[AMA] I'm a Mortgage Broker, I Like Saving Myself and Others Money! Ask Me Anything!

Lmortgagebroker on 22/10/2018 - 19:14
Last edited 22/10/2018 - 22:20

Hi all,

I'm a mortgage broker, have been in the mortgage industry since 2012.
Don't like seeing poor advice or bad deals so decided to jump on here and make a post and help out when I can.

I'm the kind of mortgage broker that informs my customers of the eBay Good Guys special to upgrade their whitegoods.

Here to answer any questions you have about your home loan and mortgage products.

Comments are general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.

Introduce Yourself

closed Comments

    • mortgagebroker on 22/10/2018 - 22:37

      Need a lot more information. If you already have 25% equity I would say income would be more important than savings.

  • ChillBro on 22/10/2018 - 22:25

    Do you know many other brokers that charge a fee if the borrower does not settle within a certain time period after arranging a preapproval for them?

    • mortgagebroker on 22/10/2018 - 22:42
      +3

      I know a few personally, not something I go asking other brokers.
      If the broker gets you a pre-approval (fully assessed) and you go with another broker or direct to a lender you should pay them for their service.

      My opinion is you shouldn't apply for credit if you don't intend to use it.

      • Keen Bargain Hunter on 23/10/2018 - 19:35
        -5

        I disagree with your statement. I am of the impression that mortgage brokers get paid upon completion of signed applications from the financial institute not on behalf of the customer. Whats wrong with finding the best competitive rate? Who says that they've negotiated their best if someone is able to get a lower rate? Just my opinion

        • mortgagebroker on 23/10/2018 - 22:28
          +2

          If I do a loan for you all approved and you go somewhere else, the broker doesn't get paid. A broker could 40+ hours working with you and get nothing for their time.

          It is not all about rate. If the structure is wrong it will cost you in the future.
          I'm all for the customer shopping around, but if you've spent a lot of time working with a broker on a loan and find a cheaper rate, inform the broker and they can either try and get it for you or educate you on why it's not a good fit.

  • matt_will_fix_it on 22/10/2018 - 22:34

    How is the crackdown on financing impacting you?

    E.g. I've heard of banks needing much greater documentation requirements and people who could previously get a loan now been denied. How much of that are you seeing?

    • mortgagebroker on 22/10/2018 - 22:47
      +9

      A lot.

      Banks need more documentation now. Completely review your living expenses.

      The main issue I am seeing is people who got a loan easy a few years back now have a bad experience because they believe they can just supply a payslip and get approved and can get defensive when I start asking more questions or questioning their excessive sportsbet, dan murphy and afterpay transactions lol

      • spiff on 23/10/2018 - 12:06

        How far back does the bank review living expenses? Does the customer have to provide bank statements for each bank account and credit card they have?

        • mortgagebroker on 23/10/2018 - 14:24
          +1

          Depends on the loan on what documentation is required.

          If you are consolidating debt you are required to provide 3-6 months statements.
          if refinancing, 6 months of existing home loan statements.
          3-6 months bank statements for other reasons.

  • tryingtohelp on 22/10/2018 - 22:58
    +2

    Not sure if it is a good advice, but have you tried renting out a room or 2.It's a bit of compromise on lifestyle, but still better than $100k loss.

    • Riczter on 22/10/2018 - 23:38
      +2

      I'm guessing this was in reply to my post, Yes mum has brought up this idea herself, but has concerns with a child in the house. Appreciate the suggestion :)

      • HighAndDry on 23/10/2018 - 10:05
        +1

        Don't know why you're being negged - your parents' bad decisions aren't your fault. But, god so many bad decisions.

        My very lay-person (but with some insight into the market) is that property isn't going to rebound soon, and especially in areas where a lot of vacant land + owner builds happened, almost certainly won't rebound anytime soon. Your parents' thinking is classic sunk cost fallacy. Imo, they should cut their losses and get out.

      • tryingtohelp on 23/10/2018 - 20:00

        Yup, it was the reply to your post, look for flatmates with premium account.
        Put the price a bit down and your tenant preferences, i would trust people from overseas only due to the fact that they are cautious and always try to stay away from trouble, overseas students etc

  • vince088 on 22/10/2018 - 23:22

    refinanced with ING 12 months ago, recently gone up to 3.89%, stay or hunt for new one?
    ps. i'm not struggling and i love saving money

    • mortgagebroker on 22/10/2018 - 23:55

      Is still a great rate.

