Forum Replies Created
Richard – what sort of package?
What do you get in what professions?
I know I have a love affair with the majors but CBA, ANZ and NAB will all beat that rate. I’d pass on the AMP option – their ability to look after you in the future is limited because they don’t offer all the options / flexibility a major does.
How much is the loan and why not go with a major?
BankWest regularly have problems…
I don’t know the specific product details however it is a marketing trick.
MH don’t want 100s of these. It’s like any retail business – they market a “golden apple” to attract attention.
Like many high LVR products the LMI will be through the roof. This voids the additional funds.
For example – let’s say you have a bank loan at 95% plus LMI. Total 97%. I can guarantee you MH LMI will be more expensive on the LMI side e.g. 99% less LMI say 96%.
Often these products only get you an extra 1% net.
Your better to slap it on a credit card and pay it over the months.
Putting 3-4k on a credit card for 12 months is cheaper than paying the same amount in edtea LMI.
Unless i’ve misunderstood and they lend 99% plus LMI.
Still nothing new. CBA is an example. Westpac do them on a case ny case. So do NAB.
If you don’t have a connection with a major e.g. No cards etc :- you are a minority.
If you are a minority there are already lenders filling this gap.
95% with ad bank is not opening any market not already open – just another bank in an existing space – subject to the mortgage insurers – tight as a mouse in panties.
All up it’s good but it will take losening buy the majors to make a difference.
This is an Abbott style – shandy with 70% lemonade and 30% light beer…
Yeah but these deals are getting written every day of the week with CBA – – all you need is to have had a CBA credit card for more than 6 months to be an CBA ” existing lending client”. Other banks are also doing similar for existing clients…
Difference is CBA you don’t need LMI to approve the deal…
I don’t think this will open up any markets – it’s nothing new!
Bit vague.
go for it…
The problem is far bigger than population; it is the way a capitalist economy operates.
We need growth. Without growth we go broke.
Problems is; if we reach 50M we will need to continue to grow to support our economy. So then we go for 100M. At 100M we still need to grow to support our economy; so we aim for 150M. So on and so on…
We can slow it but we can’t stop it. The only difference is how long we take before we hit self inflicted ruin (stable or retracting population).
Let’s look at the sad reality;
Infinite growth is impossible!
Without infinate growth our economy will collapse…I don’t have time to save to save the world today – I’m off to the pub!
P.S. I challenge you to draw a circle – any size. Them draw a circle inside that circle and keep repeating the process.
If eventually you can’t draw any more circles it’s fair to assume we will eventually have a world wide collapse (not just a little GFC). Otherwise a 3rd world war.
Regardless of your views. Please don’t vote for the Ranga…
Keep in mind many non-banks have a strict rule in terms on manditory surplus in their calculators. Majors are also heading towards this however I’ve just arranged an approval with a shortfall of $600 per month.
Dont discount the power of a good relationship with your bank…
casanovawa wrote:I have heard a few people on this forum say they get a discount interest rate…I am hopefully about to get my loan to build my house and land package but after about 6 months plan to switch to probably ANZ as (at least at this moment) the lender offering the loan charges no penalty to switch the loan to someone else…
I have banked with ANZ for over a decade, built one house and paid it off with them etc, etc… The current loan will be over $300k, so if in 6 months time i am still able to switch the loan over to ANZ without penalty, should i be asking for some sort of discounted rate from what they advertise??? or do i have to be doing multiple loans with them to qualify for any discount???
Which lender are you talking about?
Make sure if they say nil switching fee they are not referring to say; changing from fixed to variable with them…I dont know of any lenders that let you go within 6 months for free. At a minimum will have disharge fee for release of title plus titles office fees to remove and replace the mortgage on title.
Ps. People talk about rate discounts however the pricing is standard – the major 4 all have standard discounts up to 0.7% depending on loan amounts. A lot of non banks claim to be cheaper but this often only applies before the banks give standard discounts.
Banker
Great point V8ghia,
The reason agents dont take offers is because of the reason I’ve listed in my original post.
The agent however has no choice – if you make an offer – they MUST, BY LAW, amend the quoted range to start not less than any formal offer received. They can not claim to have not received your offer; only discourage you from putting your offer in writing.
