All Topics / Finance / Do you use FirstMac bank?

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  • Profile photo of RunwayRunway
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    @runway
    Join Date: 2010
    Post Count: 5

    Hi,

    I'm looking at opening a new home loan with First Mac. I had never heard of the organization until today and was wondering if anyone had any experiences (either positive or negative) about them.

    My mortgage broker has suggested them but I'm looking for a second opinion.

    Thanks!

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    I guess they do pay rather high upfront commission so that could be a reason why he has recommended them.

    In the current climate i cannot think of any other reason why you would use First Mac.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Hi Runway

    What was the basis for your broker suggesting them?

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of RunwayRunway
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    @runway
    Join Date: 2010
    Post Count: 5

    Hi Jamie,

    The broker said that they offer 'flexible' products and low interest rates.

    Upon investigation though, it seems their products have high ongoing fees. I wondering if this is done to offset the low interest rate.

    To me it's just another product. However, it's one thing to use a 'flexible' product and another to get superior service when you need it most. The ongoing operating and 'hidden' costs also concern me but that goes for any lender.

    Sounds like I need to go back to the mortgage broker and re-assess.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Certainly wouldnt have coupled "flexible" and First Mac in the same sentence.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of RunwayRunway
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    @runway
    Join Date: 2010
    Post Count: 5

    Hi Richard,

    I'm curios. What would you define as a 'flexible' product?

    I'm currently trying to filter all the lenders that are out there but it's all very confusing.

    Basically, I'm after an IO loan that has an offset account and which allows me to refinance my current PPOR so that I can access the equity (using a maximum 90% LVR). Of course, it also has to have the lowest rate available and minimum ongoing fees.

    Feel free to PM me if necessary.

    I'll be seeing my broker again soon but grateful for advice.

    Profile photo of Cap BCap B
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    @cap-b
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    They mortgage insure all loans.
    Have high set up fees.
    Have high exit fees.
    The rates are not as stable as the banks.
    They pay high commission.

    Not sure who what works for. Actually I am sure. The Broker!

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Post Count: 12,018

    As Curious has stated i wouldnt have thought that First Mac ticked too many boxes there.

    Be interested to see the Preliminary Advice statement from your broker for the recommendation.

    Yes you could do a lot better out there in my opinion.

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of GiumelliGroupGiumelliGroup
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    @giumelligroup
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    Post Count: 73
    Cap B wrote:

    They mortgage insure all loans.
    Have high set up fees.
    Have high exit fees.
    The rates are not as stable as the banks.
    They pay high commission.

    Not sure who what works for. Actually I am sure. The Broker!

    <moderator: delete language>. Firstmac have been very competitive in the marketplace for a very very long time. They are QLD based, very well set up, well backed and have previously offered some ridiculously low rates through the GFC like 2.99% fixed for 12 months. There set up fees are pretty standard with the banks once you put all the add-ons into the equation, sure there exit fees are higher over the first 4 years but this is to mitigate client turnover so they can borrow their money at a better rate…

    I would love to see where the broker benefits from this as its certainly not reflected in their commissions.

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
    Post Count: 1,099
    Runway wrote:
    Hi Jamie,

    The broker said that they offer 'flexible' products and low interest rates.

    Upon investigation though, it seems their products have high ongoing fees. I wondering if this is done to offset the low interest rate.

    To me it's just another product. However, it's one thing to use a 'flexible' product and another to get superior service when you need it most. The ongoing operating and 'hidden' costs also concern me but that goes for any lender.

    Sounds like I need to go back to the mortgage broker and re-assess.

    First mac would be one of the last i would normally recommended UNLESS you have a service apartment or unit under 50 squ ( even then i would consider ANZ etc…)

    Didn’t your broker give you a “written” comparison of each of the banks.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Post Count: 5,069

    Agree with most of the others, can’t see any reason why First Mac would be the number one option. Might be worth while getting a second opinion.

    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 euro73euro73
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    @euro73
    Join Date: 2009
    Post Count: 60
    Shape wrote:
    Runway wrote:
    Hi Jamie,

    The broker said that they offer 'flexible' products and low interest rates.

    Upon investigation though, it seems their products have high ongoing fees. I wondering if this is done to offset the low interest rate.

    To me it's just another product. However, it's one thing to use a 'flexible' product and another to get superior service when you need it most. The ongoing operating and 'hidden' costs also concern me but that goes for any lender.

    Sounds like I need to go back to the mortgage broker and re-assess.

    First mac would be one of the last i would normally recommended UNLESS you have a service apartment or unit under 50 squ ( even then i would consider ANZ etc…) Didn't your broker give you a "written" comparison of each of the banks. Regards Michael

    Repectfuly Michael… when did a securitised lender, where every deal is mortgage insured,  EVER do serviced apartments or units below 50m2???  That sort of lending has always and only ever been the domain of one or two lenders – maybe you meant NAB or St George, who both do those types of securities????  Firstmac has never taken those kinds of securities. 

    I really dont like to see these forums used to be negative, but really… thats just wrong information mate.