      Look at INGs website and find your products with the same LVR and loan size as you, is it a better rate? If yes, call up and ask for a reduction in rate as you only refinanced 12 months ago.

      If you are above 80%, banks are not stupid and know it is not viable for you to move.

      PM me if you want more personalised recommendation.

      • dannyboi on 24/10/2018 - 09:40

        Are offset/savings accounts taken into consideration differently to additional repayments when refinancing?

        My loan has been at 80% LVR with P&I but I have an ever increasing offset. Would I need to pay down the loan prior to refinancing?

        • mortgagebroker on 24/10/2018 - 17:12

          You would not need to pay down the loan before refinancing.

  • johndowy on 22/10/2018 - 23:36

    Hello,

    I have a block of land worth $500k fully paid.

    I want to get a construction loan of $500k to build on it bringing my total investment to $1m. Valuation at completion is estimated at $1.2m with weekly rental of $800, LVR 41%.

    Now, my income is very low, $40k per annum after tax. I am planning on renting out the house after completion.

    Question:
    - Will the bank look at my income to borrow the $500k construction loan? (The weekly rental of $800 per week should actually cover the repayments)
    - If I had zero income could I still borrow $500k given the estimated weekly rental and low LVR?

    • mortgagebroker on 23/10/2018 - 00:20
      +1

      Will need more information.
      But yes, this may work.

      Banks will look at your income.
      No, you wouldn't be able to borrow 500k with only rental income.

      PM me if you want a more personalised recommendation

    • drprox on 23/10/2018 - 21:01

      Not even close mate, living expenses alone would eat up your after tax income and $800/week doesn't go close to servicing $500k

  • jleno on 23/10/2018 - 01:09
    +6

    Based on what you see:
    - do most people "investing" in property have no idea what they're doing?
    - are most people living paycheck to paycheck through frivolous spending (even those on high incomes)?
    - do you think we are going to see increasing mortgage defaults in the next couple of years?

    • mortgagebroker on 23/10/2018 - 01:51
      +8

      • do most people "investing" in property have no idea what they're doing?
        Most people will have some advice from a financial planner. You sometimes see "mum&dad" investors buying in a new development and valuations come in low and still have no equity 5 years later. I try and educate and suggest financial advice before making a purchase.

      • are most people living paycheck to paycheck through frivolous spending (even those on high incomes)?
        Far more than I thought before I started brokering.

      • do you think we are going to see increasing mortgage defaults in the next couple of years?
        Yes. We are already seeing issues with people coming off Interest Only loans who now can't afford P&I repayments and cant get approved for the same Interest Only loan today.

      It's becoming more about "loans I can be approved for" than "give me the best rate"

      • miwahni on 23/10/2018 - 22:34
        +1

        • You sometimes see "mum&dad" investors buying in a new development and valuations come in low and still have no equity 5 years later.

        • to wit - Upper Coomera, Pimpama, Yarrabilba and now heading the same way in a couple other locations… in addition to resale values being lower than PP, there's a huge vacancy factor for rents with stiff competition for tenants as a result. Possibly these places will boom over the next 10 - 15yrs as the Gold Coast spreads upwards and Greater Brisbane spreads south, but at present a lot of these investment purchasers would have a problem if they tried to refinance or even sell right now.

        A lot of these were marketed to interstate "mum&dad" investors, especially from Sydney and Melbourne where high prices made it difficult to get into the local investment market. They see a land and construction package for $425000 for a brand new house and think wow, I'm in. Then the valuation comes in low - inflated land price, or simple lack of comparables in a recently released estate, and build costs with over inflated cost per sqm - but they still go ahead with the purchase (which IMO is NUTS! WHY would you still buy something for $425k if it's valued at $410k? Or lower? How much higher does the market need to go before you'd even recoup purchase price, let alone costs?). And the valauation report is covered with warnings that there is a premium paid for new product, and resale after new may not even achieve the current assessed value… someone has taken these people for a ride….

