Those of you in the know, you reckon you can get home loan bargins by looking yourself and dealing with banks or going via broker who knows the in and out of all deals out there ?
Home loan bargins via broker or solo ?
bargrin on 05/03/2012 - 20:50
Comments
Check infochoice.com.au or similar for best deal at the moment. Probably ubank.
Ring your main bank and ask what the best rate they can give you is. In my experience it won't be as good as what you find on infochoice. See if your big 4 bank will beat or come close to the smaller lender, repeat with as many big banks as you have time for then take the best deal.
If you end up with a smaller lender make sure you Google them to make sure people aren't having any problems with them. i.e there's a thread on whirlpool about myrate lifting rates once you have been with them for a while.
I moved from myrate to ubank about 6 months ago and haven't looked back. I had existing relationships with westpac and anz, I rang both when I was about to move to ubank and they more or less said thanks for calling but we can't come close.
If you have the time (and don't mind a potential hard sell) you could also throw a broker into the mix, just keep in mind that the bank will be paying the broker a commission for the life of the loan so theoretically they should be able to offer a better deal if you approach them directly.
Don't ever go through a mortgage broker, it's a waste of time & they don't know jack about lending policy or getting you the best deal. Most brokers only take your loan application to one lender & then match up what you need with what that lender has best on offer. Brokers have no required education to do what they do, are not registered professionals, have no enforceable required code of conduct & other than a brief online course with the lender they represent, they often wont have really much clue at all.
What you need to do is go into any of the major bank branches and have a free sit-down with a finance or lending manager to discuss what type of loan you need. Then you take that info, and compare all the lenders interest rates to see what loan package best suits you & your financial position. Walk back into the bank/lender you like best & get them to beat the best deal you've been offered. Haggle & haggle, because they can use their authority to give you a good deal, you just have to ask for it. The bank is gonna make at least $60K profit off any loan you bring to them over $300K, so they will become competitive and offer you the right deal if you chase it.
The reason why you go to a branch finance manager, is because those bank/lender managers have the direct ability to apply a whole raft of discounts and competitive advantages to your loan, that a broker will never be able to obtain for you, other than the rare occasion a bank state lending manager grants a few discounts to the customer, on behalf of the broker. All you have to do to get them is ask - it's about that difficult. A broker on the other hand wont know that information, nor do they have the ability to give that to you, unless they very specifically investigate the lending policy for that loan & seek approval for it through a bank/lender state lending manager - of which they only rarely agree too.
To give you an idea of why brokers are fundamentally a waste of space, the average lending and credit policy guide for a loan at most banks/lenders is upwards of 600 pages long. Most banks/lenders have well in excess of 50-100 loans. Do the math on that when the broker claims to be able to shop your application around to 30 lenders for the best possible deal & know how to do it!!! You cant help but laugh in their faces, their so obviously talking shit. It takes most educated bank staff and lenders upwards of 6-12months before receiving lending authority for simple stuff, another year for meaty loans & a few years more after that of on the job training before they can become credit/policy people - and that's just dealing with ordinary loans. Working in & out of banking for almost 10 years, I could count on one hand the amount of brokers who'd ever even bothered to reference lending policy before submitting home loan applications for their clients. 5% of all their submissions would be declined right off the bat because they were applying for incorrectly structured loans, another 10% then declined because they mislead their customers into thinking they had any chance of servicing (being able to meet repayments) the loan. A good 20% of applications sent back to the brokers because they weren't even applying for loans that the customer actually wanted (a common occurrence, as poorer value loans for the customer = better percentage point for the broker) Another couple percent we decline right off the bat because the retard brokers apply for the same loan at multiple lenders, or at 5 other lenders after being declined the first time (doing either of these in a short succession will result in a virtual credit-fault against your name, stopping any lender from even issuing you a credit card, let alone a home loan). When you sign away your financial right for a broker to make financial applications on your behalf, you could be in for all sorts of trouble & these people act in a virtually unregulated section of the finance sector. Anything they do that screws your credit reporting or leaves you with a crap loan/deal, you are up the creek without a paddle.
End wall of text !
That's a bit of a glass is half-empty view of mortagage brokers…all of the good ones that I know have come from the banking industry having spent years with significant loan delegations/lending portfolios! Yeah, there's some half-assed cowboys out there, but you can't tar the real professionals with the same brush!
