There are a few things people don’t understand about a good banking relationship.

The reality is all bank staff at westpac, ANZ, CBA and NAB are getting the importance of being a customers main financial institution drilled in to them. As financial markets are tightening the banks are looking to gain more revenue from each client ( without the need of throwing more money out the door). To the extreme of this is the business banking sector where Westpac and NAB will happily decline a deal if they don’t have the customers main trading accounts. Lending to a client with no other products is often now referred to as a dry lend. Banks are trying as hard as possible to move away from dry lending…

A recent example of this for me was a bank declining a 0.7% discount for a 550k loan (55%LVR) and the same day approving a 0.7% discount for a loan of 275k (77% LVR). The 275k has house insurance, life insurance, bank accounts etc all with the bank. The 550k was a dry lend. I argued the 550k client 10 years in current employment and strong servicing but they would not budge.

When you talk about flexibility; if you have mulitple products and a long history with the banks they will bend over backwards to keep you.

Examples i’ve seen so far this year include;

Loans approved as full doc without financials
loans turned around from application to settlement in 48 hours
investment loans unit trust (at retail rates)
unsecured personal overdrafts (keep a deal within 80%)
loans approve with servicing shortfall
credit suggesting rate discounts to get servicing over the line

Split banking will only help you if you’re not disclosing your debts to other lenders. It will prevent you from getting concessions re policy and pricing and also make it harder (and expensive) to access equity accross your portfolio ( you need to apply to all your lenders).

For all the brokers out their their claiming in industry magazines and sites like brokernews.com.au that banks favour direct deals over broker deals: you almost right. The problem is that most broker deals are dry lends.

Generally speaking this is true but if you have a good relationship with your bank and a good risk grade then they should will bend on policy a bit. I would say you should be fine with a major if you are within 80% and it is overall a good deal.

I’m seeing a lot of things like this where you can only get the rules bent if your a long term customer with multiple products:- not new to bank. I wouldn’t even try if you had transactional accounts etc held with a different lender.

My post won’t be popular. I’ve read most his books and seen him speak. Banjo is correct he made no money from his own teachings: – his money has been made from writing books and public speaking :- )
 
He has lost a lot of credibility in recent years due to 'rich dad' being based on fictional characters and his involvement in network 21 (related entity to Amway). Most qualified people in the finance, accounting or legal sectors will say his teachings are simply flawed and incorrect and he is simply a motivational speaker. Sales people in Real Estate, Amway and other groups targeting the lameman investor use his books to hype up potential investors and make them feel smart parting with their money.  

Funny thing is that most of his supporters are in the lower social economic classes.

I think his books are great for the teenager / kids learning about money. If your want to be a sophisticated investor you can’t rely on what your learn in year 7 economics,

Major 4 or one of the banks they own (St George / Bankwest). I can’t think of a good reason to use a non bank unless there was a problem getting it approved with a bank. Stay away from mortgage managers and anyone with high DEF (deferred establishment fees).

In the current market the banks are usually more flexible than other lenders and their rates are competive (bar Westpac). In terms of leanience I will start and CBA and end at NAB – ANZ / Westpac both somewhere in the middle.

NAB are by far the smallest in the housing market out of the banks. Their loan book is under 50% of CBA (NAB is the biggest for business banking). NAB have sent some doc prep and application processing offshore where CBA bankers can approve a loan on the spot and print your contracts at first appointment (assuming you have contract of sale etc). With this in mid CBA have the quickest turnaround – NAB the slowest.

I’m sure some people would disagree. I still get plenty of deals through CBA that get knocked back by other majors. At the end of the day the most important thing is the banker or broker you use.

A good banker / broker might turn around a deal in a week. A bad broker will take 2 months : – long delays almost always relate to your contact person rather than the actual bank.

The other post was 5th July. I can’t paste a link from my iPhone

$1000 x 20% = $200 per year
divide by 12 = $16.66 per month approx
that is ignoring months have 30 days or 31 days etc – should be close enough.

Keep in mind some banks work off business days e.g. If the last day of the month is a saturday you might pay interest for 33 days ( charged on the Monday). If this happens the next month will be short month e.g. Might be from the second till the 30th.

With this in mind your monthly interest will vary however should still balance to the $200 per year.

You would need to have a pretty big loan to make it worth the extra fees and costs. Not to mentioned exchange risk and margin calls.

If you’re too small for the banks profiles listed above just take an aus$ loan from a major bank and put enough in an offset account to maintain repayments for a while. When the exchange rate is to your liking; do an international transfer to your off-set.

No point is making something more complicated and expensive than it needs to be.

The rates might be attractive but you really need to be a private banking client to get these sort of products.

P.s. Major banks will accept overseas income – you don’t need to live in aus to qualify for the loan…

Anz is a min loan of 1M and income 250k. Purpose is when security is in aus and you are getting the loan via ANZ in another country.

Keep in mind these loans have magin calls etc as security is in one currency and loan in another.

I’d question the reasoning behind it. If you are just buying a property in aust and getting the money from an aust bank simply get the loan in aus $.

Why do you need your loan in a foreign currency?

Sounds pretty good.

Without LMI you can lend up to 80% against each property – this amount needs to include existing debts.

Your calcs are almost correct. The banks won’t lend against costs therefore it is 80% of the 270k purchase as opposed to 80% of purchase and costs (280k). Drop 10k off the 224k.

It all sounds nice in theory but if they only had 1.5% deposit one would think that they might not have too much cash (might be looking for a 95% lend with FHOG etc).

Contract law / any law means diddly squat if they have no money. Even if a court orders them to pay 10% – if they don’t have it they can’t give it…

Did you use an agent?
If they were a cash buyer they should of had the depoist. If not confirmation of finance should have been required.

If you used an agent they have let you down buy not qualifying the buyer. If you did not use an agent it is a good example of why maybe you should have used an agent…

If you go down the legal path do some homework. It they couldn’t afford to buy – make sure they can afford to settle any legal claim. Otherwise cut your loses and find another buyer.

Hopefully they come up with the finance!