  • Flanders on 23/10/2018 - 02:12

    Do you mostly do mortgage 'brokering' for persons or properties which the major banks won't lend to ?
    1 of my siblings was doing mortgage brokering, and explained to me how the big banks refused viable loans, just because they were properties under xxx amount of cubic metres in size.
    Is there some good reason banks don't like to lend for small units, or it just something they do which makes no real sense.

    • mortgagebroker on 23/10/2018 - 12:03
      +2

      Most banks policy is to not lend for units under 40-50sqm.
      Policy for some lenders will be different so its my job to find the lender that will do it.

      Lender 1 wont do studio apparments at all
      Lender 2 might be 40sqm but must have car space and balcony
      Lender 3 will only lender 80% at 40sqm

      Once you go under 40sqm it gets hard.

      • niknah on 23/10/2018 - 18:20

        If you had 2 x small apartments, would they add it up? Or they don't like small places at all?

    • miwahni on 23/10/2018 - 22:13
      +2

      To answer your last sentence - there is a reason. Bank's recourse in the event of borrower default is to sell the security property so they want something that will appeal to the widest possible pool of purchasers so it can be sold reasonably quickly. They don't like to lend against security that could be difficult to sell if needed, or property that appeals to a particular niche.

      Units under 40sqm fall into that basket; there's not a huge market for them, although with the numbers being built that could change in time. At present they tend to be lumped in the "unacceptable security" basket along with properties located on gravel roads, display homes in display villages, properties located within 50 metres of high voltage transmission lines, student accommodation, over 50s retirement villages etc etc etc. Or you could find that the bank will accept the security but only at a particular maximum LVR eg high rise in high density postcode with an 80% LVR cap. But as OP notes, different banks have different policies and a good broker should be on top of this.

  • McBanny on 23/10/2018 - 02:29

    Thanks for AMA,
    Would love to get some advice from you.

    I'm living with my parents and helping them to pay the loan off as they both had stopped working (used to run a small business).

    My mom is now a full time house wife and my dad goes to weekend markets to sell veggies he plant at the backyard.

    With the property under both of my parents' name, is there anyway to refinance it? Given their combined income is lower than 15k/yr and about 20k left in the bank.

    Ps. My parents are not centrelink recipient.

    Thanks.

    • HighAndDry on 23/10/2018 - 10:08

      Not OP, not a mortgage broker, but… Refinance with basically no income? Not without someone else as guarantor at the very least, and I would strongly advise against doing that.

    • mortgagebroker on 23/10/2018 - 12:07

      Would need more information.

      My first question is why refinance a 20k loan?

      If they are not on Centrelink, guessing they are living off savings or super, pay out the loan.

      They will not get a mortgage with absolutely no income.

      • McBanny on 24/10/2018 - 02:21

        Thanks for the reply ~

        They purchase the house 10 years ago with mortgage while the business was doing well (for the same reason they can't get centerlink because they borrowed 400k from the relatives to start the business here in Australia and the accessor assume they have 400k savings somewhere and they are hiding it after they return all these money).

        My dad showed me the bank statement the other day and the interest rate is at 4.75% with ANZ so that's why I want to check if there's any chance they can refinance the home loan.

        They are basically living off their savings in the past couple years since they closed the business.

        Suppose I can purchase the house off them but there are stamp duty and additional cost included and I don't have enough savings for deposit (market value of the house is around 600k, the loan had 170k left to be paid).

        • mortgagebroker on 24/10/2018 - 17:19
          +2

          Sorry, I miss read your first comment, thought the loan was 20k.

          Depends on your situation (income, assests, liabilities) but your parents can gift you the equity in the house, so will only need min 5% of the 170k.
          Obviously, this will affect their pension also as you can't just give away money.

          I think all 3 of you should visit a financial planner. If you are an only child and going to inherit the property anyway there may be other options. Go get professional advice.

          • McBanny on 24/10/2018 - 22:28

            @mortgagebroker: Thanks for the advise.

            My other options was to have some kind of documents to show I pay the rent to my parents which can form part of their income. So the instead of transfer the weekly payment for loan, it becomes a rent.

            Would you think this is a good idea? Or this is something to discuss with the financial planner?

            • mortgagebroker on 25/10/2018 - 12:40
              +2

              @McBanny: I think you will struggle.
              You will most likely need a rental agreement.
              Parents will need to declare the income also.

              I suggest you see a financial planner. Your parents will need their own advice on their situation also.

