Hi guys,
Kind of new to this whole home loan application. I was wondering - would you recommend brokers like aussie home loans or lendi over big 4 banks?
What would be the pros and cons?
Home loan Application - Go with Major 4 or brokers?
postform on 26/11/2021 - 11:08
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Or that too. I'm just wondering what are the pros and cons of different ways to get a loan.
I'm also wondering if there are fee based agents?
I understand that most agents get a kick back from the banks hence conflict of interest.
Can you please name a few lenders with attractive rates and are not through brokers ?
Thanks
Broker - they have access to a wide variety of lenders and can find you the best deal. It won't cost you any more than it would have going direct. You can also apply to a few small lenders that don't use brokers as well if you want, then just go with whatever is the best deal. Don't go straight to big lenders as you don't have the buying power to get a good deal that way. Let the brokers do their job.
Do you recommend any brokers in particular?
I used Aussie, and a small one in Bathurst that I don't remember the name of as it was a long time ago. The small one in Bathurst was really good, Aussie was also really good except that we got on the middle of an internal dispute when we came back to them a few years later for a new loan, and we went back to the office we used previously and then got in trouble because apparently we should have contacted our previous broker direct not gone through the office and she was mad 🤔 If we should have used her again surely the office would remember our names and send us to her not to another broker 🤔 So her dispute should really be with the receptionist who made our appointment. But oh well.
one to Many, Many to one
Also, was in the middle of editing when you replied - each lender is more or less friendly to certain circumstances than others. For example, most won't count Centrelink income at all and some will, most will discount income from self employment and some won't, most will discount income from share trading and some won't, some will be more lenient towards contacting positions or jobs you've only recently started etc. Brokers know which banks are more favourable to certain situations and can try those first instead of what you might do which would be to have to try all of them taking forever, or settle for the first one you apply for and not know you could get a much higher max borrowing limit or less fees or interest from some other lender who looked on your circumstances more favourably
I would do my own research first using tools like RateCity and similar.
Then you can go into any discussions with any bank or broker armed with some idea of what is out there.My experiences?
Started with a broker late 2020, they were slow. Started application via Westpac and was preapproved prior to broker (via Westpac). Tried to buy multiple places, extended pre-approval. At times I wasn't able to get a hold of Westpac with weeks (3+ weeks at once stage) before replies.
Was scared Westpac wasn't able to move fast enough so spoke to 86400, pre-approved within 2 days. Found a place a month later and had full finance sorted within the week. Was completely stress free compared to the broker and Westpac. Rate via 86400 was better than broker and Westpac AND no LMI for 15% deposit
https://www.news.com.au/finance/real-estate/buying/queenslan…
“`
Westpac agreed to reimburse Mr Trau and Ms Goyder as they acknowledged they had made a manual processing error.This week, Mr Trau and Ms Goyder were given $100,000 by the bank. The cost covered the deposit as well as their solicitor fees. The bank also factored in $5000 each for the stress and anxiety it caused them over the last few weeks.
“`
Oof what a mess. Why are settlements required to happen on a specific day anyway, instead of say "any time within the several week settlement period"? It's just asking for trouble like this to happen…
The sellers added that they “were devastated at this eleventh-hour request as were due to fly interstate the very next day and our beloved pet and all our worldly possessions had already been packed and sent. We had also intended to use this money to settle on a purchase interstate”.
And forging another sale contract with another party would be quicker than a one day extension? Sounds like they either wanted the extra cash, or they wanted to "punish" the buyers for not fitting into their absurdly risky movement plans (because no process like this has ever been delayed, ever).
Here's another one - missed cutoff by 13 minutes
(https://www.news.com.au/finance/real-estate/buying/brisbane-…)
A Queensland woman has been left devastated after losing her dream home, and potentially her entire $29,000 deposit, because of a banking error.
Dr Loretta McKinnon, a 43-year-old epidemiology academic, paid $580,000 for a three-bedroom, one-bathroom Brisbane home that was meant to settle on September 22.
However, she claims the Commonwealth Bank was too late to finalise the settlement because an incorrect box had been ticked in the documents.
By the time the bank fixed the mistake and the documents were processed it was 4.13pm, 13 minutes after the 4pm settlement deadline. As such, the contract >was terminated after the seller refused to grant an extension.
“Thirteen minutes was what broke the deal,” Dr McKinnon said.
Her $29,000 deposit is now in limbo while the lawyers fight about whether the seller is entitled to keep it, as per Queensland law.
My 2 cents - my experience with the broker we contacted (in 2008) was not good. After submitting all our financials, he came to the conclusion that we will not get a loan. He asked us to collect more deposit and contact him in a year or 2. Soon after this, my wife approached the bank we are currently with and the lending manager was extremely helpful. He looked at our numbers, gave us a pre-approval and eventually financed our property. It is true that brokers have more options, in my opinion they will always push you where they get higher commissions. Might not always be the best for your circumstances. My suggestion would be to go to a broker and also contact some banks directly. Then weigh up all the offers and make your decision.
approach those smaller lenders with lower rates directly. I tried to use brokers but found that they don't usually have links with those smaller lenders which usually carry lower rates. However, if you don't have time to research or shop around, brokers can be very useful.
I have been using an independent broker that runs his own shop for the last 15 years, not sure if he has staff as I always speak to him directly. My interactions with him are always a short email about what I want to do followed by quick chat and then a day later he has my funding options.
I'm about to upgrade my PPOR so thought I would give the big 4 a chance. CBA and NAB had me on the phone for 2 hours each and offered me less on a worse rate. NAB wanted me to move all of my existing accounts over to them and then after 6 months would offer funding.
I'll never think about doing stuff without my broker again.
If you are on PAYG and have ample servicing then going direct to a bank will work. If you are complex i.e. self employed or servicing is very tight then a broker will give you more options.
From a banks point of view if you go direct or broker it doesnt matter, either they pay the broker a commission to do all the paperwork, or they pay branch cost + salary + commission to the bank's own staff to manage the paperwork.
All the smaller lender that dont use brokers are basically paying staff to handle the application for you so they are paying advertising plus staff cost. They serve a very specific segment of the market rather than the general market.
Why go with either? What about a smaller lender that doesn't use brokers?