Refinancing to loans.com.au – is it a good idea??

Have a client ATM who has a loan with them and seems happy enough.

Suspect this will change in the future when restructuring will no doubt take place as the property prot folio grows. 

The online discount lenderes are a fast growing beast and suitable for a set and forget type loan with no intentions of aquiring more property imho. 

So who would be notoriously good for planning to release equity in the future and grow your portfolio.  I know you can't endorse anyone but since this is all new to me are their known players in this field?

Course the other issue is they may be fine interest rates are low but be surprised how quickly they rise when times get tough.

Other thing is the level of advice you get from these lenders.

Just restructuring a forum members portfolio who had a couple of loans with one of the lenders already mentioned. They were told it was fine to pay your salary and rent into the investment loan on one of the properties as the facility had fee free redraw.

Unfortunately the advisor hadn't purchased an IP before but his advice has now cost this client just shy of 5k per annum in non deductible interest.

As has been said you do get what you pay for.

Cheers

Yours in Finance

LIKE!

I work in the SMSF field and I can tell you that I pay a premium for the right service. Structuring is important as is the advice you receive during the process, if you are not educated (through the advice) you will make a mistake and it will cost in the long term……

However like many sectors there is a move to online, in this case its buyer beware.

Hi Claudio,
And a big welcome to you – I see this is your first post.

On an loan of 450000$ means an interest of 60000$ in 30 years, 2000$ at year, and this is the reason why we have decided to go with them.

Just so you don’t get too confused later on, I wanted to point out that you are missing a zero on both of those amounts.
One year’s Interest is ~$20,000 and not $2000 (otherwise everybody would be wanting one !!!) :p
Therefore, you will be paying $600k over 30 years. Still a good rate in this day and age though,

Benny

Jamie Moore wrote:

<div class=”d4p-bbt-quote-title”>Claudio_Baldo wrote:</div>
We are buying our first home and the cheapest interest rate is 4.48% which is 0.5% less then the cheapest, I was advice of, from a bank (Suncorp 4.99%)
Claudio

Hiya Claudio

If the lowest rate is the only thing you care about then go for it. It’s quite low.

Cheers

Jamie

Remembering that what is the cheapest rate now, might not be that cheap in the future!

I refinanced a PPOR for a couple recently who were with a online mortgage provider. The rate had creeped to 0.8% higher than the rate we refinanced them over to. Needless to say we put them with a lender which has a long history of offering competitive rates to new AND their existing customers, instead of running on a constant churn which bites into the customers which don’t keep track of their interest rates.

Thanks to everybody for the reply.
I honestly don`t know were to go, am I an Engineer and I can do the math but I understand nothing about investments.
Sorry I wasn`t clear when I said the interst would be 60000$, what I meant was the difference of a 0.5% in 30years.
So, in case I get an interest of 5% today more then 4.48% I would pay 60000$ more then with the lower rate.

The increment of the interest rate should be the same for all providers and it should be the increased cost of the money decided by the Australia Central Bank. The increase in general is done in 0.25% as long as I know.
So if I start today with this rate it will be always the same compared with a different loan made with a different bank, isn`t that right?

What do you mean about equity? The possibility of paying off only interests and have the mortgage lowered for some years?

How would you suggest me?
I am with Commonweath bank and what they offer me (a broker did) was an interest of 4.8$ roughly for three years and the 5.24% variable.
Suncorp was the best with 4.99$ variable.

Still, I don`t know how variable mean and how much it changes on the market (I guess the variable word for someone like me is just a big uncertainty…)
Anyway, going back to the point, if the loans.com.au is worth to be trusted (signed off by Firstmac I have seen) and it offers the best rate on the market, with a 100% offset account and the chance of pay back extra money on the mortgage, I don`t know why I should go with them.
This is a very important decision for me and my family and I am a bit scared to take the wrong choice, I hope someone can help me to find the best (if there is one) solution./
Thanks

Claudio

Hi Claudio,
Good on you for asking the questions first – smart move !! You have already received some invaluable knowledge from several qualified members, each offering good reason to question this loan and where it may lead.

This is a very important decision for me and my family and I am a bit scared to take the wrong choice, I hope someone can help me to find the best (if there is one) solution./

Absolutely right. I’d suggest you check the other answers you have already received, and contact one of the repsonders (maybe the one whos response seemed to “click” with you. But really, any and every one of them would be able to explain what loan type would be best for you, and (maybe) WHY this loan could become a problem into the future.

Pick up the phone and call one of them. :)

Even as a non-adviser, I could see several holes in the advice you have already received fro. Never ask a barber if you need a hair-cut – you know what the answer will be, right?) :p Get the answers from one of our residents – I’m sure you will be much more confident and knowledgeable after spending time with one.

We are buying our first home

Well done – your needs might be different to those of investors right now, but remaining flexible is the key. Who knows – you might want to become an investor a few years into the future. Thinking of your loan structuring NOW is a really good move. Well done.

Now, where’s that phone!!! :p

Benny

PS Just to help you get up to speed on a number of basics, try this :-
https://www.propertyinvesting.com/forums/general-property/4349450

Benny