Hi All,
We'll soon be embarking on that big journey called refinancing. We're with Members Equity and – while they have been good to us at the start – we have now hit a brick wall with them and plan to take out PPOR and 3IP loans somewhere else. We feel they are designed for home buyers, not investors.
Anyway…..we would really appreciate people telling us the lenders they like and why. Why is your particular lender good for investors?
We're hoping this might narrow the field. We don't want to go through a broker.
thanks,
CarlinYou are right about ME very good for your first home and not much more.
Your question is like how long is a peace of string and has so many variables an answer cannot be given without a lot more information.
Richard Taylor | Australia's leading private lender
What do you have against brokers?
I am with you Alistair i think we have 2 heads and charge like wounded bulls.
Richard Taylor | Australia's leading private lender
Hi there,
Our problem with brokers is that every broker just has a limited stable of lenders. We want to explore more widely, without the vested interest in directing us to a certain lender.
As far as variables go, not sure what exactly you're after. Without divulging our personal financial details on a public forum, we're dual income, no kids, lots of equity in PPOR and one of the IPs.
Our question is just a general one – who have you gone with and why? Did your lender offer something special? Are they good to deal with? Are they investor-friendly and – if so – how do they show this?The reason why ME is no good for us is that they have a policy of not lending for serviced accommodation ("ineligible security") – and that is exactly the accommodation we offer, with a solid track record of success. But not even that will make them sway on their policy, meaning that they do their sums based on what our properties would achieve as standard rentals.
cheers,
CarlinCarlin
I disagree that the average MB has a limited choice of lenders.
Most brokers could access over 30 lenders and probably 300+ products.
In saying this 80% of these lenders are not investor orientated, do have a problem with Trusts, service level are totally unacceptable and what is a special today is not tomorrow.Serviced accomadation is a very limited market place for lenders so most will limit how much they want to lend (if at all).
In regards to your requirements your broker would need to know the entity you would be purchasing in, the approx purchase price, loan amount required, loan features if any etc etc.
Richard Taylor | Australia's leading private lender
Hi Carlin,
There is no problem with choosing not to use a broker, but your reasoning is floored. Most non bank lenders get their funds from the same source. Hence there is no real difference between products and especially not lending policies. A good example is Virgin Money, which is a cut down, rebadged Mac Bank product, Virgin Money loan officers sit right next to the Mac Bank staff in the same office. For the most part investors are best off using banks, to avoid exposure to mortgage insurers, pretty much all brokers have access to all banks (except Bank of Queensland).
The issue you are going to hit, is that to max out your servicing in terms of full doc loans, you will almost definately need to use more than one bank, to work out which ones suit your situation best you need an intimate knowledge of how each lender calculates your servicing capacity. Only a good broker will be able assist you with this.
Regards
AlistairRemember there is a big difference between lenders and serviceability.
Some will take 80% of your rent into consideration others 100%.
Some will assess your loan at the variable rate + a margin say 1.5% others will take the actual payment rate.
Some will add back the actual negative gearing benefits at the payment rate other will add them back at the higher sensitised rate.All this can make several 000's of thousands difference when it comes to how much you can borrow.
Richard Taylor | Australia's leading private lender
Some good points – especially about using a variety of lenders to maximise borrowing/servicing capacity. Interesingly even the 'major banks' are stuggling to differentiate their products from each other in order to try and increas their loan business – challenge being most are identical style loan products. If you are lo doc that narrows the field a bit, but other than that the 'world is your oyster'. Find somone who treats you with a bit of digntiy and respect and more than one choice, rather than trying to sell you are loan product that suits them. If you have a min 20% deposit, you may be better looking at one of the bigger banks, under a 'pro pack' arrangment, but as there are so many loans and lenders – if you are not in a hurry perhaps keeping your eyse out for 'specials' such as no app fees, or special fixed interest rates may be the go. Personally I would hold ANZ or St.g in higher esteem than CBA or NAB – westpac? There are some excellent smaller bank products too – often a lot cheaper rate wise – such as regional specific banks, and of course Citibank and ING offer good rates and packages.Non banks I have a soft spot for Rams, (high loan exit fees for first 2 or 3 years, although I'm assuming you would not be refinancing again)and they have some great lodoc/no doc packages. There are some good 'on line' loans around for the bold too.
