Hi guys,
the time has come when I finally got some money saved for my first home in Sydney. Unfortunatelly my savings is not even close to avoid LMI but I do have aroun 10% of the home price in savings. I know I should perhaps save a bit more but I am REALLY sick of paying rent and will rather pay LMI now than rent for another few years.
Anyways I figured (after lot of reading around PI.com) that first I need to see a mortgage broker and establish how much approx I will be able to borrow. So I did just that and there is few institutions which according to the brokers tools would be willing to lend me then amount needed.
Now this is where my question comes. How do I choose the right one? I know there are some features like offset acct, early mortgage repayment, no fees v monthly fees loans etc etc. Well I havent really dealt with bank loans all that much before so I dont want to make some bad choices here. Only thing I know is that I wanna pay lowest possible interest and dont mind being on variable rate as it should cost me less on average.So is there anything I should definately ask for on my loan or anything else I should definately avoid? All recomendations welcome.
Thank you all
Dan
Dan- as you have said there are hundreds. HOw do you chose the right one?
For a start, a mortgage now is not a life long marriage for better or for worse. You will find that you have the option to change, and within the one financial institution – so dont feel as if your decision now will be the one you are stuck with for the rest fo your days.
Secondly, look for flexibility- if its your first purchase, and you are focussed on the property, and not so much the loan, let the bank or broker recommend the product (based on the information you should provide them) a little licence in providing the best fit.
You may find you plain old vanilla variable home loan, with the lowest rate best- as you change your patterns over the ensuing months as a result of buying the biggest investment to date, this will alter.
On rates? There is one lender who will provide an introductory offer in the high 4%’s, and this is an introductory offer (reverts to around 7% after 6 months). Others stay around mid 6%’s, and this is probably what you need.Chris Durman
Commercial Capital Finance Pty Ltd
B 07 3853 5221
F 07 3853 5256
M 0427809858
C/- Brisbane Technology Park, 1 Clunies Ross Court, Eight Mile Plains, Queensland 4113
ACN 110 082 347
CAUTION – This message may contain privileged and confidential information intended only for the use of the addressee named above. If you are not the intended recipient of this message you are hereby notified that any use, dissemination, distribution or reproduction of this message is prohibited. If you have received this message in error please advise the sender by reply email. Any views expressed in this message are those of the individual sender and may not necessarily reflect the views of the Commercial Capital Group.Dan,
What are your plans after buying this home? Will you keep buying property or will you sit for a while?
I imagine your loan size in Sydney will qualify you for a professional package, ask your broker to see if this fits for you.
All the best mate,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Chris: I did not realize that I can change the type of the loan as I go. I imagine it will probably cost me something but thanks for pointing that out. As to the broker recomendations – I read here somewhere that broker should be getting same provision fm the bank regardless what he/she is recomending me is that right? You see I am just very conscious of ppl trying to help me of my little savings.[blush2] Maybe I need to trust the broker little bit more.
MortgageHunter: Oh yeah I remember seeing people here talking about those professional packages but I was not really sure what the conditions are. Cheers for bringing it up I will definatelly ask my borker about it. Asking cost me nothing right?[biggrin]
As far as my plan with the property goes: Hold it, live in it, try to pay as much of the mortgage as I can and then perhaps in 2-3yrs time rent it out. I am somehow hoping that by that time the rent will cover at leat the mortgage interest interest entirely.
If that works i will then try to use the equite there to invest into first PI. Bit slow I know but property is a patience game or not? If you guys have any suggestions pls share here.
Thanks for help
Correct Dan- the broker is compensated by the lender (on most residential) deals- and the more lenders the broker has access to the better it is. Commercial and other types of finance are usually a different story for the broker.
I’d suggest stay flexible while you get the property, and then look at the change of the structure once settled. You can fix, and unfix lending and in some instances there are fees to pay. CheersChris Durman
Commercial Capital Finance Pty Ltd
B 07 3853 5221
F 07 3853 5256
M 0427809858
C/- Brisbane Technology Park, 1 Clunies Ross Court, Eight Mile Plains, Queensland 4113
ACN 110 082 347
CAUTION – This message may contain privileged and confidential information intended only for the use of the addressee named above. If you are not the intended recipient of this message you are hereby notified that any use, dissemination, distribution or reproduction of this message is prohibited. If you have received this message in error please advise the sender by reply email. Any views expressed in this message are those of the individual sender and may not necessarily reflect the views of the Commercial Capital Group.Chris: thx for help appreciate that mate.
As to my progress – After rather lengthy discussions I decided to go with ANZ Breakfree package (one of those suggested by my broker). I dont mean to advertise here or anything so basicaly I decided for it, because of its professional package discount rate at which they still offer all the bells and whistles.
So now my application is about to be sent thru and hopefuly approved in few days. Then the next step – finding THE HOUSE:)Does any of you have an experience/knowledge of that particular package? Cheers
ANZ Breakfree is a fine product.
They will also allow you to capitalise the LMI which means your deposit will go further – therefore less LMI. Hope this makes sense [blink]
You will also be able to use this to grow your portfolio without additional fees.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
MortgageHunter: I am afraid I dont follow here. I thought LMI will be one of the first costs I will need to pay out of my pocket and its pretty much “wasted” money if you know what I mean. I thought LMI is a necessary burden I need to take not having 20% deposit. What am I missing?
My apologies if I wast your time over this, I should perhaps do way more research or ask more questions while talking to my broker. My last session with him only took 3 hrs[biggrin]
Dan
With ANZ (and some other lenders) you can add the LMI to the loan so that it does not have to be paid upfront. You still have to pay for, just not upfront.
As to your other questions, brokers get a commission from the lenders, but some pay more than others and this can influence the decision of some brokers. ANZ actually pays slightly less than the other major banks. I kind of like ANZ myself.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Dan,
Basically capitalisation of mortgage insurance allows you to add the LMI premium to the loan amount,
E.g., Required loan amount $300.000
Mortgage insurance for this loan, lets say $5.000
New capitalised loan amount = $305.000Keep in mind ANZ will allow LMI to be capatalised providing the total loan amount does not exceed 95% LVR, also stamp duty is payable on the LMI premium, in NSW its 5.0%
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
stamp duty on LMI? – you have got to love the state govt
Thanks a lot guys, LMI is now much clearer to me.
Yeah I noticed that there is also the “other” stamp duty. This one would not happen to be somehow refundable or vawed for first home buyer would it?
I am pretty sure my broker mentioned that there was a part of the mortgage fees which should be refundable to me on the settlement of the purchase. There was sooo much info i was getting from my broker that I was not able to hold it all:(
Perhaps only a wishful thinking here though.Stamp duty is to be abolished in NSW for first homebuyers purchasing under $500.000
Mortgage stamp duty has been abolished in Victoria,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Steven
ANZ actually let you go over 95% with LMI capitalised. ie LMI on top of the 95% loan. (I’ve personally done this 5 times).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
That was my point Terry – 95% lend pus LMI lent as well. That actualy reduces the LMI as the deposit is slightly higher.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Terry,
ANZ policy is max 95%,
However you are correct, LMI will consider a higher LVR, but approval for this is discretionary.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Hi, excuse my ignorance here,but, could someone please tell me what LMI and LVR stand for?
Thanks
AnitaHi Anita,
LMI = Lenders Mortgage Insurance
LVR = Loan To Value RatioRegards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Hey mate what location in sydney r u looking at?
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