[AMA] I'm a Mortgage Broker, I Like Saving Myself and Others Money! Ask Me Anything!

Lmortgagebroker on 22/10/2018 - 19:14
Last edited 22/10/2018 - 22:20

Hi all,

I'm a mortgage broker, have been in the mortgage industry since 2012.
Don't like seeing poor advice or bad deals so decided to jump on here and make a post and help out when I can.

I'm the kind of mortgage broker that informs my customers of the eBay Good Guys special to upgrade their whitegoods.

Here to answer any questions you have about your home loan and mortgage products.

Comments are general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.

Introduce Yourself

closed Comments

  • craggles on 24/10/2018 - 11:11

    We just purchased a new home, our 3rd time around.

    I decided this time just to find the cheapest no frill mortgage I could without the use of a broker, didn't want fee's, didn't want accounts, didn't want credit card etc.

    We borrowed 80% and a total of 570k

    Got a no fee's or costs to set up loan with a rate of 3.82%

    Could you have done better?

    • mortgagebroker on 24/10/2018 - 11:32
      +6

      Yes.
      3.69% with $250 upfront fee.
      3.64% with $600 upfront fee.

      Both would have been a better option.

  • BananaBananaBanana on 24/10/2018 - 11:32
    +3

    Thank you for this thread. I called CBA yesterday and got 0.4% discount on mortgage rates! :)

  • fatpizza on 24/10/2018 - 11:53

    Lets say I have enough in my offset account + savings account to cover my mortgage which means I don't pay any interest each month, am I able to redraw a little to help purchase a car?
    I was then planning on upping my monthly mortgage repayments to cover the amount of the redraw over a 5 year period but would still not be paying interest.
    Most information I've seen seems to indicate you can only do redraw if you've made extra repayments, is this correct?
    If that's correct will I have to refinance if I want to do that?

    • mortgagebroker on 24/10/2018 - 12:51

      I don't understand the theory behind this.

      You will be better off using the money in your offset/savings to purchase the car outright.
      You will only have extra money available in redraw if you have made extra repayments.

      • fatpizza on 24/10/2018 - 17:15

        Thanks for responding,

        The idea was that if I'd say pay half with a cash deposit and then half with this redrawn amount, then my 'available balance' from my offset account would be higher than if I'd just paid for it all in cash. So if anything untoward happened I'd have direct access to more of my funds without needing to redraw.

        • greatlamp on 24/10/2018 - 19:21

          Offset account and redraw are two separate things.

          If you pay extra money into your home loan account, you can apply to redraw it.

          If you have a linked offset account it is a separate account to the home loan, you can do whatever you like with it. you can have $0 in there if you like

  • ultnrg on 24/10/2018 - 12:04

    Before I start, thanks for this thread!

    Been looking at buying an investment in Sydney. $1.5M loan, 60% LVR, best rate (P&I) I've come across is 4.44% with one of the big banks + offset (no fees) for variable or 4.1% fixed for 2yrs. I've seen ubank's rate at 3.99% variable which has a 0.67% discount, but there's no offset and not sure about the fees.

    Haven't been to a broker as I've been burnt by a couple in the past.

    Are these rates in the ballpark?

    • mortgagebroker on 24/10/2018 - 17:32

      3.89 and 3.99 with Virgin and AMP +plus offset.

      Worth paying the yearly fee as you will save more with the cheaper rate.
      4.44 for a major bank is good.

      Contact me if you are ready to apply.

  • Tecgeek on 24/10/2018 - 12:15

    Having offset is good or redraw facility? any pros and cons?

    • mortgagebroker on 24/10/2018 - 14:52

      depends on customers requirements.

      Large amount of money = offset
      Extra repayments = redraw

      If you are going to turn the property into investment in the future all savings should go in offset.

      • ymmf on 25/10/2018 - 18:01

        Could you elaborate on that? Why offset is good for future investment property?