It's true that you can negotiate your own good deal if you shop around & talk turkey with finance managers, but brokers really come into their own for those folks for whom it might seem on paper (strictly speaking) might have difficulty servicing a loan that in reality they would have no problems managing. Direct bank lending policy can be somewhat conservative to say the least! ;)
Sounds to me like you're either a banker or have had a bad experience with a good-for-nothing broker. This doesn't mean they're all tarred with that same brush.
While anyone in their right mind will shop around for the best loan they can get to suit their circumstances, it's not always easy finding a bank that meets their needs, based simply on the blurb available on the net.
We're currently in the process of making a home purchase that we're expecting to settle around the middle of the year. I'm totally over ringing banks and finding that they can't meet our needs, so have contacted a broker, who subseqently sent out a list of what we need to various lenders who have responded on whether they will or will not be suitable for our needs.
Too easy, and I no longer need to wait on hold for endless periods then wait for hours or days for a return call from someone who couldn't give a rats. In the major cities where competition is greater the loans officers might be a bit more interested in the product they're selling, but in a regional area it seems they somehow assume they're going to get the business anyway, so don't need to bother.
As an aside, although the same company I am currently dealing with has an office here in town, I'm dealing with an office 100k's away, as the local person when we approached him a few month ago was not forthcoming with some really basic info and it was only after the points were raised that he bothered to go into it.
Oh dear Infinite sorry Matey but i'm going to have to highly disagree with you there. There are useless Brokers out there, no question about it but find a good broker and they are worth their weight in gold! We used to go directly to banks but unless you're a mum and dad buying your first home or even 2nd home/investment property, they're knowledge is fairly limited we have found.
Seriously, how much of a discount can a Branch Manager give a client? A small discount in rate or waiving an application/valuation fee aint worth being stuck with a home loan where all other criteria are not competitive surely?
Yes banks process alot of loans…..but that don't make them any good at them or knowing their own products!! The number of times we have rung up banks to be told a term in their lending policy only to find out that we were given the wrong information…oh my gosh it happens to us almost every single time (we have many loans) and its incredibly frustrating to realise that these bank people don't even know their own products! We have on many occasions corrected or told the lending managers how to structure the loan because they have no clue. So before you accuse the Brokers for misleading their clients about their application being approved, maybe its because the Brokers are being fed the wrong information from the Banks themselves!
So ummm, yes there are crappy brokers no doubt (obviously you've experienced a few of these) but sounds like you haven't met some of the outstanding brokers out there that know their stuff and quite often moreso than the banks themselves :-)
"Seriously, how much of a discount can a Branch Manager give a client? A small discount in rate or waiving an application/valuation fee aint worth being stuck with a home loan where all other criteria are not competitive surely?"
Not Branch managers - Finance Managers / Lenders at the branch. Things they can offer or give you on almost any home loan that a broker cant do, include anything/everything from a 0.8% discount on the life of a loan, waiving establishment fees, waiving maintenance fees, waiving servicing fees, waiving portability fees, waiving top-up fees, waiving switching fees, waiving future discharge fees, etc…. The list go's on. One of those discounts even with a 0.4% discount on an ordinary loan is a $2K saving a year for the life of the loan. They can also provide you with complete fee-free transaction accounts and waive of any fee's outside of interest on any credit cards. Again - good yearly savings that will add-up to big numbers over the life of a loan and things that no broker can offer, as the bank pays your broker over the life of the loan instead of giving that money back to you in the form of loan savings.
People seem to completely miss the point here. You will never EVER get a better deal through a broker, no matter what you think. Because the lender you go through pays the broker a commission for your loan, on the WHOLE life of that loan. The bank will happily give you the EXACT same loan the broker is offering you, but with actual savings and benefits to YOU (instead of the broker) if you just ask for it & ditch the broker. For a lender, dealing with a broker is time consuming, involves extra work and multiple extra steps to get a loan approved, then they have to pay them a commission. It's in the lenders interest to have you walk through their branch doors and just ask for the exact same loan, cutting out the broker all together. The only reason why lenders keep brokers around, is because brokers play up their independence, but almost always take your loan to just one lender regardless (as stated before, your credit rating would be screwed if they actually shopped your application around).
We'll have to agree to disagree here i think :-)
I believe a 'good' broker is worth their weight. If someone is buying their first home and doesn't have any other assets, well its not going to hurt them going directly to a bank. But for someone who has multiple properties or has a more complex portfolio, this is where a Broker can greatly assist and often get you a better deal (overall). Don't forget the big 4's are not the only banks out there and there are many many many lending institutions/funders out there.
