Homestart are ****

[brucetiki]

Following on from jacksters my landlord is **** thread, I thought I'd start my own with Homestart.

Being a uni graduate, I qualify for their graduate loan (it used to be 0% deposit, but with the GFC it's now 3% deposit). Also, instead of paying mortgage insurance of $4000 (according to Homestart), they have a loan provision fee of about $1200 (so that $3k in my pocket). These factors attracted me to them.

Had my interview last month and got pre-approved. So I went out and found a house on the second week I was seriously looking (lucky me). That's where the smooth sailing ended. The real estate agent actually faxed the contract through to Homestart 2 weeks ago. I phone Homestart Monday-week to see if they received it. Tuesday afternoon (and after numerous calls), I end up getting a manager to send the valuers out to the property. As the approval was due that day, the agents extended that to the end of the week. Last Friday, my consultant called and said it's all approved, but gave me the weekend to decide if I wanted to go fixed or variable. So I called back Monday to say I wanted to go fixed for 3 years. The agent also called Monday advised Homestart didn't tell them it was approved. Tuesday afternoon (after 4 messages and a threat of the Ombudsman), I get through to finalise the approval and paperwork was going to be mailed to me and faxed to my conveyancer and agent.

Today, no paperwork, so another couple of messages have gone through. I've called the Ombudsman who gave me the internal dispute resolution contact (who I'll call Monday). So I called my conveyancer, and he didn't know I was approved either until I told him half an hour ago. So he's going to have a shot at getting something done Monday as well.

Now with settlement in 2 weeks, it appears I'll need a Malcolm Blight/Lazarus style miracle to get everything done on time.

Anyone else had grief with Homestart in the past?

 

[Alex99]

You should not have fixed your home loan, yeah fix it at a good rate it a brilliant idea but not with home start.

i guess it’s too late now but you should have waited two or three months and then went and refinanced with someone reputable. I understand that they for fill a need in the financial market, that’s why most people who go to them only stay with them a very short period of time.

2 or 3 months would be the most amount of time before you should have stayed with them for as after that you would have accrued enough equity in your new home to refinance it, even in this unstable and unpredictable property market. Then go to a real financial lender and refinance. Commonwealth Bank, Aussie, ANZ or even Westpac are very good.

From my understanding of home start you very rarely pay anything of the principal of your loan, it’s all interest. The way most home star loans are set up is they balance it to suit your repayments and most of the time you are only ever paying interest.

As you have fixed your home loan for 3 years – you are stuck with them as you don’t want to break that fixed term contract now.

You said it, Homestart finance is ****ing idiots.

 

[beartoo]

In my mid-50s I had a marriage break-up and a business failure at roughly the same time. I lost everything I owned including my freehold house--my ex still lives in it and good luck to her.
I remarried in my late-50s, having worked my arse off to re-establish myself financially. The only organisation that would advance me money to buy a new home was Homestart.
They have been absolutely fantastic. I sold the 1st place and upgraded after 2 years and re-established the loan. Yes, it cost me a fee, but once again they came to the party.
Crows 98, I don't know where you get your information from, but it is dead wrong. I paid my house off a couple of years ago. The interest rate is top of the range, but not vastly different to any other lender. I believe that what you have written about this fine organisation is actionable, and I am almost, not quite, angry enough at your slur on them to draw their attention to what you have written.
Homestart bend over backwards to help their customers if they fall behind. They foreclose only as a last resort and allow more liberal terms, more get out of jail time for people to get back on track than any other financial organisation.
Brucetiki, I'm sorry you have had a bad experience, but obviously wires got badly crossed more than once. I hope you can get it together. I suggest you contact the head of the organisation. He is a sympathetic and understanding person and will do anything in his power to assist you.
I have no contact with Homestart except being a VERY satisfied customer.

 

[brucetiki]

After my conveyancer called them Monday, they promptly sent him the approval documents and called me to say they've been sent out to me (which was supposed to be done a week ago). My conveyancer also sent out paperwork, which I received last night, signed, and mailed back today. Still no sign of anything from Homestart.