        • ely on 25/10/2018 - 21:12

          The laws are farking retarded is why; somehow having it an offset magically keeps the interest tax deductible for investment properties, but redraws (in spite of fundamentally doing the same thing) count as personal borrowing and so the interest on that is not tax deductible (or something like that).

          http://www.mortgageport.com.au/information-and-tips/why-prop…

          • mortgagebroker on 25/10/2018 - 22:15
            +1

            @ely: This is correct, it is the purpose of the funds.
            See a mortgage broker to get the most out of your properties and maximise your tax deductibility.

  • HeartFeltAxe on 24/10/2018 - 12:42

    Hi there, thanks for your great help to the OzB community.

    Would you know any 'golden rules' to work by when it comes to mortgage stuff?

    • mortgagebroker on 24/10/2018 - 14:55
      +2

      Work out your own comparison rate for the term and ammount of your loan.
      Setup is more important than rate.
      Find a good broker.

  • tighytighty on 24/10/2018 - 13:15

    Op great work on the AMA… Very interesting.

    I got two loans with one of the big 4 and my owner occupied is coming off a 5 year int only period. Loan balance is 350k and house is worth 800k, and I have fully offset this loan for the past 5 years.

    As this will become an IP shortly I want to do another 5 year int only period but the bank wont budge even though I am in my mid thirties and a good income. The threat of leaving doesn't seem to worry them in this royal banking commission environment. Driving me nuts as the loan is fully offset!

    Is this the general guideline for the big 4 even if you are a very safe client? Any tips you can offer?

    Would I be able to refinance with another big bank with an offset fund which doesn't have any fees? Unlikely but worth checking.

    • mortgagebroker on 24/10/2018 - 14:59

      Refinance to another lender.
      The bank would be making no money off you with your full offset.

      Wait till you buy your next property and refinance it at the same time.

      PM if you need advice.

  • greater mimic on 24/10/2018 - 13:18
    +1

    I really appreciate the time you're taking to answer these questions. I have another one. Are there any problems with loan hopping to get cash bonuses?

    For example, I'm looking to change to UBank but the refinancing costs are about $800 up front. You mentioned earlier that St George has a $2k bonus if you refinance with them, so if I refinance with them first, and after taking into account my discharge fees and state fees, I'm about $1.2k ahead. If I refinance again shortly after, that will cost another $800 or so, but I've still managed to get to UBank while earning about $400 in the process.

    Is there anything that makes this a bad idea? Bad impact on my credit score? Early termination fee from St George (I read there was a $1k fee but I don't know if that includes refinancing)? Anything I should be wary of? Is this even possible to do?

    • mortgagebroker on 24/10/2018 - 15:01

      Check the discharge costs.
      Cashback offers have terms and conditions attached so double check them also.

      You might be able to do this once, But you will get declined soon enough. 3 homes loan applications within 12 months = bad client.

      • greater mimic on 24/10/2018 - 15:05

        Yeah I was thinking that may raise a red flag, probably not worth it. Costs associated with refinancing are really screwing me over for shopping around for a better deal.

  • Tdsr on 24/10/2018 - 13:19

    Hi Mortgagebroker

    I am currently with ANZ on their package with offset for owner occupier. My rate after discount is 4.04% with $470k left on my mortgage and an LVR of 87%.

    Would I be able to do much better moving to another lender?

    • mortgagebroker on 24/10/2018 - 15:02
      +1

      If your LVR is over 80% you will pay LMI when you refinance. Not worth the cost.

    • Adii on 24/10/2018 - 21:36

      When was the last time you requested valuation for you property through ANZ?

  • colaman on 24/10/2018 - 13:50

    Thanks for the AMA,

    We have 2 houses on 1 block of land, 2 loans in 4 names around $160K and $285K on a Westpac package (long story, will eventually strata the block). Been researching to get a good rate to change but a lot of the cheaper loan rates seem to only take 2 names on the mortgage such as Ubank. Then of course when I ring Westpac and ask for payout figure for exiting a loan and they ask why and I mention we are wanting to move the loan because of lower interest rates elsewhere, they say get something in writing from the new lender and contact us back and they see what they can do. I have a stubborn father in law who doesn't like change and his name is on the loan but happy to do all the work myself but with as little effort as possible. What would you suggest with our situation?

