- Bazikki wrote:Hi Gary, just wondered how you got on with your mortgage search and who you decided to go with in the end?
We're in a similar position to you…looking to leave Westpac…after the best interest rate possible…and also considering Pacific Mortgage Group given our frustration with the big 4 banks.
Just trying to get more info as to what a mortgage manager (i.e. PMG) is compared to a broker before making our decision.
Bazikki,
I also looked closely at PMG however I got a bit worried when the person who answered their 1800 xxx xxx phone number sent me an email with his signature being the 'CEO of the company'. I don't mind a 'small company' but when the CEO is answering the phones, thats a bit TOO small for me… also, he wasn't the most helpful or friendly guy going around. I also did a bit of a google search on his name and he had links to several other cheap mortgage companies so I ended up staying away.
I have filled out the paperwork with State Custodians only last week and so far they have been great. I've been dealing with Heidi there and she is really responsive, friendly and helpful. I tried to negotiate a reduction in the annual fees but wasn't able to do so.
Good luck with it all.
If the CEO is answering the phone then maybe his Company is not long for the independant world and you soon may find you are owned by someone else.
Richard Taylor | Australia's leading private lender
Exit Fees, why would i pay?
If PMG (or whoever i borrow money from) goes under, why would i be expected to pay exit fees? If a new group takes on their mortgage portfolio wouldnt it be with the same conditions (that i signed under). If no-one takes on their mortgage portfolio where does that leave me…don't i have to just refinance as i like? I am doubting here that i dont have to repay the loan…otherwise if my lender went under it would be time to celebrate!Life is not that simple, wobbly…
ASK GE Money/Aussie/Wizard customers…For those who don’t know the structure of a mortgage manager:
A mortgage broker can go to a lender like advantage, firstmac, GE etc and sign a mortgage management agreement. These are often referred to as white label loans. The funds come from the lender on a wholesale basis. When the lender sends statements they go out on the broker / mortgage managers letterhead.
Problem is when the broker / mortgage manager moves on, goes broke, goes to work in a bank etc you are left without your contact person. If you call the bank / lender ( in this case NAB) they will simply refer you back to your broker / mortgage manager.
I’ve met people who can’t even find a person to change their repayment date, postal address, or provide a loan increase. In some cases the broker has moved and the address and phone number on the statement is no longer current.
The reason the CEO answers the phone is that he is most likley just another broker with a laptop in his bedroom.
P.s. White labels are provided at a base rate. The broker adds a margin as their trail income. The lower the rate the less the broker is making. If they are under cutting the banks don’t expect any service; they can’t afford staff and will be out of business in no time…
wobblysquare wrote:Exit Fees, why would i pay?
If PMG (or whoever i borrow money from) goes under, why would i be expected to pay exit fees? If a new group takes on their mortgage portfolio wouldnt it be with the same conditions (that i signed under). If no-one takes on their mortgage portfolio where does that leave me…don't i have to just refinance as i like? I am doubting here that i dont have to repay the loan…otherwise if my lender went under it would be time to celebrate!they can transfer your account to another mortgage manager. They can also jack up your rate so it is worth the new managers time to look after you: that is assuming you are variable. In the case of GE they just stopped lending but still charged fees if you left. I really don’t see the point if the rate is similar to what you can get at a bank? 1000s of people have been burnt.
Banker wrote:For those who don't know the structure of a mortgage manager: A mortgage broker can go to a lender like advantage, firstmac, GE etc and sign a mortgage management agreement. These are often referred to as white label loans. The funds come from the lender on a wholesale basis. When the lender sends statements they go out on the broker / mortgage managers letterhead. Problem is when the broker / mortgage manager moves on, goes broke, goes to work in a bank etc you are left without your contact person. If you call the bank / lender ( in this case NAB) they will simply refer you back to your broker / mortgage manager. I've met people who can't even find a person to change their repayment date, postal address, or provide a loan increase. In some cases the broker has moved and the address and phone number on the statement is no longer current. The reason the CEO answers the phone is that he is most likley just another broker with a laptop in his bedroom. P.s. White labels are provided at a base rate. The broker adds a margin as their trail income. The lower the rate the less the broker is making. If they are under cutting the banks don't expect any service; they can't afford staff and will be out of business in no time…This is the reason I chose to stay away from Pacific Mortgage Group. State Custodians seem to be set up a lot more professionally. At the end of the day they weren't the cheapest I found, but for a small amount extra over the life of the loan (~$5000 on a $350k mortgage) I think they'll be a good choice. Only time will tell.