I'm going to call their Internal Disputes Resolution person tomorrow as now their extreme slackness (I've been approved for 2 weeks and not seen a since piece of paperwork to sign the mortgage) means settlement will almost certainly be delayed (it's due for next Friday, but that looks very unlikely). I have also taken Beartoo's advice (and thanks for the PM as well) and attempted to send an e-mail to Homestart's CEO. However, the e-mail address Homestart provide (feedback@homestart.com.au) rejects e-mails because of 'security policies'. So I've sent the same e-mail through on a feedback form on the Homestart web site.

 

[stu0411]

You should not have fixed your home loan, yeah fix it at a good rate it a brilliant idea but not with home start.

i guess it’s too late now but you should have waited two or three months and then went and refinanced with someone reputable. I understand that they for fill a need in the financial market, that’s why most people who go to them only stay with them a very short period of time.

2 or 3 months would be the most amount of time before you should have stayed with them for as after that you would have accrued enough equity in your new home to refinance it, even in this unstable and unpredictable property market. Then go to a real financial lender and refinance. Commonwealth Bank, Aussie, ANZ or even Westpac are very good.

From my understanding of home start you very rarely pay anything of the principal of your loan, it’s all interest. The way most home star loans are set up is they balance it to suit your repayments and most of the time you are only ever paying interest.

As you have fixed your home loan for 3 years – you are stuck with them as you don’t want to break that fixed term contract now.

You said it, Homestart finance is ****ing idiots.

The bit in bold is hilarious. If, as you state, you never pay anything off the principle with a Homestart loan how in the hell do you build up any equity!

Please don't comment on things you may not fully understand.

 

[Alex99]

The bit in bold is hilarious. If, as you state, you never pay anything off the principle with a Homestart loan in the beginning how in the hell do build up any equity!

Please don't comment on things you may not fully understand.

So the value of property doesn’t increase by itself? of course it does.

The market doesn’t increase in a natural state of affairs?

Unlike your car as soon as you drive it off the lot it decreases in value, in a normal state of affairs economy your property will increase in value.

Just because you may not be paying anything of your principal, doesn’t mean you’re not acquiring equity.

 

[stu0411]

So the value of property doesn’t increase by itself? of course it does.

The market doesn’t increase in a natural state of affairs?

Unlike your car as soon as you drive it off the lot it decreases in value, in a normal state of affairs economy your property will increase in value.

Just because you may not be paying anything of your principal, doesn’t mean you’re not acquiring equity.

Mate I work in the banking sector and properties are not increasing in value (according to bank evaluations anyway)

Your equity is decided by the banks evaluation of your property, not what Toop & Toop tell you its worth. Expect that to be anywhere between 5 and 20% less than what a real estate valuation would come in at, especially so given the current financial climate. I see it every day where I am told that the property is worth 500k and the val from the bank comes back at 400-440k. Thats a huge difference and will kill your "equity" pretty quick!

Even with the basis for your comments being "it will increase in a natural state of affairs" its ludicris to suggest you will aquire equity in your property within 2-3 months from just the properties value "going up".

Sorry mate, you are just flat out wrong here.

 

[brucetiki]

I FINALLY received my paperwork Thursday night. I've signed it and sent it back to them yesterday. They reckon my FHOG application has been sorted, so all going to plan I'll be moving in Friday (then heading to the big game on Saturday).

 

[Crow-mo]

Following on from jacksters my landlord is **** thread, I thought I'd start my own with Homestart.

Being a uni graduate, I qualify for their graduate loan (it used to be 0% deposit, but with the GFC it's now 3% deposit). Also, instead of paying mortgage insurance of $4000 (according to Homestart), they have a loan provision fee of about $1200 (so that $3k in my pocket). These factors attracted me to them.

so by the sounds of it, you couldn't afford a mortgage on your own otherwise and you want to bitch about them?

seems a bit perverse.

 

[Crow-mo]

2 or 3 months would be the most amount of time before you should have stayed with them for as after that you would have accrued enough equity in your new home to refinance it, even in this unstable and unpredictable property market.

You said it, Homestart finance is ****ing idiots.

oh my the ironing.

 

[Crow-mo]

In my mid-50s I had a marriage break-up and a business failure at roughly the same time. I lost everything I owned including my freehold house--my ex still lives in it and good luck to her.

