Gidday Terry,During this post, I have asked for a way of objectively measuring the quality of the broker so that borrowers would then be better able to understand why some charge $81,000 more over the life of a loan than others.The assumption that you and others like you continue to rely on is that if you pay the highest price, you must be getting…[Read more]

Gidday Singer,Actually, now the analogy fits even better. It is quite difficult, often costly and sometimes impossible for the average person to know whether that renovation is a quality one or not. It's not unheard of for great tiles to cover up atrocious structural workmanship, a glossy bench which is a wafer thin veneer over an old dodgy on…[Read more]

Gidday Singer,That's fair enough too. Of course it's like saying"I wouldn't dream of offering $32,000 below the asking price After all they've gone to the trouble of renovating and used their expertise to get the colours right… I'm not that good with colours"No matter what your situation, if you're smart enough to choose property, then you're…[Read more]

Sorry Hans,There doesn't seem to be any information on your site about mortgage rebates paid to the borrower.The thread was started on this topic and the most recent discussion was around finding the right words to explain the benefit of this over retail brokers (See my last post)

mortgagedetective wrote:
Brokers that don't pay mortgage rebates…[Read more]

Gidday Black Knight Mo…A difficult read, but thanks for the input. Three quick corrections. (i)   I am primarily concerned with the borrowers rights, everything else runs a distant second.(ii)  I support mortgage brokers doing the right thing and believe they are important to providing competitive tension.(iii) Lenders don't "feed me" nor mor…[Read more]

Jazz77,I could be wrong, however I thought if you are reporting on an Accrual basis it is taxed on Invoice date and if like many SME's you are reporting on a Cash basis, income is based on Paid date. I'm no tax attorney, however the concept of shifting this bookwork around sounds alarmingly illegal to me and you should seek professional tax…[Read more]

Gidday Badger,I avoid recommending one of any over another as their experience and your requirements can vary wildly.Caveate Emptor – Just make sure you fully check out the folks you're interested in before you sign up for anything.Although there's no central repository for accountants or mortgage brokers per se, there is one, of sorts, for…[Read more]

StumpCam,This doesn't answer the question to Kenny, however the ATO link also notes:21. Where a taxpayer makes repayments over and above the required minimum payment and the line of credit facility comprises one mixed purpose sub-account only, the taxpayer cannot choose to notionally allocate the repayments to a particular portion of the total…[Read more]

Great comment Kenny and valuable advice.Always get your information form the horses mouth, and get it in writing.

Thanks Kenny and StumpCam,I appreciate feedback, support and challenges.The GFC has touched most of us StumpCam, a small, but noteworthy consolationKenny – My answer comes in two parts. The first is that my accountant guided me out of a similar situation, so first hand experience over the last few years. It wasn't specifically in relation to an…[Read more]

Sorry for the confusion StumpCam,It probably relates to the notion that the portions are fixed for time immemorial which is incorrect. Your post then extended this concept to the idea that the entire principle must be repaid to change the apportionment, which is also incorrect.You can pay down the private debt independent of the investment debt re…[Read more]

mortgagedetective wrote:
Gidday Dan42,However, I agree that it is another valid method of modelling results and even with those assumptions, also agree that $32,000 is nice.

Gidday Gibbo,I'm not sure where you see the imbalance, although there seems to be some misunderstanding around my willingness to get this right. The moment a financial…[Read more]

mortgagedetective wrote:
However, I agree that it is another valid method of modelling results and even with those assumptions, also agree that $32,000 is nice.

Gidday Alistair,You missed the important detail acknowledging results from an npv via dcf calculation – the method which I think you were attempting to explain (thanks again for sho…[Read more]

Gidday StumpCam,I'm not sure who is giving you your tax advice, but it seems a little ummm… off the mark.The ATO's position is that you don't need to have a separate loan account so long as you clearly apportion the interest in the LoC (or any other loan account for that matter) based on what the principle balances were used for.This of co…[Read more]

Gidday Dan42,Thanks for the clarification – one of those Ah-huh moments.I hadn't made the DCF connection, partly because I question the applicability of it for this purpose (i.e. what rpr works given the situation actually being modelled) and partly because it never came up :o(However, I agree that it is another valid method of modelling results…[Read more]

Gidday Noisuf,Rate type is a part of the structure conversation and fixed rates are about buying certainty, not saving in interest, so you have the tiger by the tail.The price of this insurance is currently a tad higher than 2.09% p.a. assuming you grab and lock the NAB-Homeside rate at 7.09% or add 0.10% for NAB Retail. Next stop is 7.29%…[Read more]

Gidday Alistair,By BS I hope you mean Blooming Significant and I agree, a 12.55% saving in interest and fees is exactly that.I have explained the methodology and the assumptions and also factored in the time value of money. I'm not sure why you have struggled so intensely with the calculation. It's just math. Again, if you send me your sp…[Read more]

Gidday Gibbo,Wow, dare to dream! Savings through those brokers could balloon well beyond the $81,000 (over 30 years) for that Homeside Loan.Good questions and who knows the answer to the first one (how long). However, you could look toward the UK for your answer – having said that, they are different markets.On question 2, I don't believe for e…[Read more]

Gidday Alistair,Gosh I wish that came out sooner. So we are agreed the best way to state the saving (for the $450,000 homeside example) is:"a saving of 12.55% in interest and fees which equals $81,000 over 30 years"In relation to Daniel's original question – "Is this one of those cases where 'you get what you pay for", it seems we can also agree…[Read more]

Thanks Alistair,The 18% saving on the $450,000 NAB/Homeside loan from mortgage rebate over retail has always been expressed as a percentage of the loan amount and calculated using real data. Although there has been plenty of allegation, nobody in this post has demonstrated the figure to be incorrect using real data.When comments were added that…[Read more]