    • mortgagebroker on 24/10/2018 - 15:08

      Call someone at Ubank, I can't see why they wouldn't do 4 names.
      Their front end system might not know how to handle it.

      Pick a lender, most should do 4 names. Contact a broker or mobile lender to help.

  • Pootie Tang on 24/10/2018 - 14:18

    When I was 21 I racked up a 7k credit card debt, 5k personal loan debt and 1k phone debt. All went to a collector and was listed for all of them. Now when I search for defaults etc nothing shows up. I have been able to obtain 2 credit cards over the past 24 months and have managed them fine and I am currently saving for a house deposit via the super scheme pre-tax contributions. My question is, can I get finance for a house when the time comes? do I need to disclose those old debts from 2005?And the banks (nab and westpac) who lent me the money, will no doubt not lend me money based on my non payment history with them, correct? Any info would help.

    • mortgagebroker on 24/10/2018 - 15:12

      You are correct, don't apply with nab or westpac or any lenders then own (st.george, Ubank) as it may be declined.
      If it's not on your credit report you should be fine. No need to mention it. I suggest working with a broker and informing your broker of this and they will help you.

      Sounds like your doing good now, well done. Good to see you're using the super saver scheme.

      • Pootie Tang on 24/10/2018 - 16:32

        Thank you for the advice. It's a cracking scheme to reduce tax paid and to save. Cheers

  • Nutrino on 24/10/2018 - 14:22
    -1

    Has the bubble burst?

    • mortgagebroker on 24/10/2018 - 15:12
      +2

      no idea…
      Is there even a bubble?

      • Dr Techno on 25/10/2018 - 01:29

        In the universe.. maybe or maybe not, or whatever it is forever expanding into..

  • antonthenet on 24/10/2018 - 15:43

    When do you think there will be a movement in interest rates from the RBA?

    Will they go up or down?

    • mortgagebroker on 24/10/2018 - 15:50
      +1

      No idea. I think it will stay the same for now.

  • PaperplaneXXX on 24/10/2018 - 16:19

    Hello there

    How much I can borrow to buy or build a new home
    First home buyer

    4 years in Australia Permanent resident working full time as a service engineer .Single male 33 years old.

    before tax 107 000 annually

    deposit got 65 000 AUD

    what is the best bank to go with and how much is the Max borrowing capacity

    interest rates.

    cheers

    • mortgagebroker on 24/10/2018 - 16:27

      Sorry, I will need a lot more information than this.
      If you want advice please PM me.

    • pantsparty on 26/10/2018 - 08:43

      Are you looking to buy in Sydney? If so you may need a bigger deposit I suspect

  • natslovR on 24/10/2018 - 17:33

    Appreciate your time on this AMA, it's been a great read.

    I'm hearing anecdotally of houses coming back on the market (Brisbane) when the buyer fails to get finance and it seems to be an increasing occurrence.

    Have you seen an increase in failure to finance either through an increase in the number of your clients failing to get finance after having an offer accepted, or you are seeing an increase in clients to your business because they failed to get finance themselves elsewhere?

    Thanks

    • mortgagebroker on 24/10/2018 - 18:01

      Not really an increase in clients but a good chunk of my clients have failed to get finance from their bank or a lazy broker before finding me.

      I'm sure we will see more people selling their investment properties over the next 12 months as they can't afford it after coming off interest only.

  • Vent89 on 24/10/2018 - 18:09

    Thanks for the AMA.

    Question - Our broker has put us up for Bank of Melbournes advantage home loan (for a land + construction loan) with a negotiated rate of 3.89%, seems like a good deal. However I noticed in the loan papers they mention a $10 monthly administration fee. When I questioned our broker they confirmed with Bank of Melbourne that it's being waved under what they call "I can confirm that the Administration fee will not be applicable as the Building loan will be under the Advantage Package waiver".