  • boxhunter91 on 23/10/2018 - 07:37

    Hello thanks for your AMA.
    I recently got my first home loan with one of the Big 4 as they and BOQ were the only ones who would look at me with 1 year financials as a contractor in the health industry.
    Following discussion with my broker we were happy with what was offered.
    Do you suggest I revisit my loan in a years time and see if I should refinance or better to stick with the Big 4?
    Long term I am looking to purchase another property in a couple years time so not sure if its best to stay with the same bank or take it elsewhere.
    Thanks again.

    • mortgagebroker on 23/10/2018 - 12:10

      No issue here, do as you please. If you can save money do it.
      It might be an idea to wait till you purchase this new property as you could pull equity from current house to purchase new house.
      You don't want to be applying for 3 home loans in 3 years.

  • activ8newbs on 23/10/2018 - 07:52

    Hi OP,

    Are you self employed, or are you working for a company?

    Also, what platform do you use? Mercury/connective?

    I'm also a fully accredited mortgage broker with many years experience in the industry working in many different facets: RE, Banking, Prof Services and Brokering. I'm considering starting my own practice from home as a part time/secondary income. Do you have any advice or suggestions?

    If you're self employed, I'd love if we could take this chat offline!

    Thanks!

    • mortgagebroker on 23/10/2018 - 12:14

      Self-employed - work from home.
      I think it's a smart idea to start part-time, see many people come into the industry for 12 months and disappear.

      Send me a message and happy to have a chat offline.

  • visca on 23/10/2018 - 08:04

    Any thoughts on going with different lenders on different properties, any benefits /difficulties. Tks

    • mortgagebroker on 23/10/2018 - 12:20

      I suggest it to protect yourself.

      There are some benefits to cross securitisation (buying property at 100%) but with the way the market is at the moment with declining values you are better off have each property with a different lender.

      Search all moneys clause and have a read.

      • visca on 24/10/2018 - 08:26

        Tks

  • ajwhi on 23/10/2018 - 09:07

    Hi there,

    First of all, thanks for making this post and sharing your time with the community.

    This year I have purchased a house and got married. We currently have our home loan with Bank of Melbourne and have around $500k left to pay.
    What advice would you offer for a young couple in their first few years of having a home loan?

    Any advice would be greatly appreciated!

    • pantsparty on 23/10/2018 - 09:30
      +6

      Do whatever you can to make additional repayments on your loan - try and cut costs in other areas of your life to help with this - e.g don't go on any big holidays for a few years. At the start of your loan the majority of each payment you make is going to interest which means your principal is going down very slowly. Additional repayments help speed up this process and get you more equity in your loan which will help later on in life if you want to refinance or if your income goes down.

    • mortgagebroker on 23/10/2018 - 12:39
      +1

      @pantsparty is 100% correct

      Pay as much as you can.
      If you have credit card debt or personal loans at a higher interest rate pay them off as soon as you can and then funnel all extra money into the home loan.

      Look to your future also, if you are planning to have children make sure you have more than enough buffer to get through maternity/paternity leave and any life changes up ahead.

  • Chipster on 23/10/2018 - 09:26

    What kind of educations do you have to go through to become a mortgage broker? Do you have to work under licensed professional before opening your own?

    • mortgagebroker on 23/10/2018 - 12:43
      +1

      You need a diploma in mortgage brokering and do 2 years under an accredited mentor.

  • Seraphin7 on 23/10/2018 - 09:35

    What can you tell me about bridging loans?

    I'm currently looking to purchase a new home, but do not want to sell my current home until I've purchased (and moved into) the new one. The current home is fully paid off.

    Broadly speaking, the LVR on the new property at the start of the loan would be ~60%. After the sale of the existing property, with proceeds going to the new loan, the LVR would drop to ~25%.

    The trouble I'm having is that lenders in this scenario effectively do not recognise the value of the existing property in their calculations. The effect of this is that I'm struggling to get them to lend me the amount I require on the new property my income won't support the "full" loan amount. The fact that I'm intending on paying off a big chunk of the loan within say six months is just ignored.

    Have you come across this situation and have you any advice on how it could be handled?

    • mortgagebroker on 23/10/2018 - 12:50

      Most lenders service on the end debt.
      With the information you have given me I don't see an issue.

