Hi All,
My husband and I have one property and are looking to purchase a second one in the next 4-6months. He currently works for one of the banks and because of that we do get perks like no loan fees, free offset account/wealth package, no LMI and they match the lowest interest rate of the big 4 banks plus 0.7% discount off that rate. When we bought our first place we didn't really look around and went with them which is fine. However, i'm wondering if we should speak to a mortgage broker and look around for our next deal or just continue with our bank?
Does anyone have any thoughts?
Thanks,
YuliaIt doesn’t hurt to speak to a broker- as most are free. Most of the time if your current lender is offering a good rate or we could negotiate one that is close enough to the lowest market rate; we would suggest you stay with your lender UNLESS;
1. Your not happy with them?
2. Rate is above the market average
3. Condition of the loan does not work to your advantage ( ie cross-Securitisation)
4. Does not met your expectation
5. Security type is not acceptable to that bank
6. Serviceability issues
7. LMI is involved ( worth while to shop around for diff LMI prices)
8. Over exposure with that one bank already – investors.
9. The banks policy does not fit your short or LONG term goal ( important)
10. The banks product does not suit the type of structure that you need
11.more…Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Michael is bang on with all of his points but if you skip from 1-10 and go straight to #11.
Ask his employer what structure they recommend for an investment?
Do they cross collateralise the securities of your PPOR and IP ?
If they say "Yes" – talk to a Broker.If they say "Sorry dont undrestand what you mean" – Be afraid be very afraid and then talk to a Broker.
They can offer you everything free but if the structure and set up isnt right it really boils down to nothing.
By the way 0.7% off the standard variable rate is par for the course and if you borrow more than $500K you should be getting a lot more than that.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thank you Michael and Richard for you responses.
It certainly has given me some questions to ask them when we go for pre-approval and if they can't answer them properly then look at speaking to a broker.
The property we bought was under 500k which is why it was 0.7% I can't remember what % they said if we had a loan bigger than 500k.Also, I have been reading on this site about Trusts. Can you recommend where I can look for more information about this and the benefits? There is a lot of information on this site but everything I've found so far assumes a basic understanding/knowledge which I don't have at the moment.
Thanks,
ygue6072 wrote:Thank you Michael and Richard for you responses.
It certainly has given me some questions to ask them when we go for pre-approval and if they can't answer them properly then look at speaking to a broker.
The property we bought was under 500k which is why it was 0.7% I can't remember what % they said if we had a loan bigger than 500k.Also, I have been reading on this site about Trusts. Can you recommend where I can look for more information about this and the benefits? There is a lot of information on this site but everything I've found so far assumes a basic understanding/knowledge which I don't have at the moment.
Thanks,
There’s a book by Dale Gatherum Goss called Trust Magic which explains various trust structures in an easy to comprehend matter. Look carefully into trusts and seek professional advice before setting one up. You will need to look at the pros and cons of purchasing via a trust given your own individual circumstances.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Yulia,
To add a bit of balance, if your husband works for a lender that waives LMI up to a certain LVR, or altogether, this can save ou thousands of dollars. This will also allow you to use a smaller deposit, which in turn you can the use to get into the next property, or pay down your non tax deductible debt instead. While many will disagree, for that sort of savings, and if you only plan to have a couple of properties with that particular bank, I wouldn't even be to worried if 'cross securing ' your loans was a condition either – you can always sort it out later if you refi. You would likely find more than a few houses withe the one lender you eventually run out of 'servicing' with them and have to go elsewhere anyway. Enjoy the savings you get – they are hard to come by with many places. That said, while some banks claim they 'have to' cross secure loans, if it does not suit I would be very surprised if you do not have a choice to do so.
Plenty of options. And while lenders are fighting for new good quality business at the moment, based on your comments I would be extremely surprised if anyone good find you a truly better deal with a mainstream lender if you are looking at rate and set up costs only.All the best with the next purchase too!
Cheers
You must be logged in to reply to this topic. If you don't have an account, you can register here.