    Should I just take their word on it? Have you heard of these waivers?

    The reason I prompted them on the fee was because I told our broker to put us through on the Basic Home loan by BoM which had no such fees, then they go and apply us for the Advantage loan - which I'm not too mad about because it seems like Advantage has more features (namely offset account) and we're on a negotiated lower rate.

    Cheers.

    • mortgagebroker on 24/10/2018 - 18:17
      +1

      In the loan documents, you should have got "terms and conditions" booklet/pdf for the advantage package. When you are on the package there will be no monthly “loan administration fee”

      If you have it in writing from you broker you should be fine. If they stuff up, they will need to fix it.

      Have a look into the $1,250 cashback offer BOM has at the moment to see if you're eligible.

      • Vent89 on 24/10/2018 - 18:33

        Oh fantastic - thanks for the heads up I will check eligibility - I'm told the loan is interest only during the construction so we may not be eligible but I've just asked them anyway, fingers crossed!

  • Unified on 24/10/2018 - 18:53

    @mortgagebroker, this is such a great post and you have been helping the community with honesty which ultimately a win-win situation for many. I have just moved to Ubank for an owner occupier property but will be sharing this with close family and friends for much more win-win situation. Keep up the great work :-)

    • mortgagebroker on 24/10/2018 - 19:02

      Thanks :)
      If anyone needs a broker or is looking at refinancing please contact me.

  • OzFrugie on 24/10/2018 - 22:24

    @mortgagebroker, thanks for the AMA.

    I have some questions which I hope you can assist me with.

    1. I have IO fixed loan for my IP, in which its IO and fixed period will end in early June next year (it is 3-year IO fixed)
      If I do nothing, what will happen to this loan? Will it become P&I variable investment loan automatically? Or variable IO?
      This is with Westpac.

    2. What is the process of getting this loan's IO period being extended since I want to keep it IO as it is for IP?
      How many weeks/month do I need to start approaching the bank (or look for other options from other lenders) to get the ball rolling?

    3. Someone above mentioned that he/she has difficulty extending his/her IO period after expiry with one of Big 4 banks despite good age and income.
      Is this consistent with your observation recently esp. with the current environment?
      Do I need to go through the whole loan application again (providing complete documents, etc.) or extending IO is more straight forward application?

    4. How advantageous is it to be a permanent employee rather than a contractor when extending IO period/refinancing/getting new loan?
      When I say 'contracting', I'd still be employed by a recruitment agency (so I will get paid by them via PAYG), but I will be sub-contracted to another company.
      Do lenders see this 'contracting' type as normal employee (because technically I am an employee of the recruitment agency) or self-employed?

    5. I recently joined a company as a permanent employee, but not quite settled-in yet. Meanwhile, there may be an opportunity for me to take up a 'contracting' role (like what I describe in #4), which will increase my income by 30% net.
      While obviously it is tempting to get more money, I am concerned that if I take up that role, it will impact my chance of extending the IO period on my loan as per #1.
      Based on your experience and knowledge, is this a valid concern or it won't matter much or at all? What will your advice be in this case?

    TIA

    • mortgagebroker on 25/10/2018 - 11:19
      +1

      1. I'm guessing you don't have anything in your contract that says the IO period is longer.
        Otherwise, it will become Variable P&I after the 3 year period is up.

      2. I would call up 2-3 months prior, all banks are different and their requirements are different.
        You most likely will need to do a full assessment again.

      If you are going to go to another lender, do it before the IO period ends. If its fixed like yours advice may be different due to break fees.

      1. Yes, it is more common now.
        Full assessment for most lenders.

      2. Permanent PAYG employee is looked on most favourably. Depends on the type of contract, employment period, how long you've been in that role.
        Depends on your history. If you are having considerable time off between jobs you may have some problems.

      3. Talk to your bank now. If your changing employment so close to applying/changing a loan, you are not doing yourself any favours.

  • asrey1975 on 24/10/2018 - 22:43

    Would you recommend being a mortgage broker as a career? Can you earn as much as someone in sales/realestate for example? any skills or experience you think would help someone start?