As far as brokers go I can appreciate your comments, but a non affiliated broker (such as mortgage choice – or someone that is not primarily trying to flog you there 'own' rebranded type loans) or a broker that actually uses proper software using your criteria should be a good starting point – particularly with your needs – you may have dealt in past with one of the many brokers who come form 'ex bank or accountant' back grounds, that scatch their date and say 'yep, I;ll put you with Liberty, the'yre the best (burp grunt etc) for you if the Commonwealth Bank says no'.
All the best with your search and growing portfolio.
Hi,
I don't think that I often "scatch my date" and Yes I do recommend clients to Liberty and their products, strangely some times it is when CBA has said 'NO'. Sorry to also say that I do not come from a ex bank or accountant background.
But I can say that Liberty does give a lot of people a chance when others don't or WON'T.
As for the rest of your post – Yes you should only ever use a broker who uses the correct software and is willing to look for products that suit what you are looking for and not what they think is best.
Sharlene
[email protected]Surely we can get "an intimate knowledge of how each lender calculates our servicing capacity" without having to go to a broker. Just a case of giving lenders (that we're considering going with) the relevent figures ie: incomings, outgoings, existing debt.
And we want to know the maximum we can borrow – we don't want to go to them with a specific figure we want to borrow (that's not to say we plan on borrowing the maximum, but there's no point in us switiching if the other lender's not offering to lend us much more.
Haven't ruled out going to a broker though – but as you say, Richard, it's hard to find one that's investor orientated, doesn't have a problem with Trusts (not that we have a Trust – explored that one and didn't seem worth the cost/effort), with a service level that's acceptable and with specials that last beyond today.
thanks for all tips,
Carlincarlin wrote:Surely we can get "an intimate knowledge of how each lender calculates our servicing capacity" without having to go to a broker. Just a case of giving lenders (that we're considering going with) the relevent figures ie: incomings, outgoings, existing debt.You're absolutely right. But do you have the time and patience to do all this.? A broker should be ble to tell you this over a range of lenders regardless of how 'investor oriented' if you gave them the figures. It is surprising sometimes the variation between a range of lenders, but generally you are simply assessed on surplus income above liabilities after taking all income into acccont, and a 'nominated' amount for yourslef/spouse/children etc. THis is where theere is some variation, and also with how much rental assessment is counted (%) and how credit card limits and other current loan/mortgage repayments are calculated. Some lenders use the actual repayment figure, some view it as if you have the deals with them already, others are a bit different again. All the best with your 'jouney'.
I think one problem is every lender is going to tell you they are the best.
Each has their own little foibles with regards to serviceability some of which they publish others are more of a credit issue and therefore not marketed openly.
Unless you check out 30 or so lenders I think you will find it difficult to get a balanced answer.
Most will have no knowledge on loan structuring anyway so thats not an issue.
Richard Taylor | Australia's leading private lender
Hi Carlin,
No lender is going to give you their servicing calculator, so how do you propose working out which lender/combination of lenders will be best for you?
"but as you say, Richard, it's hard to find one that's investor orientated, doesn't have a problem with Trusts (not that we have a Trust – explored that one and didn't seem worth the cost/effort), with a service level that's acceptable and with specials that last beyond today.
I would think that Richard has proven through hundreds of posts that he ticks all of these boxes, why don't you give him a call. You are simply not going to get what you want without using someone such as him.
Regards
AlistairHi Carlin,
I don’t know which broker has burnt you … You seem to be feeling a lot of pain.
Our group has 40 odd lenders and 700 odd products.
My whole ethos is to help people solve their problem and let them achieve their dream..I firmly believe that a good broker would be like your Doctor and would also save you thousands.An interesting site for you to browse is
http://www.ratecity.com.au ….I hope that this helps you.
Cheers,
Rod
.All of my Property and Business loans are through the CBA,….
Not because the are overly great,… I have threatened to leave many times but every time I threaten to leave they finally come around and match what ever deal I have found else where.
so for now I am with them.
ING- not for any particular reason other than when we were first home buyers they offered the best deal and they are also looking after us with our first IP where we go next i am not sure. We also have used a broker both times and for a car loan he comes to our home talks in simply english answers the same questions that i put to him over and over until i understand them.I wouldn't hesitate to move banks if there offer was better but i will always stick with my broker.
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