Home Loans – Whose Best? – Big Banks? Or Building Societies/Credit Unions????

I agree. Wouldn't even consider the mortgage managers because of the fact that all of their loans are mortgage insured.

And Hans you dont think the non bank lenders / mortgage managers wont be increasing their rates ?

Hans,

Is brokersite an actual franchise?

We have found pro’s and con’s with both – Banks vs non Banks.
We have found that the banks were the least lenient most conservative when it came to the lending amount (valuations, paperwork etc)
However they have a better banking structure for accounts. Offsets, pulling money out, internet banking, ATM’s etc. Across our portfolio we have accounts with CBA, St George & ANZ.

We found that non banks were the most flexible when it came to valuations and lending amount, but they have no banking facility for ease of day to day transactions.

Solution for us. = Get the initial loan with big 4 banks. Work the IP until it stabilizes to a point of bordum and predictability.
Then shop around to other banks inclusive of non banks for the best valuation and increase in lending in the overall investment strategy.
(I doubt this is real, but I always got the sense that non banks on refinance work harder because they know what we went through to get laons off the big 4, therefore feel more comfortable refinancing us. this may be false of course, but the service was great in the refinance conversation)

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.