      You might be better off refinancing the current property and pull the money out for the purchase. Move in and then sell your existing property and clear the debt.

      Go see a local mortgage broker or contact me.

      • Seraphin7 on 23/10/2018 - 16:35

        Hmmm … the broker I spoke to (and the banks I spoke to directly) all seemed to give me the steer that serviceability was based on "peak debt". This was about a year ago. Has something changed over the last year?

        • mortgagebroker on 23/10/2018 - 16:39

          CBA is peak debt. most others are end debt.
          Check with westpac/stgeorge or heritage.

          Or contact your mortgage broker :)

  • morebunnings on 23/10/2018 - 09:43

    Hi mate!

    I'm just coming off a 3 year fixed term in 34 days time. (Bankwest, 3.95%). My questions are:

    1.
    What term would you recommend fixing for again? I'd like to go 3 years again, with $30k floating because I know I will/can pay that much more off over 3 years. Any reason you'd choose 1 year fixed over 3?

    2.
    I was in contact with an online place (click-loans) who tried to get me to switch to them and break my 3 year fixed a couple months early, and said there are no fees. My mortgage broker however (I didn't tell him about the online place, just called asking for advice) said don't do anything yet, wait until 2 weeks before the end of my current mortgage, and doing anything now would cost me a lot in fees. Is 2 weeks enough time? I thought I should at least be looking around for a month or so. Do you think the online place is dodgy for saying there would not be a break fee?

    Thanks mate. I wish organizing this wasn't making me as nervous as I am.

    • mortgagebroker on 23/10/2018 - 12:57
      1. At the moment I really leave it up to the customer to decide.
        Variable rates are cheaper at the moment.
        If you want certainty got 3 years, if you want a better rate go 1.
        If you want the hedge your bets you can do 50% variable and 50% fixed for 3 years.

      2You need to call Bankwest and ask for a break fee. That is the only way to find out.
      ClickLoans would be doing a lot of volumes and would be assuming that there would be no break fees.
      With a 3.95 fixed rate with a month to go, I would also assume there would be no break fee.

      I'm in QLD so if you're after someone to look after you send me a message. No need to be nervous, that's what your broker is here for.

  • TheMindsetTraveller on 23/10/2018 - 10:14

    We hear/read a lot of negativity about the housing market and how prices are dropping, obviously there are several reasons (prices too high, investors are withdrawing demand, tighter lending restrictions etc). From your angle which you can answer I suppose, what is happening on the lending side e.g are lenders becoming more strict? scrutinizing applications further? is there an increase in time to get unconditional approvals? do you see any changes in what banks are lending like are they approving less than before (for the same financial details). Also, it would help where you are based as the demand for lending might be impacted as well.

    • mortgagebroker on 23/10/2018 - 13:04
      +1

      Lenders are becoming more strict. You have to provide more information now.
      Banks will question everything on your bank statements and credit report.

      Time to get unconditional may be an issue for some lenders.
      Exmaple: a lender was taking 24 days to assess a file recently, if you have a 14 day finance clause we are not applying with that lender.

      If you live beyond your means you won't get a loan.

    • Gelato on 23/10/2018 - 20:46

      From the bank's perspective, the risk appetite for home loans are dropping, and in particular investment loans. Market reactions are one of the factors, and APRA is another one (i.e. more rules for banks to follow under the APRA's watch). Increased in time to get approvals are likely, driven by the layers of process within the bank.

      disclaimer: i work at one of those banks

      • Adii on 24/10/2018 - 22:05

        Work for a major bank as a lending specialist and even though lending criteria is getting tighter but we strive to get the unconditional approval to the customer within 3-5 days. I agree that there is a decline in the property market overall but there is a growth in some areas as well we are still receiving 10 to 15% increase in the growth corridors (Melbourne)

  • jl1007 on 23/10/2018 - 10:14

    Hi OP, thanks for doing this AMA!

    1. How do you know / What's the indication if the interest rates are going up / down? I always thought that RBA rate change is what you need to pay attention to, but there was one time when RBA rate stayed and big four banks increased their rates.

    2. Is fixed rates actually worth it?

    3. If comparison rate is true cost of a loan, why do banks always have two rates, not just show the comparison rate? Is this for marketing purposes only?

    4. Is applying a home loan (for investment properties) as a trust much more complex than a individual? Any rate differences?