    • mortgagebroker on 25/10/2018 - 11:06
      +1

      If your a salesperson, go be a realestate agent.
      Not solely mortgage broker, but finance, yes.

      You have to be good with information and product knowledge.

      Do a certificate in mortgage broker, if you enjoy it do more education and then become a broker.

  • bargainess on 24/10/2018 - 22:44

    Hi OP, I’m wondering what your thoughts are on paying in cash vs getting a mortgage?

    My first home (unit) is settling soon.
    My parents are old school and don’t like the idea of paying interest to the bank so they want to help me pay off the entire $500k upfront. About half the money is sitting as cash in the bank at the moment, with the other half in shares.
    Would it be worth getting a mortgage with offset account instead, and deposit the $500k, thereby providing more flexibility and avoiding interest charges? Is that possible and what costs/what else should I be considering?

    Many thanks! Such a timely A2A :)

    • mortgagebroker on 25/10/2018 - 11:23

      Depends on your requirements on how I would answer this.

      Parents need to get financial advice, as this can affect their benefits.

      If I had the cash I would just pay in cash.
      If you need access to the cash later get a mortgage.

      No reason why you can pay a larger deposit and take out a smaller mortgage for some flexibility.

      • bargainess on 27/10/2018 - 15:49

        Thanks for your thoughts. What kind of benefits are you referring to? If anything, they will lose interest on the cash at bank and dividends/franking credits from the shares, if used to pay for the unit upfront.

  • n0u on 25/10/2018 - 03:27

    Thanks for the AMA!

    What are your thoughts on debt recycling, and in particular, using a redraw vs an offset? My understanding is it can only be done with a redraw and not an offset?

    • mortgagebroker on 25/10/2018 - 11:37

      Its the purpose of the funds that is important. The house you live in is not tax deductible. If I use equity from the house to invest, it is tax deductible.

      Refinance house, pull out cash to invest, that money is now tax deductible.

      See an accountant and financial planner.

  • Furious D on 25/10/2018 - 07:53

    I've heard of mortgage lenders giving loans without LMI to certain professions. Is that true? Are their rates still competative? We went with homestart finance to get on the ladder in SA, and although I love the way they work 5.4% seems hefty. I'm debating waiting until we've paid off 20% and have no LMI, or enquiring about switching now.

    Thanks for the info!

    • tighytighty on 25/10/2018 - 08:05

      Yes there is. Doctors, lawyers, Accountants etc. They are deemed reduced risk clients and generally the interest rates are quite competitive as well.

      • mortgagebroker on 25/10/2018 - 11:40

        Thanks tighytighty, Have answers this quest somewhere else already.

        Some people may be better off saving LMI and have a 1% higher rate. Depends on the scenario. do your maths… people look at rate too much!

        • OzFrugie on 26/10/2018 - 00:34

          No offense to all the accountants out there, but I always wonder why accountants are part of that 'special' group.
          I get that doctors and lawyers are highly specialised and earn top dollars, hence the inclusion, but I dont think it can be said the same for accountants.

          There are tons of accountants out there from lowly paid to highly paid, but to me it is just like any other 'normal' professions, e.g. IT probably being the most similar.

          Do I miss anything here? Who decides which professions are part of 'reduced risk' group as it seems universally-accepted?
          Will it ever be reviewed and changed?

          Also, do lenders actually check what your actual profession is? If so, how will they do that?
          Let's say I am applying for a loan and I say I am accountant, how will they verify (if at all)?

          • mortgagebroker on 26/10/2018 - 00:47
            +1

            @OzFrugie: Doctors are accepted at more lenders than accountants for the LMI waiver, so you are correct lol.

            No idea where this came from and don't see it changing. If anything it will disappear.

            Must show tax return, degree or registration with the Medical Practitioners Board of Australia or equivalent body
            Depends on the lender.

  • tighytighty on 25/10/2018 - 08:03

    Other than the big 4 are there any stable banks (Bendigo, BOQ, Suncorp etc) that give a loan plus an offset account without the hefty annual fee of 400 odd bucks per year?