I remarried in my late-50s, having worked my arse off to re-establish myself financially. The only organisation that would advance me money to buy a new home was Homestart.

and that is the point. Homestart exists to help people, to give them a kickstart where otherwise they would not be able to.

its an incredible social program, and it doesn't really exist elsewhere. If fact, I am not sure I support it politically; but socially it is a very progressive program. I don't understand people bitching and whining that somehow that help isn't enough. FFS, its like getting paid a free kick 30 metres out from goal, that wasn't there, and then sooking that the umpire didn't give you a charity 50m penalty to take you onto the goal line.

* I have never used homestart.

 

[brucetiki]

so by the sounds of it, you couldn't afford a mortgage on your own otherwise and you want to bitch about them?

seems a bit perverse.

Yeah but bad customer service is bad customer service no matter what product you're flogging

 

[Geoffa32]

I used them about five years ago. Had no problems at all. If anything were a bit pushy in getting everything done quick as I am a bit slack with paperwork.

Have since moved on as I wanted a lower rate, but to get into the market with no deposit (Grad Loan) they were good. We built our house and not having a deposit allowed us to use cash go the top spec and a few extras. We got a 100% loan in theory but by the time we moved in we had 20% equity in the place with market movements and extras we paid cash for.

 

[Crow-mo]

Yeah but bad customer service is bad customer service no matter what product you're flogging

yeah but, no but, but **** off.

you're bitching about a charity handout? christ.

 

[beartoo]

Charity? No. They get a slightly better than market return on their money.
I do agree that it is a good and progressive social program. The Advantage Loan that let's poor people get into the housing market is unique in the Western World as far as I now. Maybe the Scandinavian countries have something similar?
I had he ordinary loan and found it easy to pay off. The interest rate was about .02--.03 higher than the major banks.

 

[brucetiki]

yeah but, no but, but **** off.

you're bitching about a charity handout? christ.

I'd hardly call a mortgage a charity handout

 

[Crow-mo]

I'd hardly call a mortgage a charity handout

no, I don't imagine you do.

but let me tell you, you have no deposit and can't qualify out in the market (in the real world) with no deposit. that's charity.

without government intervention, you can't get a mortgage so drop the entitlement complex and start being grateful.

 

[Crow-mo]

Charity? No. They get a slightly better than market return on their money.
I do agree that it is a good and progressive social program. The Advantage Loan that let's poor people get into the housing market is unique in the Western World as far as I now. Maybe the Scandinavian countries have something similar?
I had he ordinary loan and found it easy to pay off. The interest rate was about .02--.03 higher than the major banks.

of course its charity, its a government backed social program designed to bring about outcomes that the market will not support.

you can argue about whether its a good or bad thing - and your story is exactly the sort of thing its designed to help with. and you clearly appreciated a leg up, when you needed it.

 

[brucetiki]

no, I don't imagine you do.

but let me tell you, you have no deposit and can't qualify out in the market (in the real world) with no deposit. that's charity.

without government intervention, you can't get a mortgage so drop the entitlement complex and start being grateful.

Umm, yes I did have a deposit. Homestart (like everyone else in the market except Divine Pioneer pretty much) have stopped no deposit home loans. The Graduate Loan (as well as their low-deposit loan) now requires a 3% deposit. The difference between Graduate and Low Deposit is that there is a 1% loading on your interest rate on the Low Deposit loan.

Also, without government intervention through schemes such as the First Home Owners Grant and Boost, alot of people - not just those going through Homestart, but going through any bank/mortgage company - would not be able to own their own home. Why do you think every first home owner and their dog is trying to buy a house by September 30?

At the end of the day, my issue is with their customer service levels. It's got nothing to do with 'entitlement complexes' or being ungrateful or with the mortgage product itself (which is fantastic). As I said before (to which you had absolutely no reply for), bad customer service is bad customer service no matter what product you're flogging.

Finally Crow-Mo, how can you go all high and mighty trying to lecture us about what Homestart are when you've never used them?

 

[jackster83]

All things going well, I will be graduating uni in April next year, so I will be beginning to think about buying a house. I would much prefer to save up for a decent deposit and get a loan through a bank, and consider Homestart more as a last resort.

But a couple of questions:

(1) Do they take a big slab out of what your home goes up by when you sell it one day?

