Home Loan / Mortgage

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  scozbargain on 03/04/2010 - 16:03

  try having a look at http://www.ratecity.com.au/home-loans/ or similar. You want to compare "real rate" as sometimes lower rates have monthly fees pushing up the cost. Even if you still want to use a broker you can check to see if you really are getting a "better" deal.

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  slowmo on 03/04/2010 - 23:23

  shopping for a mortgage loan is a headache… there's always the low interest to draw you, then hitting you with mthly fees, admin fees, etc. really unpleasant stuff if you are not careful.

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  corrad on 04/04/2010 - 12:48

  yeah, mortgage loan is the biggest financial obligation and potential savingg out there. I am a bit surprised that none of the treads within the past few months discuss home loan.

  wow, some of the lenders on ratecity.com are full 1% lower than the big 4.

  It seems 'real rate/comparison rate' would include the majority of the monthly/admin/misc fees? What is the typical closing cost to purchase a home?

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  barry4703 on 04/04/2010 - 15:07

  +1

  I would 100% reccommend going to a mortgage broker - they are free and the two I went to went through all the best options and let you know all the hidden fees. We are with BankWest - their rate is the average of the big 4, less 0.9% I think. But they had other features we wanted like redraw, offset and no penalty on early payment.

  I used mortgage choice (qld) as our broker. They have software to do detailed searches.

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  [Deactivated] on 04/04/2010 - 22:35

  If you want no frill loan go to ING or Myrate (slightly cheaper than ING).
  If you want an account with more facilities like credit card and offset account then go some NAB branch called Homeside. Mortgage broker are pretty good and free and will recommend the good product except for Myrate as they are more online based and don't pay any commissions to mortgage brokers.

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  kate777 on 13/01/2011 - 22:30

  Get a mortgage broker! AMP are quite good, ANZ competitive.

  Be really careful with MyRate. I was looking at using them and wanted a pre approval. I then changed my mind and they are charging me $400. I was told valuation was free for your first one. Was not told anything about a fee to put together forms. but YES in fine fine print in the email it does mention if I cancel then they take 400 from my credit card which they take your details prior. I am so annoyed! because after getting contract and actual reading all the other fee's like exit fee's I was not sure if I wanted to go with them! but now they want 400 bucks for nothing!! worse than a bank! seriously a bank wouldn't dare treat you like this

  So much for trying to move away from a bank to non bank, never again.

  • 

    ESEMCE on 21/01/2011 - 13:33

    The lesson I learned was:
    always read the fine print!

    The banks will just screw you in other ways.

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  krum on 14/01/2011 - 19:26

  If you wouldn't mind letting us know, what is the current rate that you are getting?

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  Matt P on 15/01/2011 - 14:56

  be careful of the cheaper options. Often the "online" and "low rate" lenders have "low rate" service. Its all good if you're paying less for your loan, but if you get sued by the vendors for missing settlement date, it might become more expensive.

  a mate used a low rate one recently and his lender missed settlement by 3 days. In those 3 days, there was a rate rise…. Cost him about a grand (12mth fixed rate then variable)

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  infinite on 16/01/2011 - 12:25

  +2

  I would advise 100% AGAINST using a mortgage broker, under any circumstances. Never EVER use a broker.

  Mortgage brokers are the snake-oil salesmen of the Banking industry. They have no qualifications, no actual understanding of the products they sell & are regulated by the finance industry in no shape, way or form. If you decide tomorrow morning you want to become a Mortgage Broker, put it on a business card and start applying for loans through the banks on behalf of people & that's as difficult as it is to be one.

  People assume that brokers are great because you don't pay for them & they "keep things competitive". That couldn't be further from the truth & the commission they earn from the Bank or smaller lender is most certainly built in to the fees and charges the bank put's on you, in the home loan. They just build that commission payment in to other-named fee's & charges (Establishment fee's, etc….). Brokers also don't keep anyone honest, or any of the banks competitive. The single requirement that many of the banks and lenders have for brokers these days (individual brokers, or broker companies) is that in order to be able to submit their home loan applications to the bank for consideration (and most importantly, their commission payment), they have to provide X amount of home loan applications per month. This means that not only is your broker feeding you a line of shit when they say their only motivation is to get the best deal for you, their actual motivation is in fact the exact opposite, as to be able to continue doing business with the bank, they'll submit loan app's they know have no chance of being approved, simply because it enables them to meet their submission quota's. This is the worst actual thing that can happen for the customer, as when the broker either ditches the client for not getting the loan, or the client realizes that they just got bent over - when they then take the loan application to the next bank, they get turned down right off the bat often because multiple credit applications in a short amount of time significantly lower your credit score & their is also a credit-decline marked on your financial records. Worse than that, often dodgy brokers (especially the ethnic brokers who always submit loan applications on behalf of their ethnic community who don't speak English well) will submit the same loan application to multiple banks at the same time, which can destroy someone's credit rating so badly on a bank lenders assessment sheet, the client will be auto-turned down for loans from anyone for the next number of years. There's absolutely no consequences for doing this to people either for brokers, as what they do is completely and totally unregulated.