    Thank in advance!

    • mortgagebroker on 23/10/2018 - 13:10

      1. listen to the economists on the news.
        Look to see what the fixed rates are doing.
        If the 3 year is cheaper than the one and 2-year I'm guessing over the next 3 years rates will go down.

      2. Don't try and beat the system. pick fixed rates for certainty

      3. Comparison rate is based on a 25year term and 150k loan. You need to calculate your own comparison rate. We must display comparison rates in marketing, its law.

      4. It can be more complex, depends on the setup of the trust. no rate difference.

    • mohan76 on 23/10/2018 - 14:20

      now we are globalised, need to keep aye on other central banks specially US , EU & Japan

    • Gelato on 23/10/2018 - 20:36
      +1
      1. Main factor this year is due to the increased cost for banks to get funding to lend to customers. US bond yields has been rising in recent months means the cost to borrow from US borrowers are higher (where majority of funds are from…), and given AUD is going down means it costs AU banks more AUD to borrow the same amount of money. Hence, banks are passing the cost to customers. Those banks who don't increase the interest rate are likely to absorb the increased cost from their profit.
  • tik tok on 23/10/2018 - 10:26

    How wide spread are fake loan applications ? Applicants providing fudged documents to get a loan ?

    • mortgagebroker on 23/10/2018 - 13:15
      +3

      I don't see it that often.
      You hear of customers applying for one loan, getting declined, then applying elsewhere with something like 1 less child, or as a single applicant instead of married.

      It's an issue when customer withholds information from you. Non-disclosure is pretty much an instant decline now.

      • tik tok on 23/10/2018 - 14:25

        You don't mention where you are from. An Asian mate of mine knows more than a few dozen people first hand who have got loans from banks based on fraudulent applications. The banks won't confirm this as this shows their stupidity the MB doesn't accept this as that shows the MBs stupidity. This is in Melbourne though.

        • mortgagebroker on 23/10/2018 - 14:27

          It doesn't surprise me. It was more common 10+ years ago.

  • JTTheMan on 23/10/2018 - 10:53

    Do you have any advice on keeping extra savings in a redraw account?
    I was putting all of my income into my loan and redrawing to pay bills but I have been scared off doing this now after reading an article in SMH a couple of months ago warning that the bank can freeze redraws and this is a likely move by the end of this year?

    Here's a link to the SMH story https://www.smh.com.au/money/borrowing/if-you-have-extra-mon…

    • mortgagebroker on 23/10/2018 - 13:19

      If you are concerned only put money in your redraw you are willing to lose access to. I personally don't think it is an issue, and my savings go into my redraw.
      When CBA made a change recently they gave a lot of warning to their customers so you had time to move your funds.

      see https://www.commbank.com.au/banking/changes-to-loan-repaymen… changes to redraw.

      • JTTheMan on 24/10/2018 - 11:23

        Thanks for your reply.
        I guess I'll play it safe and just keeping my savings in my savings account.
        I don't trust banks enough to risk it in redraw!

        It's still very incoherent in that CBA warning when they say it varies from customer to customer so basically it's too difficult to know for sure how much you can safely add to redraw.

  • Haha Hihi Hoho on 23/10/2018 - 12:15

    how is the situation now with overseas buyer? Mom bought a property back in 2011 and thinking to sell and buy another one. I heard lots of news about them clamping down on non PR/Citizen buyers.

    • mortgagebroker on 23/10/2018 - 13:23
      +1

      Non-resident buyers have nearly no options.
      Get advice before she sells. She may be to keep the loan she has but change securities. Ask your bank/broker about "substitution of security" to see if they offer it.

    • tik tok on 23/10/2018 - 14:17
      +1

      and if she is an absentee (tax wise) then depending on the state, she'd be liable to pay a fair amount on land taxes as well as no CGT exemptions. Of course, this is just cursory - get relevant advice.

    • Gelato on 23/10/2018 - 20:57
      +1

      Have to be very careful in terms of :
      1. Tax subject to the return of sale from her existing property
      2. Getting a new loan to buy a new property (foreigner income will be discounted at around 40%)

      Not sure which state did she buy, if its VIC/NSW, the return to sell now would be good (but not great) if property was purchased in 2011. Property prices are dropping and anticipated to drop more next year. I'd say if she's not in a rush to cash out / buy another property, then don't sell within these 12-18 months.