    Profile photo of euro73euro73
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    @euro73
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    Post Count: 60
    Cap B wrote:

    They mortgage insure all loans.  – WRONG. No LMI to 80%.  This has been the case for many months
    Have high set up fees. – No dearer than other Non Banks. Yes, dearer than banks, but then again- non banks dont have other revenues.
    Have high exit fees. –  No dearer than other Non Banks. Careful what you wish for when DEF's disappear.
    The rates are not as stable as the banks. – Gee- facts please?  whats the average movement of the majors and second tiers since the GFC? whats the movement of firstmac and resimac?  ( I agree that OTHER non banks went daft with rates- but lets talk about the Firstmac rates, not the GE rates, shall we?  )
    They pay high commission.  –
    well then, if you dont like brokers and dont think they should be paid- go and sort your own loans out. 

     

    Seriously – check your facts!  Comments like these create an environment where people think that non bank lenders have expensive, volatile products.  I wonder whether some of the finance professionals on here could well do with a refresher course in what lenders other than the big 4 actually offer…. ??

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
    Post Count: 1,099

    under 50 for living space – excluding the carspace etc….

    Placed one loan via them before for a FHO in Chippendale- 44 internal with 10 for car space.
    And the LMI was placed via QBE- within their acceptable guild-lines of under 50 inclusive

    Euro- dont accuse till you have done the work. every deal is possible it just depends how the deal is placed and what you have to offset the “negatives of the deal” – i have nothing to prove, as i do this as a free service- ; as much as i hate misleading information…in M Broking information changes all the time.

    FYI — > this is an internal email sent by first mac

    “Effective 1 March 2011, FirstMac will no longer require mortgage insurance on all new loans up to 80% LVR (some exclusions* apply).
    This change means faster turnaround times and a more consistent credit approach, resulting in enhanced service levels for both you and your borrowers.
    Exclusions* to apply:
    · New loans over 80% LVR
    · Construction loans (as per current process, all construction loans will continue to be mortgage insured)
    · New developments
    · Additional advances on loans currently mortgage insured —mortgage insurance will continue to apply
    If you have a loan that fits the current FirstMac policy, but falls within one of the above exclusions, mortgage insurance will be required.
    In all instances a clean credit bureau report and credit history is required.
    To summarise:
    · For new loans < $750,000 and < 80% LVR, mortgage insurance will no longer be required (exclusions* apply)
    · For any new loans outside the above parameters and FirstMac policy, and provided FirstMac is prepared to support the application to the insurer, mortgage insurance will continue to apply (can be capitalised to the loan)
    · Where mortgage insurance is required, FirstMac will pay the LMI premium for loans < 80% LVR up to $750,000 (increased from $600,000)

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Hate to say Euro First Mac have the small under 50 Sq niche market for some time now.

    And on the commission front they used to pay Brokers 1.5% upfront with no trail (Couldnt tell you off the top of my head if this is still current) and no clawback so i guess for many Brokers made it an attractive reason to write FM deals.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of euro73euro73
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    @euro73
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    Post Count: 60
    Qlds007 wrote:
    Hate to say Euro First Mac have the small under 50 Sq niche market for some time now.

    And on the commission front they used to pay Brokers 1.5% upfront with no trail (Couldnt tell you off the top of my head if this is still current) and no clawback so i guess for many Brokers made it an attractive reason to write FM deals.

    Cheers

    Yours in Finance

    Thats just not the case Richard. They arent in that space/niche at all. On this one, you are mistaken I'm afraid.

    Profile photo of euro73euro73
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    @euro73
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    Shape wrote:
    under 50 for living space – excluding the carspace etc…. Placed one loan via them before for a FHO in Chippendale- 44 internal with 10 for car space. And the LMI was placed via QBE- within their acceptable guild-lines of under 50 inclusive Euro- dont accuse till you have done the work. every deal is possible it just depends how the deal is placed and what you have to offset the "negatives of the deal" – i have nothing to prove, as i do this as a free service- ; as much as i hate misleading information…in M Broking information changes all the time. FYI — > this is an internal email sent by first mac "Effective 1 March 2011, FirstMac will no longer require mortgage insurance on all new loans up to 80% LVR (some exclusions* apply). This change means faster turnaround times and a more consistent credit approach, resulting in enhanced service levels for both you and your borrowers. Exclusions* to apply: · New loans over 80% LVR · Construction loans (as per current process, all construction loans will continue to be mortgage insured) · New developments · Additional advances on loans currently mortgage insured —mortgage insurance will continue to apply If you have a loan that fits the current FirstMac policy, but falls within one of the above exclusions, mortgage insurance will be required. In all instances a clean credit bureau report and credit history is required. To summarise: · For new loans < $750,000 and < 80% LVR, mortgage insurance will no longer be required (exclusions* apply) · For any new loans outside the above parameters and FirstMac policy, and provided FirstMac is prepared to support the application to the insurer, mortgage insurance will continue to apply (can be capitalised to the loan) · Where mortgage insurance is required, FirstMac will pay the LMI premium for loans < 80% LVR up to $750,000 (increased from $600,000) " Regards Michael

    If thats the case Michael I apologise…but I want to be clear, I do the work and the research and Im right. Without having to copy and paste the relevant lending policy, I will just say this- they are not a sub 50m2 lender.  You would have had that deal set by exception only, and Im guessing it would have been some time ago.  In any event, your previous post ( and Richard's subsequent post)  implied its a space they lend in regularly (a niche), and that's simply not accurate.  Thats all Im pointing out.

