Have you looked into BankWest? There are some cashback deals going on atm.

Login or Join to leave a comment
Login Join