    • mortgagebroker on 25/10/2018 - 11:42

      Yes, some charge $10 a month.
      have a look at Bendigo and BOQ

  • Davo723 on 25/10/2018 - 08:41
    +1

    What advice would you give to a young person looking to take out their first home loan to build?

    • mortgagebroker on 25/10/2018 - 11:43
      +2

      Go sit down with a mortgage broker.

      • tik tok on 25/10/2018 - 12:10

        Go sit down with a good mortgage broker.

        Fixed that for you. Finding a good one, may be a challenge. Unless you were hinting at yourself ?

        • mortgagebroker on 25/10/2018 - 12:31

          Wasnt hinting.
          YES, a good mortgage broker.
          A good mortgage broker is a first home buyers best friend.

  • Maybe on 25/10/2018 - 09:21

    Thanks for this super informative AMA.
    Is loan.com.au a good idea? They have all the facilities but no fees and a pretty good interest rate 3.72% with offset. Online reviews leaning towards positive but I'm still nervous that they might increase their rates drastically once you join.

    • mortgagebroker on 25/10/2018 - 11:46
      +1

      Bank don't increase rates once you join on purpose. If your rate has gone up, everyone with that products would have there rate increased also.

      Loans.com.au is owned by firstmac. Look them up.

  • countmein on 25/10/2018 - 10:26

    I'm reconsidering to refinance my home occupied loan (500k+) due to recent rate hikes. Unfortunately the way I calculate my apartment value is simply based on similar neighbours selling price and the LVR is just about 80-80.1%
    If the valuer from bank calculate the value lower that means it will above 80%. The question is would the LMI kicks in? If so should I just wait (to avoid LMI) and stuck with current bank?
    Noted the LMI already included in the principal when I first took the loan.
    If I go to a mortgage broker to go with their recommendations and later decide to cancel as the bank will charge LMI, would I have to pay his fees to waste his time?

    Another question, do you know what banks have no restriction of postcode/high dense population?
    Talked to one agent n one bank in the past, they simply said no after wasted 45 mins.

    • mortgagebroker on 25/10/2018 - 11:48

      Don't refinance if you are going to pay LMI.
      Go to a broker, different banks may give different valuations.

      A broker wouldn't suggest refinancing if it's not going to save you money.

      Need more information.
      If you need a broker PM me.

  • DGNR8 on 25/10/2018 - 10:37

    I have a 100% offset account for a $350k loan, currently I have more money than the loan in that account so I'm paying 0% interest repayments. Monthly account fee is $10 and the house is rented out. I'm living with my parents at the moment and I'm planning to purchase another property to live in. What do you recommend I do? Sell the rental property?

    • mortgagebroker on 25/10/2018 - 11:49

      This is your decision.

      Personally, I would keep it as an investment property.

  • suti on 25/10/2018 - 10:52
    +2

    From the Big Short:

    Danny Moses : So do applicants ever get rejected?
    Mortgage Broker : [laughs] Seriously? Look, if they get rejected, I suck at my job.
    Danny Moses : Even if they have no money?
    Mortgage Broker : Well, my firm offers NINJA loans - no income, no job. I just leave the income section blank if I want. Corporate doesn't care. These people just want homes, you know, and they just go with the flow.
    Danny Moses : Good for you.
    Mark Baum : Your companies don't verify?
    Mortgage Broker : If I write a loan on Friday afternoon, big bank will buy it by Monday lunch.

    Sound like Australia anyone?

  • Unrvl on 25/10/2018 - 11:24

    Hey,

    I'm not far from 30, married few years with a couple of kids. total household income is about 80k before tax.

    Had no savings up until about half a year ago. paid off all my small debt and got rid of credit cards. got about 5k in savings now and we are working towards a house deposit in a few years. any tips you can give me in my situation? better to wait 5 years to buy a house, or get one as soon as i can find finance willing to give me a mortgage?

