I was just looking at some different loans, and State Custodians have their standard variable of 6.22%, which i’m sure most are aware of.. My question is, is there anything different to the major 4?
Forget the no broker commission, advertising, etc..
For 6.22%, a 5 year loyalty discount of .2%, no set-up fees ($499 for LMI process fee) and $345 annual fee.. I’ve done some loan comparisons and they certainly stack up nicely compared to others i’ve tried..
However, the more I read, I’m seeing comments like “The interest rate is only part of what a property investor needs to consider” .. So, would an IO loan with State Custodians somehow restrict things down the track.. I don’t know how, but i’m sure someone here does.
If this is the case, can you please provide an example of how SCMC would be worse or better then say, NAB? CBA etc.. Thanks!
Dont think i will even go do the path of spending time answering this one.
Do a quick search on previous posts and you will find a 101 other comments.
Again if you are chasing rate and rate alone then whilst they are not the cheapest the rate is so so.
Personally most of my clients dont chase rate alone.Of course there are so many things about such loans you wont get them to answer i.e credit policy, "cash out" etc etc that it makes you wonder why we get fair few refinances requests form forum clients to take them away from lenders like SCMS.
Maybe they all remember the Rams RHG and Macquarie Bank days of some 24-36 months ago.
Amazing how we have such short memories.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I will do a more in depth search to find out.
I thought my post made it obvious that I wasn’t chasing Interest rate and interest rate alone, with comments like what IS the difference between SCMC and other banks in regards to future lending etc..
A dig at having ‘short momories’ in relation to the RHG is unwarranted, since it implies my post was disregarding whatever happened with them, because to have a memory of an event, one must know what happened?
I’ve asked because they have a good rate, and seeeeem to a newbie that they offer a competitive deal, what I don’t know however is how they stack up in comparison to others..
Do u have an example of why they are not your first choice?
Mac bank during the GFC- shut it’s doors and business literally – increase the rates + no new leading and was really hard to exit and refinance out of them. If this happened with any of the more well known brands or the big 4 it would be all over the news and a big out cry + the company would go out of business for sure….but smaller banks can get away with it- as they only have a small handful of clients on their books, and they can jsut literally just start all over again by offering a super low rate.
P.s Mac bank has re-enter the leading market again as of March 2010, a lot of us brokers tend not to recommend Mac bank because of their history…i have only ever submitted a loan with Macq bank if the client ask for them directly ( after our warning) OR their niche product/feature suit the clients unique situation and it’s never rate driven….more policy driven.
If they done it once, and got away with it… they won’t hesitate to do it again when times are tough or they need to achieve a higher profit margin.
I can tell you 6.22% is a “cheap” rate, not the cheapest ( http://www.shapehomeloans.com.au/interest-rates) – but not necessarily the right product/lender to go with depending on what you want and after + your long term goals and most likely if your willing to take the risk and gamble…some are.
P.s I wont comment on SCMC as i haven’t used them before..
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Try accessing equity later on.
No offset accounts?
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
Thanks Michael, makes total sense.. And I can see how that could happen in those financial times..
I’m not to fussed about the interest rate as such, I was quoting it to say it appears really good, and raised the questions because its safe to assume there’s something up with it.
If these smaller lenders are so open to volatility in their books, how do they get 5 star cannex and other awards..? I think i’ve seen Rams Home loans win awards also?
I bought Rams home loan shares for $1.18… Sold for something like 15c (sure pays to do your research!)
5 star cannex award system is not customer service driven or how “safe is their rates and company” …it’s purely based on HOW CHEAP ARE THEY COMPARED TO XXXX
wow 6.22%- ok you get an award
+ you know these company AFTER they win the award pay Cannex and another award “system” magazine/website a advertising fee to advertise their banner + if they want to be featured in their magazines etc…
Unfortunately in the financial lending industry- every bank is different and there are a lot of variables and factors to consider.
So most award system really only compares the Comparison rate.if you want to compare NOT just the rate; but the banks reputation, policy, features, suitability to your personal circumstances you will have to do your own research or go to a broker you can trust ( one that won’t recommend based on $$ commission received )
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Touche. Thanks mate
When borrowing to invest, i’m wondering if someone can tell me if you can capitalize costs, and how LMI is impacted?
Say I wanted to borrow $144k on a property, 160k. Thats a 10% deposit;
i) Is the LMI quoted on the 90% LVR figure? or the figure of the 144k + LMI = quote? (91-92% or there abouts?)
Can you capitalize other costs, such as stamp duty, fees etc.. If so, is this figure taken out of my cash deposit, or added onto the property price?
$144 borrowed, LMI quote, etc.. if stamp duty is say 5k, is this 5k added to the price of the 160k property, meaning a 10% deposit is no $16.5k instead of 16k, or is it added to the 144k borrowed, bumping it up to 149k, and is LMI then quoted on the final figure?
Hope that makes sense..
LMI price is based on the loan amount figure.
Another cost generally speaking can not be capitalized unless;
1. You have equity in another property
2. Some smaller lenders do allow for Cap case by case – but rates are higher.Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Stamp duty is totally separate and nothing to do with the loan amount.
You are borrowing against purchase price / valuation only and the balance of funds needs to come from your own pocket whether that be cash or equity.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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