Hi Guys,
I'm looking at hopefully buying my first property this year (well i've set myself that goal anyway). I want to get a home loan but i dont know whether its best to go straight to a bank or another option. If so, what sort of rates should i be negotiating for? I'm really not sure what the best way to approach this is. Any help would be much appreciated =)
Negged for posting the correct information about financial advice. Sigh.
I have no idea why ppl have negged you for that!… It is sound advice… I like everyone's advice so far!
Hey kimba88, do you have a work union that might have already negotiated a deal with a banking institution or mortgage broker? I went directly through a bank because of that.
A mortgage broker is just a sales person. I'm sure there are some good ones out there but its in there interest to push you towards a mortgage which offers them the best commission.
There a lot of deals out there that don't deal with brokers so can offer a better rate, i.e ubank.com.au (not suitable in this case as refinance only) or loans.com.au. See infochoice.com.au for more.
Also depending on the size of the loan and how long you have been with your bank you may be able to getting a better rate by approaching your bank directly, after all they won't need to pay the broker if you go direct.
+1 speak to a reputable broker. Hunt around online ( other forums) you'll find a good one. It goes beyond rate- though that's important. Think about strategy, structure of the loan, understanding exactly the whole mortgage process. A bank will NOT tell you these things
What do you mean by strategy, structure of the loan and understanding the whole mortgage process? I'm pretty clueless to all this since it'll be my first. I'm hoping to get it right the first time.
Ubank - no frills - 5.12%
That's certainly a very interesting offer - too bad it doesn't come with an offset account.
Those who are responsible with their finances will miss that.
It's also only available for reinfance. As a first loan uBank (currently) will not help you. As for not having an offset account, whilst being useful offset accounts are not essential given there is option for redraw.
If its an investment property then offset account is far better (financially) than any redraw facility.
I am not an expert either so I am not going to get into it too much, other than recommending you see a professional. FYI, mortgage brokers will not charge you anything as they take their commission from the bank which provides your loan so you aren't going to be out of pocket.
Structure would be how the loan is physically arranged - single person, split, holders and guarantors ?? I know nothing about your situation, so speak to a broker.
Strategy - how much you borrow and how you intend to pay it back - this can greatly affect the life of the loan. advantages and disadvantages of paying LMI, and so forth.
you obviously have a lot to learn and this will no doubt be the largest cost in your life so go see someone who has an interest in educating you and you will be much happier and better off.
There are a lot of home loan products around. It pretty much comes down to what frills you want in your loan versus the interest rate. If this is your first mortgage what could be important is LVR (loan to value ratio of more than 85% can see you having to pay expensive insurance which only protects the banks). The best advice I can give is to read as much as you can about different types of loans before making any decisions on brokers . Banks can give you good advice even if it is about their products only. There are some bargains to be had in fixed rate loans at the moment and whilst it's a gamble on rates it also gives you the security of knowing how much you have to pay for the period of the loan. Also have a look at wealth packages.
I've been to several mortgage brokers. Although they claimed they "have access to hundreds of lenders", in reality they only have a limited number of lenders on their "panel" - i.e. That they actually use. I find better deals than MB's by using www.infochoice.com.au - just start a spreadsheet or table, start clicking on the links to the terms and start reading.
I used a well known mortgage broker for my first property but after 1 month (2 weeks before settlement), the broker could not finish my loan.
I went straight to the bank & was told no application was filed. I asked for one right away and evaluation came out but lower than what I want.
I went to one of the big 4 bank who vouches to offer the lowest rate among big 4 and evaluation done in 2days & according to purchase price.
Always go straight to bank for mortgage because it is the fastest process and the most guaranteed to get done in time for settlement. Once loan is settled, u have to deal directly with the bank anyway, so why not from the get go.
Message me on how to get loan directly with one of the big 4 and still get cash back for your loan. Hope this helps. U don't need a broker for rate comparison. Rates are just an online click away or a phone call away
Hey mate..whats your trick for direct cash back?
PS: ur PM is off.
I'm interested in this one too? I'm thiking something like YourShare, Refund Easy or iRefund but have never used their services. Has anyone tried this? Do you need to sign up before you've purchased the loan, etc?
Rates are only one piece of the puzzle though, other fees, loan type etc also need to be taken into consideration.
look into matesrates, they pass on the trailing commission that most brokers keep for themselves. Saved me a few years of both of my loans. Surprised more people don't know about these guys.
Choice have a list of the "best rate" for home loans available at http://betterbanking.choice.com.au/ditch-and-switch but its important to know that it only considers the rate like Cople mentioned 2 posts up.
Your best bet is go speak to your accountant, work out if it's in your interest to negative gear the property and what not. Also how to structure your assets to get the best loan amount possible. Get all your important sorted and then sit down and compare everything. You are most likely going to be tied to the loan for the next 5-10 years so make sure its a good one.
Also, if you do get a loan and see a better rate else where that offers to pay your switching fee (like NAB did a while ago) make sure you ask for the "Customer Retention Team" when you call up. They have the power to match rates, cut fees and what not to "keep" your business. Was helping my sister a year ago with her loan as her bank didn't pass on any rate cuts like the other 3 big banks did, the team was able to lower the rate by 0.5%.
I would suggest one of the Big 4 banks. When the financial crisis hit, the smaller lenders had to close shop or unable to accomodate further lending. You wouldn't want to be in that situation. The rates between them are comparable but I would definitely suggest to contact a mortgage broker if you do not have any clue. The broker would be able to tell you which one of the big 4 is the cheapest because from time to time, they have special pricing discount which is not advertised
Wow, quite a bit of info here! Thanks everyone so far! More opinions are great too!
Whats everybody's opinion on having a buyers agent to look for a cash positive property, before they come out on the market? Or are you best just looking around yourself?
I really don't know where i should start once i finally get a loan too! Not sure whether to go new or old. At the moment i probably wouldnt be able to afford to move out into it straight away.. i'd probably have to rent it out first.
I still haven't managed to get a home loan approval yet, but i've definitely taken all this info on board. I'm looking at buying a couple of small investment properties and hoping i can use the equity from the first, to help purchase the second.
So far, it sounds like one of the big 4 banks is the way to go with a loan - whether i use the mortgage broker to negotiate or not is the question.
Also, as above, has anyone had any experience with buyers agents and are they worth it? If not, where do you find your investment properties and what minimum yield to you settle for?
We got a pretty good rate through ING. They're not a big4, but they're a large institution.
Speak to a mortgage broker.