    Also have you heard of banks using rental history as a savings history? we have a rock solid 6+ years of rent history and on time payments to prove that, wondering if that helps. thanks!

    • mortgagebroker on 25/10/2018 - 11:55

      Rental history can be used. You most likely will need 5% savings. If your parents can help you may have more options.
      First home buyer will help minimise costs.
      Save a much as you can as quick as you can!

  • Jfernandez16 on 25/10/2018 - 11:29

    Hi,
    I was after some advice seeing as you are a mortgage broker.
    My partner and I are building a new house. We have a broker who we have used previously and like.

    Just out of curiosity, we engaged another broker who works with the builder we are building with. He pretty much shit talked our previous broker and kept pushing for a bank west product as he said he can get us 29 base points off to a rate of 3.85% which is what the land loan we have with Macquarie is as well.

    We asked the new broker, why bank west and is there another product He would recommend. He basically got rude and defensive saying we didn’t trust his judgement, that he’s been doing this for a long time etc etc etc.
    Basically came off as an arrogant prick to me.

    The only reason I would go with bank west would be they have less draw down fees on a construction loan than Macquarie.

    When it comes to the new construction loan we would be at either 80% or 82% depending on valuations.

    Bank west would seem the logical choice as they don’t increase their rates for browsing over 80% where as Macquarie have a higher rate for lvr over 80%

    If you didn’t like the broker, would you still engage them?
    We spoke to our usual broker and he is not a fan of bank west and steered us toward maybe ME bank.
    What’s the difference between a bigger bank and a smaller bank?

    • mortgagebroker on 25/10/2018 - 12:00

      If you don't like the broker, don't use them.
      If you like your original broker, stick with them.

      Each bank is different in many ways.

  • lostn on 25/10/2018 - 12:33
    +1

    What percentage of commission do you make on all loans you broker?

    • mortgagebroker on 25/10/2018 - 14:10

      ~0.6 upfront
      ~0.1 per year ongoing paid monthly

      I have to pay all business costs, referral agreements, and aggregators cost out of this.
      Depending on the aggregator and what they offer they can take 5-70%

      • lostn on 25/10/2018 - 14:35

        Is that 0.1% on all repayments made?

        I was paying interest only on my homeloan, about 20k a year. So if I was your client, you'd be making $20 a year off me?

        Or is it 0.1% on the amount still owed?

        I went through a broker, and she was loaded. Had enough clients generating passive income that she didn't have to do a whole lot.

        I don't think she had an office, worked from home. So those business costs are minimal. Basically she advertised through word of mouth. My sister bought over 20 properties through her. The broker would make a house call to set up a contract. When not sealing deals, she had her time all to herself.

        • mortgagebroker on 25/10/2018 - 14:48
          +4

          On the amount still owed.
          so 0.1% on a 350k loan is $350.
          If you had 350k in an offset account though I would get paid nothing.

          I need more clients like your sister.

  • TheTaxMan on 25/10/2018 - 13:02

    I have a loan with CBA (about 5 months old) at the moment and I think due to the July 1 changes, my minimum repayment increased by $40 per month. My loan term increased as well to 31 years if I don't change the repayment to the new rate (they increased the interest by 0.1%). I also have redraw available for the next two years.

    Should I increase the minimum repayment?
    How am I affected with the changes to redraw? I plan to put all my savings in the home loan to decrease the interest. I cannot apply for an offset loan as I am with the introductory rate.

    • mortgagebroker on 25/10/2018 - 14:12

      You should talk to CBA about this directly. I would hate for you to lose money in redraw if they change your term back to 30 years.
      Apply for offset once intro rate ends.

  • missnellie on 25/10/2018 - 13:42

    Thankyou for this AMA, I've found it really interesting.

    My question is about refinancing investment loans. We have 4 properties - our principal place of residence and 3 very modest investments.
    We are plowing savings into our PPR redraw and have around 400k still to pay off.
    Our investments are all P&I and have equity of around 60k, 30k and 100k.