  Most people don't understand that the lending process is incredibly complex, involving a huge and long list of requirements and factors. As a senior lender or credit officer at a bank, you often work from a 1200+ page long credit manual in making decisions about approving loans, or changing lending policy. Parts of that lending policy within the major credit guideline will change up to 20 times a week, too. So it's impossible for brokers to keep up with that level of change and lending knowledge from more than one bank, as it's impossible for anyone to do that.

  The only reason why Banks even allow mortgage lenders to exist is because their lazy and don't give a shit about consumers. It's actually better for the banks to have mortgage brokers, as it costs significantly less to have them, than it does to keep lending managers in bank branches. The big-4 Banks own more than 95% of the lenders, too. You'll find now (if you look in to it) that even most credit unions and community lending societies are actually just subsidiaries of one of the big 4 (ANZ/Westpac-StGeorge/Comm/NAB).

  To get the best possible deal, you need to walk in to a branch of each of the big 4 and speak to an actual lending manager. Lending managers are paid a salary by the bank & their incentive is to bring in quality home loans, not volume of home loans. Lending managers have the authority to issue a massive range of "life-of loan-discounts", as well as waiving establishment fees, account fees, annual fees, discharge fee's & can also bundle savings accounts, business accounts & credit card accounts to knock off all those type of fees across your accounts, too. The only requirement to obtain any of these benefits is to ask for them, too. Anyone can get them. Except of course mortgage brokers, who can only secure any of these benefits for clients if the banks are advertising them as part of a loan advertising campaign for that month. Other deals lending managers can get for you include student packs, professional packs & stacking packs. These "packs" can be added on if you meet certain criteria such as earning >$65K per year or your re-financing more than one home loan from a competitor as part of your application. These "packs" are loan discounts for the life of the loan, of up to 1.2% of the interest rate your home loan has. Again, all that's required to get these discounts is to ask your lending manager. If you go through a mortgage broker, you'll only get it if it's an advertised part of the loan because the loan's being run as a big promotion by the bank that month.

  The reason why there are no actual effective comparison and bargain sites out there for home loan consumers, is because the pro's and con's are wildly different across all home loans, from all banks and lenders. Each lender literally has hundreds of loan options, all with varying interest rates, fees & charges. What you need to do as a consumer is figure out what you want the loan for and how much of your income you can use to repay your home (A maximum 60% of your income is the best figure to go by). Then go to one of the bank websites and use their mortgage calculator to find out how much you can borrow based of that affordable weekly repayment figure (max 60% of your income). You'll get an idea that way of how much you can borrow. Next up walk in to a bank branch and speak to a lending manager. Explain how much you can afford to borrow and what the purpose of the loan is for. The lending manager will give you a range of loan options & explain the total financial cost of each of them to you. Take that information to the other banks next and then bargain with them for better alternatives. It's the only way you'll find the best deal, with the best life-long interest rates and fee-saving options.

  • 

    llama on 16/01/2011 - 17:36

    Agreed - I did a better deal refinancing myself via ANZ than any broker could offer me.

    Make sure to get the "bonuses" like fee-free savings accounts for the whole family, etc. Also, with ANZ there was a "executive loan" or equivalent, which drops 1% straight off the standard variable rate… only qualification was (I think) a certain lending amount, and to ask for a discount.

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    moooooooo on 17/01/2011 - 12:17

    Agreed. I organised my own first mortgage then used a broker for a remortgage + new investment property deal. I would have had far less pain doing it myself. Although I didn't suffer any of the rejected credit scenarios described by infinite, I did have problems with the paperwork.

    The mortgage broker wrote down some account numbers incorrectly so annual fees were being paid out of a line of credit (instead of my actual bank account), and both loans were tied to the same offset account (which is not supposed to be possible I thought) and the bank got tangled up, and then dealt with it by linking two loans together incorrectly.

    I could see the issues and wanted to resolve it quickly but even though I knew the exact nature of the error, who had done what, required steps for resolution, etc, the bank would not deal with me - their relationship was with the mortgage broker since they'd initiated the transaction on my behalf. Never mind that the broker was incapable of understanding (even with the issue documented). In the end, the broker just sent through my document to the bank and it was solved, but it was extra steps required when I didn't need the stress.