  • kaleidoscope on 23/10/2018 - 12:39

    Couple of questions.

    1. Who is a platinum broker? Any advantage of going with a platinum broker vs other broker?

    2. What is the advantage of going with broker when you hear banks say to your face, Without broker we (the bank) dont have to pay commission, and it saves money

    3. I’ve heard some experienced fellows of mine in industry (i.e. people who build houses for investments etc …) say that we are just a number to a broker (number is the potential commission from successful application). Higher the number better the service… is that true in general?

    • mortgagebroker on 23/10/2018 - 13:33
      1. I'm guessing you're talking about levels that lenders give their brokers.

      Some lenders give broker who do a lot of business with that lender quicker service. It is only with that lender though.
      You need to watch out though as 1 broker might fo 15mil a year with CBA and 1 mil with 5 other lenders. Do you think you will be getting the best product from this broker?

      Otherwise it just a random name for marketing purposes.

      1. I'm guessing you are hearing this from uneducated mobile lenders or bank staff. If a bank employee says this to a customer I have referred them I will complain and they will get in trouble as it is not the case.
        I personally think brokers would be cheaper after you take away retail costs and staff costs the banks pay.
        It doesn't save the customer money.

      2. I don't think so but I'm sure there are brokers that are like this. Find a good broker.

      • kaleidoscope on 23/10/2018 - 13:52

        Thanks for your reply. Cheers!

        Interesting about #2. I actually heard this from both cba and westpac during individual apointments.

        • mortgagebroker on 23/10/2018 - 14:30

          Some bank branches hate brokers and other love brokers.
          Some bank employees think we are competition yet we are giving them business.

  • barney on 23/10/2018 - 13:01

    I want to refinance but my wife is on maternity leave (still receiving payments) and has been since April this year. My current salary now is probably just a shade under what we were collectively earning when we first sourced this loan. What are the chances that I will be able to refinance? Should I even bother looking into it?

    • mortgagebroker on 23/10/2018 - 13:35

      Chances are high.
      You may be required to get a letter from her employer regarding mat leave.
      You may even service without her income at all if you have had a large increase.

  • FadeToBlack on 23/10/2018 - 13:04
    +1

    Do you work with uBank? I originally used a mortgage broker who didn't work with uBank even though they had a lower rate for a similiar loan product that I ended up with. In the end I refinanced to uBank after a couple of years but wondering if this is common.

    Also my rate with uBank is 3.59% and i've been happy with the loan and redraw, however I don't really see people mention them that much even though the rate seems very cheap. Is there some disadvantages I am unaware of?

    • mortgagebroker on 23/10/2018 - 13:38
      +1

      uBank does not work with any brokers. It is an online lender.
      I can offer a product from the same funder as uBank for 3.69%

      Awesome rate. If you know what you are doing and have a simple application (PAYG, under 80%) go ubank.

      • greater mimic on 23/10/2018 - 18:28

        UBank had a $1000 cash back a few months ago, I was going to refinance with them but couldn't because my partner was only a few months into a new job and therefore didn't qualify. Do you have any knowledge of when this could happen again?

        I'm with ME bank on a 3.69% rate so I'm pretty happy with that, it's just the $400 annual fee that sucks and I wouldn't mind changing to UBank just to avoid that in the future.

        • mortgagebroker on 23/10/2018 - 22:34

          No idea when it will happen again. 3.69% is an awesome rate. Hope it's not a small loan as the $400 fee will eat into your savings.

          • greater mimic on 24/10/2018 - 00:55

            @mortgagebroker: Bought our home this year and about 520k owing so still fairly sizable. Our annual fee is due around next May so we'll probably change to UBank just before then regardless, at least some of the refinancing costs are netted against the money we keep by not needing to pay the ME Bank annual fee

            • mortgagebroker on 24/10/2018 - 17:24

              @greater mimic: you will save 0.1% of your loan amount per year (so $520) changing to ubank from ME.

              Once you add up the discharge costs and any other costs. It will take around 2 years to get in front.
              Contact ME bank and see if you can do change products/remove fee and keep the same rate before refinancing to uBank.

  • Lovemeabargain on 23/10/2018 - 13:09

    Great topic, thanks for taking the time to answer all these questions!