    I understand you provide commentary here free, as do I, but  everyone can put forward one or two deals that were done by exception, as an example of anything. I can find you an example of a 35m2 dual key investment loan written for a 60 year old, for example, but exceptions do not equate to lending polices.  These forums should be accurate, and comments should be fully qualified or they can be misconstrued.
    More widely, the non bank sector has already suffered by not being well supported by introducers since the advent of the GFC and I would have hoped that finance professionals would recognise the hand that feeds them ( and their customers) Its not helpful to imply to investors here that non banks are rubbish.
     Its a great shame, because when the legislation to ban exit fees (which are the lifeblood of, and an absolute necessity for non banks, and which brokers use as a reason NOT to support non banks) passes, Im not sure people (or most our broking colleagues) quite appreciate what the consequences will be; every serious industry spokesperson and representative agrees that borrowers will pay more, competition will be less, and I think we'll all look back and wonder why we were so silly to ignore the obvious signs… the big banks are going to have a field day and finance professionals will more than likely need to move to a fee for service model. Will your cusomers pay you for a service they can get free at a bank? I dont know how it will play out, but its going to be a very different landscape, and broker books wont be worth a brass razoo. Id have thought some additional support of non banks may have quite easily avoided the situation that awaits us all in the second half of this year.
    Anyway, it really bugs me when finance professionals bag non bank lenders on these forums.  Without them, none of us would have an industry,, there would have been far less innovation in products, and we would likely all be paying more. It's really a bug bear of mine so Im pedantic about making sure they are represented correctly, not unfairly. 

    Profile photo of Mick CMick C
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    @shape
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    Richard is correct, here is a bit of history lesson. Euro you are true when you say they are “securitised lenders” and technical speaking ( book wise) it’ doesn’t make sense for them to lend for such specialized security, but at the end of the day- they do…i can;t speak for all brokers; but my firm alone has placed many loan via securitised lenders for unit has low as 30 squ meters ( read on)

    From 2008-Beginning of 2009

    There were a range of lenders that still offer finance for units as low as 15 squ meters ( CBA, ANZ …etc) however for the client who did not fit the CBA or ANZ criteria – there were – First mac, Heritage, Wide bay etc…

    First mac – they were specialist with the under 50 squ meters with there homerun08 product – how do i know this you ask? because our firm has placed well over 15 deals with first mac from 2008-2009 and they were all for unit’s as low as 30 squ!!! note; this product was taken off the shelf as of Dec 2009.

    Homerun08- Unit as low as 30 squ acceptable, 60% LVR, full doc, self contained and max exposure limit of 20%.

    2010- to Present

    A lot of these lenders has tighten their rule books; unit as low as 30 squ only possible for existing clients of the bank and must not be there first IP. If the deal is right; nothing is impossible- it’s just a case of asking.
    As mentioned, we still place loan via Firstmac if it make sense too.

    P.s Euro- relax a bit buddy, every time you post i can feel a bit of tension and stress. Relax!

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Post Count: 12,018

    Michael i totally agree.

    I went to a breakfast meeting only last week at their HQ here in Brisbane and the < 50 Sq M product was mentioned as a niche product.

    I have known Kim Cannon for nearly 18 years back to his Nationale days and First Mac as they are now known after the amalgamation of the previous businesses has always been slightly different in the odd area and space. He is definately an innovator and very successful.

    I like Michael support non bank lenders as much as the next however you have to be accurate in your facts. The product is available and openly marketed by their BDM's. Like anything if you get the support of the back up staff and credit and the range of products is acceptable then certainly you would look at them as a lender and be in your suite of loans you would recommend to a potential client.

    Personally i dont consider their range of product or service levels to be what i am after from a lender so other than the odd loan i dont place them high on my list of potential funders.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of luke86luke86
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    @luke86
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    Runway wrote:
    Hi Richard,

    Basically, I'm after an IO loan that has an offset account and which allows me to refinance my current PPOR so that I can access the equity (using a maximum 90% LVR). Of course, it also has to have the lowest rate available and minimum ongoing fees.

    Runaway- trying to get the discussion back on track!! I have a loan with CBA for my PPOR, I have an ok rate (7.11%), although I do pay a $350 annual fee which makes the effective rate about 7.15- 7.2%. Not the best rate out there I know, I would like to know what Richard, Michael or Jamie have to say about that.

    But what I have found good about CBA is it is so easy to refinance with them. Being able to access my equity is more important for me than a slightly lower rate. I refinanced with a LOC to bring the total LVR to 90% a few months ago and there were no real problems.

    Cheers,
    Luke

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