In your case. If you made an offer in writing. They would have had to increase th marketing. Regardless if they wanted to receive the offer or not.
Banker
Or if the management company goes broke…
Personally I would say to work for a broker firm in a customer service or loan processing role for 12 months first. The pay will be crap but if you go out as a broker a year later you will find it far easier with a few contacts and experience up your sleeve.
In terms of jumping strait in. You will need cert IV, professional Indemnity Insurance, an aggregator and a few bank accreditations. without two years lending you will might have some extra training to complete first.
Look up Hans Schmid on this site. He knows the way…
Good luck
Eoli,
Not having a dig a you personally but your a bit off on your facts.
Re no 1. You are now talking about honeymoon rates and fixed rates. All lenders have penelties here.
If we compare apples with apples:
early exit fees on a Variable rate loan of 500k (not fixed or honeymoon)
NAB $900 – within 4 years
CBA $700 – within 4 years
rate busters $10,000 within 5 yearsnote: NABs fees increase if you have an intro rate to 0.4% e.g. $2000 for a 500k loan. CBAs does not change.
If you fix a loan there are additional costs with all lenders (economic costs are in addition to Deferred establishment fees).
YES – your correct they offer honeymoon only to new clients but after this they default to the standard variable – like everyone else. Rate busters variable clients are not all based on one standard variable. Rate once your in can keep going up and up…
Both solicitors buggered up. They should be doing their own calculations.
Eoli,
Lets start with no 1 – rate busters…
Some reviews from the net… worth noting I was telling people they were dodgy well before the financial crisis. This behaviour is not only a GFC instigated thing:
(souce – productreview.com.au )
Pros: None
Cons: Once you got the loan, you were trapped and locked. The exit fee will be 1.2% of your loan amount. So if you have a 300K loan, the exit fee is 3,600 for the first 3 years, not to mention you have already paid a huge application fee.Overall: Very ugly product. No personal contact, higher interest rate even than the big 4! And they cheated their customer of keeping the rate 1% lower than the market. Disgusting.
Pros: offset account
Cons: Poor support, no face-to-face talk, slow response…
Overall: If you wanna be ripped off, go for it. I reckon they should re-brand to RateBastard. At first it seemed their interest rate is not high but for the last couple of years, they raised the rate not a little slower than the big four did. If that's acceptable, be careful of their hidden cost such as deferred establishment fee, etc. It would cost you an arm and leg if you discharge the loan in 5 years (eg, you want to change a house, sell it or switch to other banks). Say if you have a 400K loan, they will charge you 1.2% ie. $4800 for the exit fee, not to mention you would have already been ripped off $2640 (0.66%) of application fee upfront. Have you ever seen a loan with such high application fee? Yes, that's rate bastard.
Also – lets look a little closer at the product:
As per their website:
RATE: 6.43% effective for new business from 16/04/10 (what about the older clients???)
HOW TO APPLY: online or phone only
MAX LVR: 80%
VAL FEE: $220.00 (metro)
DOC PREP FEE: $275.00
SOLICITOR COSTS: $350.00
Early Repayment Fee: 2.0% within first 5 years e.g. 500,000 loan will attract a $10,000 penalty if you move in 5 years – even if they jack the rate like they do to all existing clients.My assessment – they are crooks… Why not go to NAB at 6.54%? NAB will even match the rate for a good deal!
The 0.1% difference equates to $300 per year on a 300k loan?
Is it really worth the risk?
How can you compare the advertised rate to the banks when their existing clients have had their rates put up to higher than the banks?What happens if you need more money in 4 years and they are not lending (well actually they are but through a nother lender). You still pay break costs even if you refinance back through rate busters.
If anyone is reading this and thinks for a second any of the lender in Eoli's list have any credibility; DONT GET A LOAN WITH THESE LENDERS – STICK TO A BANK!
DONT USE THESE LENDERS – they are all the same lenders. Just different "mortgage managers'.
eloi wrote:Banker you know that the only reason nonn banks stopped lending was because the wholesale lending stopped so they couldnt tap any money to finance and lend to customers and that the only reason the majors gave cheaper rates during the crisis was so they could get more of the market. In other words get them while they are down and then lift rates later once they are in.
