Need home loan advice

[Eastern Rangers]

Thanks. Didn't get the house in question as the subject to sale offer made their offer subject to finance but I'll look into the "split loan".


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[craffles]

Hey guys is still possible to get home loan for a place with 5% deposit with current lending criteria

My partner and I have significantly accelerated our earning capacity the last two years and can easily service the mortgage but getting 20% is going to take a while. Looking in the 550-750 range in Victoria and dont care about LMI if it can be added to the prinicpal

 

[PieLebo87]

Hey guys is still possible to get home loan for a place with 5% deposit with current lending criteria

My partner and I have significantly accelerated our earning capacity the last two years and can easily service the mortgage but getting 20% is going to take a while. Looking in the 550-750 range in Victoria and dont care about LMI if it can be added to the prinicpal

Hi mate, the major banks won’t capitalised the LMI ontop of a 95% lend. You’d have to also contribute the LMI upfront if you only had a 5% deposit. Plus the LMI for that much would effectively be the other 3-4% so you’re better off saving that little bit more, borrowing around 91-92% and capitalising the LMI on top so the total loan doesn’t exceed 95% of the purchase price.

 

[PieLebo87]

Don't get a home loan, that's my advice

Debt is good, if you’re smart about it.

 

[craffles]

Hi mate, the major banks won’t capitalised the LMI ontop of a 95% lend. You’d have to also contribute the LMI upfront if you only had a 5% deposit. Plus the LMI for that much would effectively be the other 3-4% so you’re better off saving that little bit more, borrowing around 91-92% and capitalising the LMI on top so the total loan doesn’t exceed 95% of the purchase price.

Thanks for the detailed response. I'm pretty uneducated in this space. For a $650k place what would you recommend as a minimum to have saved?

$80k?

 

[chargers 09]

Hey guys is still possible to get home loan for a place with 5% deposit with current lending criteria

My partner and I have significantly accelerated our earning capacity the last two years and can easily service the mortgage but getting 20% is going to take a while. Looking in the 550-750 range in Victoria and dont care about LMI if it can be added to the prinicpal

Speak to a mortgage broker mate who will have access to some second tier lenders:

I.e. Liberty, Pepper or Bluestone.


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[craffles]

Speak to a mortgage broker mate who will have access to some second tier lenders:

I.e. Liberty, Pepper or Bluestone.


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If I use a broker now do I have to go through them for the eventual loan though and how do they charge their fees?

Really Sorry for the dumb questions I'm very green in the property/money game.

 

[chargers 09]

They’ll be capitalised mate (the Lenders application fee) the lender pays an up front commission to them based on the size of the loan. Do you won’t pay a cash fee or anything like that.

Very good service for the consumer now really, they will disclose all this to you obviously as well as required under NCCP act before they lodge anything.




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[chargers 09]

If I use a broker now do I have to go through them for the eventual loan though and how do they charge their fees?

Really Sorry for the dumb questions I'm very green in the property/money game.

What do you mean go through them for the eventual loan?

Always worth using them mate IMO as they will have your bank on the lending panel as well as 30 or so other options.


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[craffles]

What do you mean go through them for the eventual loan?

Always worth using them mate IMO as they will have your bank on the lending panel as well as 30 or so other options.


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Thanks. Ill book into see a broker to understand my situation better.

Any thoughts on the vic market at the moment and the next 12 months? Looking far outer east (Lilydale, Mooroolbark, Ferntree gully and dandendongs areas)

 

[chargers 09]

Thanks. Ill book into see a broker to understand my situation better.

Any thoughts on the vic market at the moment and the next 12 months? Looking far outer east (Lilydale, Mooroolbark, Ferntree gully and dandendongs areas)

I’ll stay well away from giving you property advice mate! Sorry I can’t help you further in that regard, just not qualified to give property speculation advice. Everyone seems to think they should have a say, but very few are qualified.

Bottom line is, seeing a mortgage broker for a home loan consultation won’t hurt- in all likelihood will save you money.

At least they’ll be able to guide you in the right direction and give you a thorough understanding of the process/what is involved etc.

Hope this helps mate!


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[PieLebo87]

Thanks for the detailed response. I'm pretty uneducated in this space. For a $650k place what would you recommend as a minimum to have saved?

$80k?

That’s a far better situation than the previous scenario. Bear in mind that on top of your contribution to purchase, you also have the Stamp Duty to cover which will be around $30k. The banks will be a lot more comfortable with providing you lending if you’ve got at least 10% contribution from your end.

 

[PieLebo87]

Also, re brokers, whilst they may give you far more options, they may not be the best path to take when getting a home Loan because as soon as you’ve gotten the loan (and they’ve gotten their commission) you’re on your own. If you go through the bank directly, you build that relationship from the get go and when it’s time to review your loan in 12-24 months time, you’ve got someone/branch to go back to.

 

[craffles]

Also, re brokers, whilst they may give you far more options, they may not be the best path to take when getting a home Loan because as soon as you’ve gotten the loan (and they’ve gotten their commission) you’re on your own. If you go through the bank directly, you build that relationship from the get go and when it’s time to review your loan in 12-24 months time, you’ve got someone/branch to go back to.

Being a FHB Don't you only pay stamp duty on the amount over 600k? Thought it would be less.

Appreciate the help lads

 

[PieLebo87]

Being a FHB Don't you only pay stamp duty on the amount over 600k? Thought it would be less.