(2) Are the rumours true that if you get a lump sum of money (e.g. tax cheque, lotto win, redundancy payout, etc.), they take it and pay it off the loan?

 

[brucetiki]

All things going well, I will be graduating uni in April next year, so I will be beginning to think about buying a house. I would much prefer to save up for a decent deposit and get a loan through a bank, and consider Homestart more as a last resort.

But a couple of questions:

(1) Do they take a big slab out of what your home goes up by when you sell it one day?

(2) Are the rumours true that if you get a lump sum of money (e.g. tax cheque, lotto win, redundancy payout, etc.), they take it and pay it off the loan?

1. Not with their standard mortgages (including Graduate Loan). It's only their Breakthrough Loan (where they lend you up to 35% more than your maximum borrowing amount without increasing your mortgage repayments) where they will take a slab out of your house profit. It depends on how much of the 35% you use, but if use the full 35%, they take 49% of the profit.

2. That is completely false. My Mum's had a graduate loan for several years and they've never done that to her.

 

[Crow-mo]

Umm, yes I did have a deposit. Homestart (like everyone else in the market except Divine Pioneer pretty much) have stopped no deposit home loans. The Graduate Loan (as well as their low-deposit loan) now requires a 3% deposit. The difference between Graduate and Low Deposit is that there is a 1% loading on your interest rate on the Low Deposit loan.

3% is no deposit. you adjust for fees, and you start in negative equity from the get go.

the global financial crisis was borne essentially of people who couldn't afford houses, buying them with no deposit.

in the US or Europe its mighty hard for a first time buyer to get a mortgage with much less than a 20% deposit right now. that's the only way the banks can maintain their tier one capital ratio's and reduce their risk profiles.

and here you are, getting all high and mighty.

Also, without government intervention through schemes such as the First Home Owners Grant and Boost, alot of people - not just those going through Homestart, but going through any bank/mortgage company - would not be able to own their own home. Why do you think every first home owner and their dog is trying to buy a house by September 30?

so its a social program, now start being thankful and drop the whiny student entitlement complex.

At the end of the day, my issue is with their customer service levels. It's got nothing to do with 'entitlement complexes' or being ungrateful or with the mortgage product itself (which is fantastic). As I said before (to which you had absolutely no reply for), bad customer service is bad customer service no matter what product you're flogging.

true, but i don't care about customer service in a soup kitchen.

Finally Crow-Mo, how can you go all high and mighty trying to lecture us about what Homestart are when you've never used them?

what a truly stupid, and most obviously immature thing to say. I have never gotten unemployment or child support benefits, but I know what they are about.

oh, and I might own the odd house here and there .

 

[Crow-mo]

All things going well, I will be graduating uni in April next year, so I will be beginning to think about buying a house.

why do you want to buy a house so soon anyway?

go travel, see the world. have fun. build a career. there's plenty of time for this stuff after.

hell, how do you even know what city and/or country you want to live in?

 

[brucetiki]

3% is no deposit. you adjust for fees, and you start in negative equity from the get go.

the global financial crisis was borne essentially of people who couldn't afford houses, buying them with no deposit.

in the US or Europe its mighty hard for a first time buyer to get a mortgage with much less than a 20% deposit right now. that's the only way the banks can maintain their tier one capital ratio's and reduce their risk profiles.

and here you are, getting all high and mighty.

so its a social program, now start being thankful and drop the whiny student entitlement complex.

true, but i don't care about customer service in a soup kitchen.

what a truly stupid, and most obviously immature thing to say. I have never gotten unemployment or child support benefits, but I know what they are about.

oh, and I might own the odd house here and there .

Crow-mo, you have yet again missed the point. My post was about poor customer service, not about the product. You have repeatedly refused to address the reason this thread exists by making flippant comments and dodging the point like your above post.

Also, if you 'don't care about customer service in a soup kitchen' as you so put it, then why comment in this thead at all?

 

[beartoo]

If someone spilled soup on me in a soup kitchen I'd be pissed off with the service.
Brucetiki is right. The public servants working at Homestart are paid to do a job--deliver a service. What happened in this case was unacceptable, unless you take the view that public servants can be as inefficient as they like. It has nothing to do with the service being provided.
People should be held to account for the standard of their work--whether it is in the private or public sector.