This doesnt make sense. We all know banks have gone above the reserve. Now your saying they are keeping rates low to get marketshare? Even if they do start lifting rates again – at least it is transparent. Not regular increase to existing clients to make a profit while still offering new loans to hook people with low rates?
Sorry Elio but these buys are simply dodgy and not worth the 0.1%. The 0.1% is not even a real figure – you'll be cheaper for 6 months!
I'm all for competition but not blatent rip offs and dodgy preditors praying on the uneducated home loan seekers.
eloi wrote:why wouldnt the existing customers get the same as the new. all they have to do is refinance……Not so simple. Almost all non bank lenders that raise funds from securitisation have bumped up rates for existing clients far more than the major banks. The new customers get offered cheap rates but existing clients get large increases. It's a cycle that was already in place before the financial crisis and the clients only stay put due to high exit fees – in some cases 10 times that of the major banks (based on average loan of 350k – 2% exit fee = $7,000 – versus major bank $700). Some non banks have had exit fees as high as 3% of the original loan.
This post (link below) is another one from today. If you havnt seen one of these each week or two on this site you havnt been reading the posts for too long…
https://www.propertyinvesting.com/forums/getting-technical/finance/4333345
eloi wrote:Look ive looked over most the lenders rates and fees and i can see alot more non bank and credit unions offering better loans. most majors have higher rates and have some fees involved if u want all the spiks and speks that most non banks and credit unions offerGive some examples and websites. I would say your incorrect but happy to be proven wrong. Noting lets go with some reputable lenders and not no-brands know one has heard of…
eloi wrote:Come on banker your name says it all. You work for a bank so ofcourse your going to blow their trumpet.career banker yes. But not currently employed by a bank.
eloi wrote:Banker answer me this. If these non banks or credit unions are so bad then why did most of them get bought out by the majors during this GFC..Firstly because they went broke. But not just non-banks. St George and BankWest also got in to trouble.
One thing is certain. If you took a loan with GE, ING, Origin , RAMS, Challenger, firstmac or any of the hundreds of mortgage managers that got funds from these lenders under 'white label' products (that is funded by these lenders but under the manager brand (e.g. RESI) – your interest rates went far higher than the major banks above the reserve.
Im still not sure how these lenders are allowed to re-enter the market with cheap rates say from NAB Advantage while their existing clients are still getting burnt – such as the posts today re AMS Mortgage Services (funding by GE). Now AMS like other non bank lender are pumping money out the door from different wholesale funders while existing customers have been shafted…
Where is the accountability from these lenders?
At least with a major bank your rates are usually indexed to the standard variable e.g. 0.7% below the standard variable rate. Could you imagine the major banks having a different standard variable for new versus existing clients??
eloi wrote:Come on if it wasnt for the non banks and credit unions the banks would be charging over %10 with early fees of $10000 at least/ Its thanks to the non banks and credit unions that banks are starting to become more honest..Yes they are good for competition. But we need someone to keep the non-banks and the credit unions honest at the moment. How about issues such as the non-banks being against abolishment if exit fees. They are campaigning that they need these fees to compete with the banks???
Something you may not know:
Most banks have claw back for brokers commissions e,g, if the customer refinances within 12 – 18 months the brokers commission is clawed back.
Many non-bank have NIL claw back therefore the broker does not pay back commission if the loan is refinance. Instead the lender claws it back from the client by way of heavy DEF (deferred establishment fees).
How is it fair if the lender jacks there rate by 0.7% – the lender has handcuffed the client to the product, the broker maintains their commission and the customer gets screwed. GE were paying up to 1.5% upfront on these clients. The brokers that didn't rebate this back to their clients to get them out shoud be shot (in my opinion). Yet they are still lending to new clients and 'cheap' looking rates with the same dodgy rules and the same dodgy brokers / mortgage managers…
number 8 wrote:I would have to say that it is very simplistic to think that you can sell the fact that a company has a profit of $5.6billion and climbing at a rate of 20% p.a.(not the spin on $3billion), and I should feel comfortable that they are adding real value to the community.
