Forums / Property Investing / Help Needed! / should i stay with the same bank?

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  • Profile photo of eilatan28eilatan28
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    @eilatan28
    Join Date: 2010
    Post Count: 44

    hi all, just curious to hear peoples thoughts / ideas on using a different bank / lender for finance on our second IP, compared to sticking with the same bank to who we have our first IP through. ive been told different things by different people and wondering is it best to build up a good rapport with one lender in the early days or spread your eggs in different baskets?? your comments would be much appreciated!!

    we would drawing down equity from the first to use as a deposit on the second. hoping to only borrow 80% to avoid LMI on the second loan. and obviously not wanting to cross collat the loans!! thanks heaps!

    Profile photo of LinarLinar
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    @linar
    Join Date: 2004
    Post Count: 567

    I go wherever the money is.  No bank loyalty here.

    K

    Profile photo of BankerBanker
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    @banker
    Join Date: 2010
    Post Count: 371

    If you don’t cross and keep the securities standalone – there is no major benefit to split banks.
    If one bank; At least when you apply you don’t need loan statements + credit card statement etc. Some banks don’t need a privacy statement if ones been signed within the last 2 years, no pay slips or confirmation of rental if depoisted in their accounts.

    I’ve had new loans approved within 10 minutes e.g. Approved over the phone upon first enquiry. Contracts ready to pick up in a branch 30 mins later.

    Depends what’s important to you and what level of service you want. Split banking will slow down future approvals. If you not crossed you can always refinance individual properties if you need to in the future.

    Banker

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,065

    I wouldn't just stick with your current lender simply for convenience though. If you can find a better deal then it might be worth while switching to another lender.

    Cheers,

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of BankerBanker
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    @banker
    Join Date: 2010
    Post Count: 371

    Jamies got a point but there’s not many creditable lenders out there that will beat NAB, ANZ or CBA on rates / fees etc
    If you’re already on a pro pack there should be no set up fees, no Val fees, no settlement or legal fees etc etc… If you already pay anual fee it should remove all fees from the new account. No additional annual fee is you already pay one.

    Eilatan- what bank are you with?
    Are you already paying an annual fee?

    Profile photo of eilatan28eilatan28
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    @eilatan28
    Join Date: 2010
    Post Count: 44

    thanks so much guys. currently with st.george. Annual package fee of $395 with offset and credit card facility included

    Profile photo of BankerBanker
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    @banker
    Join Date: 2010
    Post Count: 371

    You should be able to get another loan then with – NIL fees. The annual fee already being paid should cover Val, establishment fees etc. If it’s a good rate just stay put and keep securities seperate…

    Profile photo of eloieloi
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    @eloi
    Join Date: 2010
    Post Count: 44

    HAHAHAH is banker trying to sell you a loan from the big four. <moderator: delete abuse>. when you say that  there's not many creditable lenders out there that will beat NAB, ANZ or CBA on rates / fees etc. most non bank, credit union or building societies  will beat  any of the big four on rates, fees and everything else, which is the reason not one major bank won an award when the bank v non banks went head to head.

    Profile photo of BankerBanker
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    @banker
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    I think your comparing the standard variable rate of the banks with the rates of the credit unions.
    The banks discounted rates almost always come in better. I’ve never seen someone take a standard variable with a bank without a discount.

    Last time we argued this on a post you could only come up with a couple of dodgy mortgage managers with 2% deferred establishment fees and history of shafting people with the GE / Challenger out of reserve increases – they also had legal fees and Val fees etc

    Profile photo of YoungInvestorYoungInvestor
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    @younginvestor
    Join Date: 2003
    Post Count: 377

    eloi,

    At this stage in the economic cycle, Banker is right.

    There are VERY FEW non-bank lenders who are going to be able to offer the same deals as the big 4 at this point in time, and that will probably stay the same for at least another couple of years.

    I am aware of the recent economic reasons why 95% of mortgages in this country are now with the big 4, but the figure was still above 80% before the GFC (rough figures btw).

    The smaller guys will get it from you one way or another, whether its rates, app fees, service fees, exit penalties, or just bad service!! You'd be surprised how hard it can be to have a very simple question or information request answered by a non-bank lender – They simply don't have the infrastructure.

    ole….

    Profile photo of miraclehomeloansmiraclehomeloans
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    @miraclehomeloans
    Join Date: 2010
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    I can beat all the banks rates for starters, but as for the question I would suggest go with a second lender. The reason being that if you want to purchase further property in the future and you reach your limit with one bank, you will always have a second option. Having 2 properties with one bank is no problems but when it gets to 3 or 4 you may find they place restrictions on your borrowings.
    Plus when a bank assesses you they add a margin to the interest rate of the proposed loans so if all you loans are with one bank some will add this margin to all your loans and decrease the amount you can borrow where as other lenders may only take into account the actual loan repayment, allowing you to borrow more. It might not affect you now but it may in the future so plan you strategy early on and it will save you having to refinance at a later date.

    Profile photo of CatalystCatalyst
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    @catalyst
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    I'd stay with St George (separate loans for each IP) until you reach $1Mill then move. 