    EDIT: All future arrangements will be done by me, not a broker.

  • 

    altomic on 02/04/2011 - 23:16

    I tried a mortgage broker with the belief that they would be some sort hot-shot Ozbargaining home loan dude.

    far from it. they looked on a crappy excel spreadsheet and said "this bank looks good…..ANZ?!…..hmmm, must be a new bank".

    yeah, thanks. (ok, slight exaggeration, but the home loan person was craptacular)

    walked in to Bankwest and got a reasonably good loan that is 1% lower than the banks. for 3 years.

    though the guy at bankwest stuffed us around with the loan. had to go back 4 times with additional paperwork/documents (that we had provided at 1st interview but were told they weren't needed).

    Bankwest also took 6 weeks to "offically" approve our loan. we had to delay settlement day 3 times.

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  infinite on 16/01/2011 - 22:48

  Most of the "Executive Pack" type loan discounts require a minimum loan application of $350K (either borrowing or refinancing more than this amount in total).

  • 

    llama on 17/01/2011 - 10:06

    +1

    Yes, true. Since we were close to the cutoff amount, what I did is borrowed the minimum to qualify, then stuck the excess $ in an offset account. The interest on the excess pays the loan interest, so effectively I'm sitting on a slush fund of "redrawable" money for free… easier that having to apply for an overdraft or supplimentary load to use for emergency, car purchase, etc.

    Of course, that only works if you can afford the extra repayments.

    • 

      moooooooo on 17/01/2011 - 12:20

      And if you can trust yourself not to spend the extra money. If the extra unwanted cash sits in your offset account, then it works out to be the same as if you had borrowed the lower amount. If you spend it, you're playing with cash you don't really have therefore it costs more in the long run.

      • 

        llama on 17/01/2011 - 13:29

        Yes, but borrowing the extra money gives you up to 1 percent interest rate saving on the entire life of the loan (usually 30 years) - so it's NOT the same as borrowing the lower amount at all.

        It's a heap cheaper borrowing money against a mortgage than a credit card or even a personal loan. So, effectively what you are doing is providing yourself with a pre-approved and instant line of credit at home mortgage rates.

        The other way is to borrow the higher amount to secure the cheaper interest rate, then immediately repay the whole excess back into the mortgage again as a lump sum. Since that comes off the principle, you save interest and get yourself a "buffer" for times when you need to default on payments.

        Or, you can consolidate all your other debts and use that to soak up the extra mortgage amount. That way, you'll really come out in front… providing that you don't spend up again on other credit providers or buy anything from HN on the never-never.

        At the end of the day, if somebody can't manage money then anything that requires self-discipline isn't going to work for them.

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  saxlady on 17/01/2011 - 15:12

  If you use a mortgage broker be very careful - we had one that left things to the last minute (after having had 2 months to process it), and then a few days before settlement we were still waiting on the paperwork. They rushed it through and when I received the paperwork I found it was the wrong loan! We were moving interstate and moving into our new place on settlement day with a moving van scheduled to arrive the same day and would have had no place to go to and nowhere to put our things.
  Our conveyancer arranged for us to delay settlement and we rented from the previous owner for a couple of weeks while I sorted a new loan. The whole thing was a nightmare, BUT I actually found a better loan than the original one we were meant to get so apart from the stress of the situation, it worked out better overall.

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  tazmaniak on 01/04/2011 - 10:12

  I can understand that some people are unhappy with mortgage brokers, however my experience has been excellent.
  Tassie Home Loans' staff are very efficient, friendly and professional. They organised an excellent product taking into account my particular circumstances for both of my houses. I've had other friends use them with happy results too.
  In fact, I walked in one day with no appointment, probably 1 year after my first transaction. The man that served me remembered my name and the suburb of my purchased house straight off the top of his head. I doubt I'd see that sort of service from my local bank…

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  clandestino on 01/04/2011 - 13:30

  I strongly suggest the DIY approach to homeloans. Take the time to learn how they work, how the interest is calculated, how the product offerings compare to one another…and take the time to understand the terms and conditions.

  Mortgage brokers might be friendly, efficient and professional - but they are earning a commission from writing your loan. In effect, you are paying their wages.

  If you are not interested in homeloans, or understanding how they work, and want a hassle free experience - choose a mortgage broker.

  However if you want the most cost effective product, then do your own research. This way, you won't be limited to the loan providers on the brokers panel.

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  neo21 on 01/04/2011 - 18:16

  I agree to go direct to the banks