    I bought a property about 6 years ago, with a loan of $450k and it's been interest only since, but with an offset account incase I want to turn it into an investment property.

    The property would be worth approx $950k now, and I'm paying an interest rate of 4.31% (the interest only is obviously resulting in a bit of a premium)

    What would you say a decent rate is for the above? Are you still able to get interest only?

    Thanks!

    • mortgagebroker on 23/10/2018 - 13:44
      +1

      You are still able to get interest only.
      Owner Occupied Interest only is becoming rarer these days.

      4.31 is a very good rate. I only have one lender below 4.2.

  • tighttighttight1 on 23/10/2018 - 13:14

    Asking for a friend…
    Is it legal for my friend who has an investment property to obtain an owner's occupied interest rate?

    • mortgagebroker on 23/10/2018 - 13:46
      +2

      If you bought it as an Owner Occupied property and moved out, I guess it is up to you if you want to inform the bank.

      • tighttighttight1 on 23/10/2018 - 21:20

        He actually purchased it as an investment property. Never lived in the property.

        He received owner's occupied rate previously, however, upon refinancing, the initial bank would not offer him owner's occupied rates anymore. So he looked elsewhere, which was one of the big banks.
        The mortgage broker at the big bank stated that it wasn't a problem for him to offer my friend an owner's occupied rate as it is a "fine grey area". He obviously accepted and there has been no issues.

        Upon doing my own research on different forums, people are saying that this can't happen and if you did somehow get an owner's occupied rate on an investment property, there would have to be some level of deceit on the home owners behalf. This could involve contacting Australia Post to forward mail to your actual dwelling, living in the property initially then moving out without informing the bank etc.

        • mortgagebroker on 25/10/2018 - 12:44
          +1

          Dodgy lender at the bank.
          Fraud is not cool.

    • tagin on 25/10/2018 - 16:47

      It's not illegal, just possibly a little immoral because it's up to the bank to verify if it's an investment or not. There aren't any laws being broken.

  • whoopdeedoo on 23/10/2018 - 13:23

    How much do you submit and settle of average a month?

  • 0FoxGiven on 23/10/2018 - 13:35

    Please let me know if I can get a significantly better deal than the one i'm currently getting:

    Looking to secure a construction loan for a new build on land that is soon to title. Total land and construction cost will come up to about 520k. I have 250k in savings. Looking to secure about 350k loan (the extra money will be used for post-contruction work like driveway, solar panels, etc). My broker got me pre-approved for the ANZ Simplicity home loan at a variable rate of 3.81% with no annual fees and $1000 worth of conveyancing charges paid by the bank. I know there were slightly cheaper rates out there in the market but I wanted a bank that had a good online platform and was of some repute as this is my first time taking out a loan of any sort.

    Reckon I could get something much better?

    • mortgagebroker on 23/10/2018 - 13:57
      +2

      Seems good to me.

      3.69 from a smaller lender
      3.79 from 2nd tier bank
      3.81 from big bank

      • miwahni on 23/10/2018 - 22:17

        They're really good rates for construction.

  • Ughhh on 23/10/2018 - 13:43

    Which big and small lenders are notorious for initially having low interest rate to. Lure you, but then increase the rate throughout the year?

    • mortgagebroker on 23/10/2018 - 13:59

      All banks offer new customers better rates. Its the way funding works.

  • Lockdude on 23/10/2018 - 13:49
    +1

    Hi, me and my partner are currently savings towards our first home deposit. I'm keen to get out of the renting game as soon as possible, so definitely looking at a loan where the LVR would be higher than 80%. Looking in the $500-650k range. Have you got any advice in terms of what sort of deposit we should be saving, and what sort of rates we can best expect if our LVR is 95%? In general I'm struggling to work out how to best get into the game. I'm also on the assumption that once I'm putting rent money towards my own equity instead of someone else's that'll be a better place to be.

    • mortgagebroker on 23/10/2018 - 14:05
      +1

      You will need 5% genuine savings.
      Extra for costs (solicitor, stamp duty)
      I say 8% normally.

      You will get a rate under 4%

      You may be able to get a gift from a parent to get in sooner. Or get your parents to use the equity in their house to help you out.

      You can speak to a mortgage broker now and they will let you know what you need to do and get you "purchase ready" for the months ahead.

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