They are no-frills type home loans, however they both offer low interest rates. I asked a mortgage choice person if they would recommend them and they said no. The reason was that post settlement support was dismal, however I don’t know of anyone who uses them.
You tend to get what you pay for.
With I.P loans, the interest rate is not the main concern as it is tax deductable, as are a lot of the set-up costs, so a lot of the cost is diminished.
What is very important is getting the right loan to allow you to continue borrowing in the future, and using a lender who is investor friendly.
This may cost a little more in the short term, but will potentially make you many more thousands over your lifetime.
One Direct are wholly owned by Anz Bank which in the surface you would think was fine. However as has been discussed you cannot walk into an Anz Bank and query your loan or request a variation.
Your broker has no right or authority to act on your behalf in rectifying any mistakes that may happen along the way and a short term gain (ask yourself how long in reality can these lenders hold off passing on the RBA rate increases to you) can end up costing you more if you intend to grow your portfolio.
Sure if you think you will only ever take out 1 loan and are not too fussed on customer service then this might be an avenue to consider but you need to ask yourself if it such a good avenue for finance why would Anz Bank customers not all switch their loan to One Direct.
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Not too sure about OneDirect but I'm a MyRate employee, I've come across this post and I just wanted to clear up a few things that I think were not fully accurate from the discussion above:
– Ours isn't a "no frills" home loan – that would probably be a Basic Variable home loan. MyRate and OneDirect are Standard Variable home loans both offer virtually all the regular features such as extra repayments, line-of-credit, split loans, redraw etc. The only feature I'm aware of that we don't have is an offset account. – Post settlement support – I doubt any of the people who said our post-settlement support was dismal have ever spoken to a customer. It's a bit self-serving for my to say that it's great because that's only what you'd expect – however there's just no reason to think that a smaller company will have poorer customer service than a big bank – there's plenty of companies with good and bad service whether they are small or large. I suggest if you are considering MyRate or OneDirect you call their customer service line and see how we compare with the banks in terms of how helpful and quick the staff are to answer your questions – if we're worse then we certainly don't deserve your business! – Although the costs are deductible that's certainly no reason to settle for a higher rate. – We are only mortgage insured if the LVR is over 80%, as is almost any prime lender, and I'm almost certain it's the same for OneDirect.
Has your broker dealt with any of these lenders? And even if there are going to be any issues – what sort of complications can you expect? In the end of the day there is a huge difference with interest rates between banks and companies like myrate and onedirect. Do you want to pay good money for the 24 hour call centre and a branch? I don't.
I would suggest to go with MyRate as they have a better rate with very similar features and I had good experience with them when I was shopping for my home loan.
Watch out for these small loans. Nearly all are mortgage insured no matter what the LVR is. This could severely restrict your ability to keep borrowing for multiple properties Terryw Discover Home Loans Parramatta [email protected] Sign up to my mailing list. Just send me a blank email, with â€œsubscribeâ€ in subject line.
Not all small lenders require mortgage insurance if the loan is less than 80%. I just got a loan from LoanAustralia (they have best star rating according to Cannex) and I didn't pay LMI.
The reason your mortgage choice broker, and other brokers won't recommend these lender types in most cases is……because they are not available to the broker channel, so of course the broker gets no commission. Even if they were, they would get less, as the margins are so low. Ah ah!!!! Of course they will not say 'yep, they are good and cheaper, go for it. That said, neither would I….. although I am not working as a 'broker' as such. These loan types (not onedirect though really) are effectively wholesale loans – a small margin is added onto the base interest rate, and they are not running branches, large staff numbers, and advertising campaigns etc. However, I do think there is a lot to be said for dealing with someone with local presence, that you can establish a relationship with, who owns or is actively invovled in the buisness…….AND can help you with some handy advice and handholding. ……to me that says a mortgage broker or non bank lender. – unless you are happy enough to go it alone – I suppose in all fairness, unless you have an 'all in one' type loan, Joe Average won't spare their loan a passing thought for a few years. Lack of service IS a risk, but I should point out I in the past have dealt with some 'big' lenders, or more well know n ones, from a broking perspective, and the lack of support, speed, and response (always with a range of excuses) from some has been nothing short of horrifing, and the cause of some embarrassment. I will spare them embarrassment from mentioning names, but I'm sure you get the idea. Now……that Cabernet Savignon beckons……
"Not all small lenders require mortgage insurance if the loan is less than 80%. I just got a loan from LoanAustralia (they have best star rating according to Cannex) and I didn't pay LMI. "
Just because you didn't pay for it, doesn't mean your loan is not mortgage insured. Your loan would almost certainly be insured. I'm not sure who provides funds to LoanAustralia, but most of these smaller lenders use one or more of a veryt small number of wholesale funders, they are badged differently but are in effect the same loans. If you are thinking small picture, such lenders are probably great.
We have several investment loans through Onedirect and we deal with one person and he is great, we have found their service and response time great and a good rate too. We have found dealing with them over the phone and via email wonderful and easier for us than going in to see someone.
We have 80% loans and it has been an easy process for our 30 day settlements. We had one issue on one property where they couldn't settle and we were charged by our conveyancer and the seller and Onedirect reimbursed all of these costs promptly.
I am dealing with one of the online brokers and they giving me grief.. i provided them with my last 3 years tax returnson TFN and everything else needed. i work in IT and at that time i was contracting earning aroung 90-100k a year. on purpose i told them that I earn 70k knowing that in fulltime i earn less. i have 20% deposit of around 45k saved up all along.
now i have accepted a fulltime employment where i have been contracting for last 7 months. so i am on fulltime employment, under probation but just on paper. as my managers know me and its probation just on paper.
what do i do, if they come and say "NO" i am in cooling off period right now.
property asking price: 220 k , i have 45 k deposit sitting for last 3 months. on annual salary of 77k, but on paper probation.
thanks for explaining i still have hope. one think i cannot understand, if i earn 70k a year as IT contractor, with only 1 week notice period they are fine with that. where there is no guarantee under sun.
but if i earn the same money in permanent job, where under probation i have more stability and paying the loan. how does that work out?
also i will email u soon more info. i will get a confirm "no" or "yes" from them tomm and then reorganise required paper work. pull out from the contract…. and look at new bank or mortgage plp. this time bigger institution..