I never realised that you didn't include shareholder dividends as clear profit…….. Oh thats right, it's a banker explaining, and selling us the fact that all the fees and charges to bump up profits, are in fact good for us. We should just sit back and agree. Why not take another $5.6 Billion and give that to the shareholders and we will not include that money (it's only dividends!)…. take another $1billion just for your defense.
Where on earth would we be without the major banks at the moment???
Look at CBA and the storm crisis. They tipped in over 500M to clients that lost money. BOQ the second biggest lender in this debacle tipped in NIL – match by the non banks. At least the banks can afford to pay for their mistakes.IF you were caught up in this mess you would rather be with CBA than any other lender. When rates went up above the reserve you were better off with the major 4 than any other lenders, if you needed to payout your loan early due to unforseen circumstances in the past couple of years you would have been better off with a major bank than any other lender (exit fees), if you were with GE or the old RAMS or any other non-bank and went back for additional funds; you would have been better of with a major bank than any other lender (how many non-banks stopped lending).
Number 8
Do you honestly think the banks should start giving up their profits???
Who will fill their space is Australia if they stop lending???Sorry but the non banks in Australia at the moment are crap. IF we want real competition the only option Australia has at the moment is for a heavy weight such as the government to step in and support some of the non banks with lending.
Non banks on their own backs are simply too risky for me. Just look at how many people they've already burnt…
Banker
You say they only stuffed up cause of the GFC.
Do you think clients takng products with these non banks should be warned of the additional risk or raising funds with a smaller lender that relies wholly on securitisation?
Not sure if you work in the industry but the talk of the regulators removing early exit fees is not targeted at the banks. Many of the non banks have said removal of their deferred establishment fees would destroy competition as they won’t be able to compete with the majors on rate… They rely on exit fees and penelties to compete with the banks.
P.s. If you go on to resi website even their cheapest rat is higher than NAB, ANZ or CBAs once they give the standard 0.7% discount. Resi says they have no fees but that doesn’t include legal fees, valuation fee etc – the majors don’t usually charge these…
Just checked mortgage house. There no cheaper than the majors either. In addition to that they should be one of the lenders I listed above. Shame the existing customers dont get the same price as the new… If the banks did this it would be all over the news; get them in then jack the rate – yet keep the low rate advertising for new clients. dodgy.
Ps didn’t mortgage house almost go broke and get bailed out by someone in the last 12 months?
Elol,
what have you been sniffing. Most credit unions and non banks dont match the banks on price.
There is a small handful of no brand lenders that will however you only need to read a few posts to see how many people have been burnt by this style of lending. E.g. Rams, wizard, Ge, ING and challanger to name a few.My burnt I mean; reserve increase of 0.25, banks going say 0.35 and GE 0.7% and more. RAMs still have clients paying over 8% on loans that were originally cheap but then boomed… Oh and let’s not forget after getting screwed the 10k plus exit fees for many clients even on variable.
You still can’t trust a non-bank. Not even they know where there getting their money from :- )
Let me clarify. CBA has total of $650b out the door across the board. Just watching Ralphy on TV…
Bit simplistic no 8.
CBA market cap – approx 80b
Divide by share price of approx $51.5 = 1.553b shares
Dividend paid to shareholders $1.70 per share or $2.64bSo let’s say they are left with 3b after paying dividends.
They employ over 38,000 people with about 64% of staff being women.
$3b works out to less than 1.0% of the money they have out the door.During the last couple of years CBA and Westpacs maket share for home loans has sky rocketed. They need to get more funds from overseas to fund the growth – or alternativly stop lending. Let’s all cross our fingers because if the second happens our house values would crash destroying the aust economy.
If the banks didn’t increase rates above the reserve. The reserve would have incresed rates futher (the banks simply did it for them).
I support the profits from the banks. The fact that CBA is lending more per month now than before the GFC is a far more valuable contribution to Australian households than people give them credit for.
Has anyone done the math to see where the banks would be if they hadn’t gone above the reserve???
Do you think they would still be lending if they were suffering from decliding profits ?There are 4 reasons we are enjoying the sun when other countries are under dark clouds. These 4 reasons are ANZ, CBA, WESTPAC and nab.
Go the Banks!