    I am wondering if it is feasible / a done thing to refinance investment loans to increase them and take the equity out in cash in order to create a deposit for a new investment loan for another property?
    I know it would be dependant on our ability to service the loan, however could we then claim the increased negative gearing interest amounts as a tax deduction or is this a no no?

    • mortgagebroker on 25/10/2018 - 14:15

      If it's for a new investment loan then yes. if its to reduce your PPR then no.
      You need advice on your setup, you can get much more tax benefits if setup correctly from the start.

      Please PM me.

  • T1 on 25/10/2018 - 14:28

    Hi,

    I'm currently working for a Non-Profit and a portion of my wage is salary sacrificed and is exempt from FBT. I might be looking to refinance in the next year for a larger house and I'm wondering if lender's will base my wage on the 'grossed up equivalent'

    Thank you.

    • mortgagebroker on 25/10/2018 - 15:34
      +1

      Most lenders will take into account the pre tax portion of income separately. Some lenders only allow up to a certain amount, some will gross up the income, they all treat it differently on a servicing calculator.
      Suggest you use a broker for this one so that they can make sure you are using the right lender that suits your situation.

  • koshjuah on 25/10/2018 - 15:20

    Not sure if this question is appropriate. I am interested in the career path of being a mortgage broker. Is there any advice you could give for someone who has spent most of their time in retail, and is looking for a change of career to being a mortgage broker? Thank you!

    • mortgagebroker on 25/10/2018 - 15:38
      +1

      Go complete the Cert 4 in Mortgage Brokering first.
      Or go work in a mortgage brokers office in a junior role first.

  • Skramit on 25/10/2018 - 15:29

    Whats your pay structure like as a broker either in general or specifically with some example banks.

    Do you rely on the long tail kick backs if a customer stays with that loan for a few years, or are you more interested in the up front commissions at the time of settlement?

    Whats better - quantity of multiple signups, or quality as in people stay with the deal so you get the long tail income?

    I asked some specific questions there but really just interested how you get paid and how much you make monthly on average before tax.

    • mortgagebroker on 25/10/2018 - 15:46

      I look at it as I'm more interested in helping people and I get paid for doing it.
      If my client is happy, I'm happy.

      Quantity & Quality.

      I get paid upfront commission and ongoing commission.

      • Skramit on 25/10/2018 - 15:49

        So are you earning 6 figures?

  • [Deactivated] on 25/10/2018 - 16:06

    Interesting AMA - thanks OP.

    I have a home loan with ANZ in two parts:

    1. Owe ~$355k. Variable 4.06% less 0.15% discount = 3.91%
    2. Owe ~$593k. Fixed at 3.85% until Nov 2019.

    TTL ~948k. Home is conservatively worth $2.3m. No issues with servicing the loans, my credit rating is 841.

    I called up ANZ a few months ago and was told. 1) I can break the fixed component at no cost - as rates have gone up there's no break fee. 2) They didn't really seem that interested in whether I stayed or left.

    I'm looking to fix it all for another 3 years as I value the certainty of locked in rates, not too fussed about offsets and would prefer to stay with ANZ but will move if I have to.

    • mortgagebroker on 25/10/2018 - 16:16

      You can refinance with ANZ if you want to stay.

      not ANZ:
      3.69 or 3.64 variable
      3.89 or 3.79 fixed

      If you want to refinance please PM me.

      • [Deactivated] on 25/10/2018 - 16:18

        OK, will consider my options. Thanks

  • Biskitt on 25/10/2018 - 18:07

    We’re hopefully looking to buy once our permanent residency comes through and have approximately $200k equity in a property in the UK that we are currently renting out to my bother. Just wondered if any lenders take this into consideration when assessing risk etc? Thanks for all the great advice so far!

    • mortgagebroker on 25/10/2018 - 18:13

      It will be treated like any other asset and liability.
      its common for income produced from overseas will be shaded to 70 - 90% by most lenders.

  • belongsinforums on 25/10/2018 - 18:21

    DINK. How much money do I need to save to buy a modest house in Brisbane?

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