Banker… I think more than 1000s
probably 10k plusGary78
I m not sure whether State custodians is another mortgage manager
Go to there website and refer to drop down menu ‘our story’
quote: ‘The funds for our loans are supplied by Australia’s largest wholesale funders’
They are a mortgage manager; albeit a bit bigger than some ofthe single person operators. If they had GE, ING or Challenger as their funders they would have many clients that got burnt. As mentioned above; I simply wouldn’t go near a Mortgage manager: Ever!
Also note the dodgy wording on their standard variable pricing. It says no deferred establishment fee if the loan is repaid but not discharged e.g. You can pay the loan off but not get your title back. Scroll further down and it says if they do release the title it costs 1.0% of the original loan amount.
What gives me the craps most about companies like this is the way they try to hide the fees…
They also have a dig at brokers on their site saying they don’t deal with anyone that accepts commisson however they are brokers themselves; just selling various lenders white label products.
They give me the heebeee jeebeees… Stay away….
I agree with banker. Having worked as a broker for 9 years I also would never use anyone but a bank, and never a mortgage manager.
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
So the fact that they recieve their funds via Advantedge which is a NAB owned business doesn't ensure any further security? I understand the fees involved in changing lenders within the first 5 years with State Custodians however I believe that the legislation being brought in on July 1 will reduce this exposure.
For me it comes down to a $ value for what I get. Using the loan comparison calculator here http://www.infochoice.com.au/calculators/loan-comparison-calculator/
and the below advertised rates and fees on a 30 year mortgage on $350kNAB – 6.74% $600 application fee – $0 per month
CBA – 7.36% $600 application fee – $8 per month
Westpac – 7.51% $600 application fee – $8 per month
ANZ – 7.41% $600 application fee – $5 per month
State Cust – 6.39% – $660 application fee – $28.75 per month + reduction of 0.2% after 5 yearsOver the life of the loan I will save
$30,831 against NAB
$86,278 against CBA
$99,188 against Westpac
$89,493 against ANZUnless i'm missing something, it's a pretty significant difference. What value do I get from a bank for that extra money?
It could be a significant savings, but you are assuming:
– rates remain the same
– your loan runs full termWhat if you:
– want an offset account
– want an increase
– want to fix down the track
– exit after x years
– refinance after x years because they cannot lend you any moreTerryw | 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
Gary78,
I see where you are coming from.
Is the loan for invesment e.g. interest only?
Let’s run some calcs at 5 years int only, noting most people refinance or restructure to buy more property.
If you go 5 yrs IO and include all establishment, Val and exit fees it will be a more realistic comparrison.
Banker
How much is the security worth and how much do you want to borrow?
Terryw wrote:It could be a significant savings, but you are assuming:
– rates remain the same
– your loan runs full termWhat if you:
– want an offset account
– want an increase
– want to fix down the track
– exit after x years
– refinance after x years because they cannot lend you any moreI assume (rightly or wrongly) that the only way State Custodians stays in business is that their rates remain lower than the banks so that isn't an issue.
Understand it's unlikely the loan runs full term, but split those differences by 30 and thats what i'll be paying extra each year the loan is in place.Just ask all those who took out loans with RAMS or GE. I think they assumed something similar.
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
Banker wrote:Gary78, I see where you are coming from. Is the loan for invesment e.g. interest only? Let's run some calcs at 5 years int only, noting most people refinance or restructure to buy more property. If you go 5 yrs IO and include all establishment, Val and exit fees it will be a more realistic comparrison. BankerBanker,
This is my primary residence the loan will be for. I have requested to go interest only for the first 5 years with the ability to make unlimitted extra payments.
The calculations based in IO, with all fees included I believe would still result in a significant savings with State Custodians. Even more so if you take into account the extra interest paments I would be paying on the higher interest rate supplied by the banks actually be used to chip away at the principle on the State Custodians rate.
Terryw wrote:Just ask all those who took out loans with RAMS or GE. I think they assumed something similar.Am I wrong in believing the reason they are currently in a bad position is that the exit fees on those loans are outlandishly expensive? Won't this scenario be removed with the legislation being brought in on July 1? I'm trying to read and learn as much as I can on all of this so if I have the wrong understanding it'd be nice to be corrected.
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