    Profile photo of BankerBanker
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    @banker
    Join Date: 2010
    Post Count: 371
    miraclehomeloans wrote:
    I can beat all the banks rates for starters, but as for the question I would suggest go with a second lender. The reason being that if you want to purchase further property in the future and you reach your limit with one bank, you will always have a second option. Having 2 properties with one bank is no problems but when it gets to 3 or 4 you may find they place restrictions on your borrowings.
    Plus when a bank assesses you they add a margin to the interest rate of the proposed loans so if all you loans are with one bank some will add this margin to all your loans and decrease the amount you can borrow where as other lenders may only take into account the actual loan repayment, allowing you to borrow more. It might not affect you now but it may in the future so plan you strategy early on and it will save you having to refinance at a later date.

    The rate on your site is 6.59%. Sorry but NAB is cheaper. I also just did a 6.56% with CBA which was an extra 0.1% of the Standard rate of 6.66%. in the case of CBA there were no fees at all E,g, nil Val, legal, app fee etc.

    Your wedsite quotes fees as:

    application: $400
    valuation: $250
    legals : $297
    settlement fee: $150 (minimum)

    There is no mention of your deferred establishment fees – love to know what they are?
    Is your DEF 2.0% like ratebuster and other mortgage managers (versus bank$700)…

    Also re the sensitized margin on rates for servicing. It only usually applies to the new loans – not existing debt. Noting your deals are likley all mortgage insured so you a using their calculaotos – which are generally worst than the banks?

    Out of curiosity – it appears you are a mortgage manager – who is the wholesale lender ?

    Profile photo of miraclehomeloansmiraclehomeloans
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    @miraclehomeloans
    Join Date: 2010
    Post Count: 3

    Hi Banker,
    Keep in mind that to get 6.66% you usually need to have their Wealth Creation Package or MAV package  which is around $30 per month. Yes it gives you other discounts too but some people just don't want to pay fees.  Also we do not need anyone to borrow over a certain amount to qualify for a discount. Everyone gets it. The Miracle Loan is really tailored to people with single or dual loans of around 320,000 where they would normally be charged a higher rate and a monthly fee.

    In regards to the sensitized rate that can depend on the lender, some will charge some wont but if the customer is staying with the same bank and the new deal requires all loans to be re assessed to suit their situation then yest they would get the additional rate applied to servicing. 

    We have a number of funding sources but try to stick to the non bank sources.

    DEF is varied over a 3 years period and reduces but if we have provided the right loan then there is very little chance the customer will have to pay this, unless they really need to get out.

    The idea of companies like me is to give people choice with a very good product and all the features they need with no ongoing fees of any type. A Good basic home loan and hopefully more of us will appear out here.

    Do you trust the banks ?   :)

    Profile photo of BankerBanker
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    @banker
    Join Date: 2010
    Post Count: 371

    I only love banks at the moment…
    If it’s a matter of trust; in the current market I’m happier to trust them to know there funding position is stronger than non banks and DEF is small so if I have to move unexpectedly I can.
    Re the annual fee. In the original post it’s alreay paid – therefore the new loan attracts no extra cost so why pay over $1000 in establishment fees to another lender with high DEF?

    At a loan of 320k (as you mention above) would be 6.54% at NAB. Cheaper rate, less DEF and full service product…Blight have an annual fee but his covers all transactional banking as well – the even go another 0.1% off if you ask nicley…

    Profile photo of eloieloi
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    @eloi
    Join Date: 2010
    Post Count: 44

    ok here is a loan from a Mortgage house. its a variable at 6.49%.

    Loan Details

    Loan Type
    Variable
    Security Type
    ResidentialProperty
    Availability
    Owner Occupiers, Investors
    Repayment Options
    Principal & Interest
    Repayment Frequency
    Weekly, Fortnightly, Monthly
    Interest Rate Notes
    Min Loan Term
    10
    Max Loan Term
    30
    Min Loan Amount
    $50,000.00
    Max Loan Amount
    $600,000.00
    Max Loan to Value Ration (LVR)
    80%
    Max LVR with Mortgage Insurance
    80%
    Features
    Extra Repayments  yes and free
    Loan is Transferable (Portable) yes and free
    Transfer Fee
    $0
    Mortgage Offset Available yes
    Mortgage Offset 100% yes
    Mortgage Offset Rate
    0%
    Redraw Available yes
    Min Redraw Amount
    $20.00
    Max Redraw Amount
    $0
    Redraw Fee
    $0
    Redraw Notice Period
    24 Hours
    Redraw Method
    Redraw Notes & Comments
    Split Account
    Split Available
    Max No. of Accounts for Split
    0
    Separate Statements for Split
    Statement Frequency
    Fixed Option
    Fee for Fixing
    $0
    Fees
    Application Fee
    $0
    Legal Fee
    $0
    Valuation Fee
    $0
    Settlement Fee
    $275.00
    Service Fee
    $375.00
    Exit Fee
    $0
    Early Termination Fee

    Early Termination Fees (3 Year Cost)
    $2,400.00
    Early Termination Fees (5 Year Cost)
    $0
    Switching Fee
    $0
    Switching Fee Notes:
    Break Costs
    $0
    General Fee Notes:

    As you can see they are extremly competitive and will beat the major 4 overall on a whole package. Sure the exit fee might be slghtly higher than some but will all the extras involved it more than compensates. So now you cant be sayng that non banks dont have the best deals around

    Profile photo of eloieloi
    Member
    @eloi
    Join Date: 2010
    Post Count: 44

    If anyone really want to see how good non banks or credit unions are just go to infochoice.com.au and see for your self

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