Good to remember also not to stick all your eggs in the 1 basket. Spread your portfolio/risk around if you're buying multiple properties.
I wanted/want to change my home loan to something better and am going to see my broker, but when I was on the phone to him I really got a bad feeling that he wanted to sell me insurance for life/work cover and sort out my super bla bla bla :\ It has got me thinking that maybe I dont want to see him at all now and maybe I should just leave my loans alone.
Im with Homeside and it seem to be always at the top for the best place to get a loan so im not sure what to do.Get a second opinion for sure.
If a Broker is trying to hard with the life insurance etc, move on. His/Her focus should be on the finance side of things. Can give you a couple of Brokers we've used who are at the top of their game (Brokers can work with Clients from anywhere in the Country so don't be put off by a Broker who's not local).
I'll add my 2c.
For me brokers are useful to garnish information from, and scope potential products but their flaw is that they are not always motivated by the same things you are.
For example if lender #1 is offering a slightly better commission then lender #2 for your situation, and they have similar offerings you may only ever get to see the offer from lender #1.
Working out what options your really need (e.g. fixed, variable, split, offset, redraw, etc) will determine 80% of your loan structure, brokers are good at explaining the various options and benefits if you're unsure.
So as per the comments above if you know how you want to structure your loan, then through the power of the internet you can do a lot of ground work yourself.
If your looking for a simple variable rate mortgage with no fees & redraw, ubank is my pick (I'm refinancing with them at the moment).
This may also help - http://www.ratecity.com.au/home-loans
thanks for all info, be great if you could see which banks offer highest commission to brokers so you can judge the advice. The broker I am dealing with seems very knowledgeable and I am told he has won a few broker awards, if there is such a thing and has lots of little tips about each type of product.
Also I thought it was easier these days to switch loan providers with new laws Govt brought in ?
So if I get into a bad deal I can switch to another provider, but only if I havent gone into a fixed rate which then means some crazy long expensive calculation needs to be done to get me out.…now just need to predict which way rates are going for the next 30 years!
EDIT: Also Bankwest looks like a pretty competitive lender, any body got horror stories with them?
we were looking to go with bankwest, until we made an appointment with a mortgage broker. He put us on to Macquarie and ING, given our circumstances, then recommended Macquarie. No application fees / ongoing fees though there were some minor administration fees at the start. They are worth checking out.
http://www.macquarie.com.au/dafiles/Internet/mgl/au/docs/rat…
Thanks, ING also look good with a fixed 5.89% for 2 yrs
why bargin people ??? aaaggghhh it is BARGAIN … it's even spelt out in the web sited freakin name fur krists sake!!! :-)
anyway… re Bankwest… a recent post on here.. not sure how it accurately represents the bank…but it is something.
http://www.ozbargain.com.au/node/65222It would help your cause if you gave a rough indication of your area as some Building Societies are very good too… one around here especially.
I am thinking of going variable for the flexibility and that uBank variable at 6.23% and no fees even if you want to leave sounds pretty good!
Cant find too many complaints about them.
stay away from NAB or uBank …. I was with NAB for a year … negotiated a good deal (0.9% off) … but let me tell you the customer service is almost non-existant.
In my case the mobile home lender left her job, and I was left to deal with the branch Manager .. and I could not get a single thing done w.r.t my loans until I sent her like a dozen emails, and eventually had to send a complaint to NAB to get it resolved (which still hasn't happened … a week in)
Im now after a good discount and decent customer servicejust my 2c
It looks like uBank is only for people with a current loan and want to refinance and not those looking for a new loan….seems kind of dumb thry wont allow you start a new loan, must be because they want other bank to do all hard work of credit checking you and valuing property then they slip in with cheaper rate.
I think this is because new loans are more of a hassle then refinancing, they will still value your property and credit check, however they don't have to mess around with people who start an application but find they can't complete the loan because they couldn't get the finance, inspection failed or some other reason.
This is part of the reason their rates are cheaper (and the online model).
Bargrin,
I think you are in Perth. Call Momentum Wealth in East Perth. They are a suite of real estate companies and can give integrated advice.
If you have a simple structure of the loan, you can go to the bank and ask for disc or go to no-frills broker for cashback. I am with ANZ breakfree package and be able to negotiate 1% disc, may be more 1.1% if the loan > 1 million with LVR < 80%
If you are a complex investor with multiple loans/structure of the loans, I prefer to use an experienced mortgage broker to deal with it.