Appreciate the help lads

As a FHBer, Stamp Duty will be a little over $10k for something around the $650k mark.

 

[kaiserchief13]

Also, re brokers, whilst they may give you far more options, they may not be the best path to take when getting a home Loan because as soon as you’ve gotten the loan (and they’ve gotten their commission) you’re on your own. If you go through the bank directly, you build that relationship from the get go and when it’s time to review your loan in 12-24 months time, you’ve got someone/branch to go back to.

A good broker will send their clients regular updates on your property and the market (via e-mail). Also if you need something e.g. increase or refinance an e-mail to them should be enough to have them organise everything

 

[PieLebo87]

A good broker will send their clients regular updates on your property and the market (via e-mail). Also if you need something e.g. increase or refinance an e-mail to them should be enough to have them organise everything

I don’t disagree. In saying that, I regularly get customers coming into the bank wanting us to help with something because the broker had gone AWOL after the deal had been done.

 

[kaiserchief13]

I don’t disagree. In saying that, I regularly get customers coming into the bank wanting us to help with something because the broker had gone AWOL after the deal had been done.

Yeah because their broker is crap.....the banking royal commission will have some affect on the commissions brokers get. I think they should implement something to ensure the broker is doing something for the client while they are still receiving trailing commission. What that is who knows

 

[PieLebo87]

Yeah because their broker is crap.....the banking royal commission will have some affect on the commissions brokers get. I think they should implement something to ensure the broker is doing something for the client while they are still receiving trailing commission. What that is who knows

Whilst I’ve heard of a few dodgy bankers. For every dodgy banker, I’ve heard of 2 dodgy brokers. They’re the second biggest culprits of liar loans behind introducers.

 

[chargers 09]

Also, re brokers, whilst they may give you far more options, they may not be the best path to take when getting a home Loan because as soon as you’ve gotten the loan (and they’ve gotten their commission) you’re on your own. If you go through the bank directly, you build that relationship from the get go and when it’s time to review your loan in 12-24 months time, you’ve got someone/branch to go back to.

Not really true mate- mortgage brokers are there to steer you through the life of the loan.

The good ones at least should be actively looking at refinancing regularly.

Again why not speak to your bank manager and a mortgage broker.


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[chargers 09]

Whilst I’ve heard of a few dodgy bankers. For every dodgy banker, I’ve heard of 2 dodgy brokers. They’re the second biggest culprits of liar loans behind introducers.

Consumers have a lot to answer for as well IMO.


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[PieLebo87]

Not really true mate- mortgage brokers are there to steer you through the life of the loan.

The good ones at least should be actively looking at refinancing regularly.

Again why not speak to your bank manager and a mortgage broker

I don’t disagree but I regularly get broker customers come into the bank saying their broker has gone AWOL after the deals been drawn.

Also, my bank has plenty of benefits around the home loan which is very rarely set up properly because a broker is only really knowledgeable around our home loan products. I always get customers who don’t have an offset set up properly, didn’t realise they had an offset account, direct debits not set up or simply don’t even know what the hell is going on after their home loan draws down.

Brokers are great at rate shopping and getting the consumer a great deal, but that’s just one aspect of someone’s home loan journey.

I speak from regular experience, and not just one offs.

 

[PieLebo87]

Consumers have a lot to answer for as well IMO.

Completely agree. But the royal commission isn’t about making the consumer accountable, it’s purely about pointing the finger at financial instituations and it’s made the consumer even more spoilt and rotten IMO.

 

[Hamingja]

I used to think mortgage brokers were the worst until I spent some time dealing with the retail channel for a couple of months.

At least brokers have the excuse of dealing with 20 different banks policies and procedures and all banks will shift the goal posts on you every 5 minutes. Branch staff just have to keep on top of one and they can't manage that.

Whilst I’ve heard of a few dodgy bankers. For every dodgy banker, I’ve heard of 2 dodgy brokers. They’re the second biggest culprits of liar loans behind introducers.

Way way way more liar loans through the branch network. There is no gatekeeper for them and with really tough sales targets the temptation is there. Much easier for a branch lender to massage a deal through when they have delegations to approve stuff themselves compared to brokers who have to get it by a credit assessor who generally have no incentive to do the dodgy.

My advice would be to see a broker. Just make sure it is one via good word of mouth as there are a lot of shite ones out there.

 

[PieLebo87]

Way way way more liar loans through the branch network. There is no gatekeeper for them and with really tough sales targets the temptation is there. Much easier for a branch lender to massage a deal through when they have delegations to approve stuff themselves compared to brokers who have to get it by a credit assessor who generally have no incentive to do the dodgy.

I’d agree with you but it astounds me the amount of customers in retail we give a borrowing capacity to, only for them to go to a broker who miraculously gives them a higher amount using our own same policy. I guess the general living expenses magically change when the broker is writing the deal. If anything, it is now paramount that we ensure we don’t get our customers into financial hardship and the priority (finally) is to ensure both the bank and customer are well protected instead of worrying about ‘the sale’.

My advice would be to see a broker. Just make sure it is one via good word of mouth as there are a lot of shite ones out there.

That’s all I’m saying, there are a lot of shite ones out there. I never said there aren’t any good ones. It’s far easier for a shite one to do dodgy deals than it is for a bank worker directly, because burning one bridge than dealing with another bank is far easier than throwing away your entire employment.