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  • Profile photo of casanovawacasanovawa
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    @casanovawa
    Join Date: 2010
    Post Count: 63

    I am thinking of getting a property in WA (an owner occupy) within the next couple of months (i have gotten to this point several times but want to do it this time).

    I am still tossing up between just going and getting a loan and buying an existing place as quick and less headaches, or else getting a package builder (like Aussie Living) and I find a block of land then get them to come and build the complete house and carpets and all which would allow me to tailor it to what i like…  If i do that i can probably get a loan deal with their financier which would let me rent for the period that I am building and only pay a small amount a week ($50??) till I am ready to move in which would make it much more feasiable and i hear some deals about being able to get in with a pretty small deposit…  For the record I have about $15,000 deposit and am hopefully looking for something not much more than a $350,000 package…

    If I don't do that I am tossing up between just getting an ANZ mobile lender to come around and sit down with me to tell me how much I can borrow (I have built a house with them once before and all my day to day savings accounts and credit cards are with them) as they might give me a better deal as i am a long term customer, or else get a mortgage broker to come around and tell me about all the loan products out there (I have heard ME Bank are pretty good and competitive in what they offer)…

    Does anyone have any thoughts if the pay a cheap amount while your house has built is really a lousy deal or a decent way to build and rent at the same time???  And does anyone have any views on the ANZ bank being the lender vs a mortgage broker who spruiks for everyone and will I get the best loan facility from them?  I see ANZ has just been awarded the bank of the year in Money magazine i think….

    Any thoughts appreciated…

    Regards
    Mark

    Profile photo of WhatIfWeFinanceWhatIfWeFinance
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    @whatifwefinance
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    Mark

    Just a few thoughts that you need to consider:

    a. A Mobile Lender eg from ANZ is limited to ANZ Products and by default that means you need to fit in to ANZ Credit Policy

    b. The advantage of a Mortgage Broker is they will find the product that is best suited to your needs. Depending on your circumstances ANZ may or may not be a good fit and that is what the broker will determine

    c. The Lender of the Year stuff you need to take with a grain of salt. Some of it is marketing and some of it is substance. Having said that my experiences with ANZ have been generally good

    All the best

    Profile photo of casanovawacasanovawa
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    @casanovawa
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    Thanks Spiro, yeah there definitely is that factor of a broker being able to give me info on the whole range of what is available out there…  Is the industry pretty good these days in terms of them not directing you to loan products that THEY benefit out of so you will get the unvarnished truth?  

    May it also be the case that they have lenders they prefer to deal with or do a lot of business with and so if you agree to go that route you might get access to loan terms that me rocking up to a bank might not be able to convince the bank to let me have???  I'm not talking crazy stuff that would be detrimental to me or the bank, but just if there was one bit i didn't quite have for a loan can the broker have a good relationship with one of their bank/lending companies to get it over the line or is it all sort of very hands off???

    I guess having started this process and then stopped a few times I just want to get something started soon as homes seem to be moving here in Perth now, not long on the market before an Under Offer sticker is up so need to get my ducks lined up and work out my strategy to buy or build…

    Mark

    Profile photo of Matt KenworthyMatt Kenworthy
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    casanovawa wrote:
    Thanks Spiro, yeah there definitely is that factor of a broker being able to give me info on the whole range of what is available out there…  Is the industry pretty good these days in terms of them not directing you to loan products that THEY benefit out of so you will get the unvarnished truth?  

    Obviously biased but the WA industry has been regulated for a lot longer than the rest of the nation so there should be significantly less brokers with questionable ethics.  Ultimately your broker should provide you with the reasoning behind their recommendation of a particular product/lender.

    Quote:
    May it also be the case that they have lenders they prefer to deal with or do a lot of business with and so if you agree to go that route you might get access to loan terms that me rocking up to a bank might not be able to convince the bank to let me have???  I'm not talking crazy stuff that would be detrimental to me or the bank, but just if there was one bit i didn't quite have for a loan can the broker have a good relationship with one of their bank/lending companies to get it over the line or is it all sort of very hands off???

    One of the biggest advantages is that a good broker will know the different policies of a lender so while you might not fit policy wise at your bank you may at another.  A good broker will also be able to identify any potential weak spots in your application and provide mitigants to improve your chance of success.  With most lenders we have direct access to credit staff who assess your application (some lenders being more helpful than others) so if there's a point in your application that they're concerned about we can try and find a way to resolve it/give them the comfort they need to approve your application.  A good broker will do far more than just fill out your application, assemble the supporting documents and fax off to the bank for assessing.

    Quote:
    I guess having started this process and then stopped a few times I just want to get something started soon as homes seem to be moving here in Perth now, not long on the market before an Under Offer sticker is up so need to get my ducks lined up and work out my strategy to buy or build…

    Good luck!

    Profile photo of Jamie MooreJamie Moore
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    casanovawa wrote:
    May it also be the case that they have lenders they prefer to deal with or do a lot of business with and so if you agree to go that route you might get access to loan terms that me rocking up to a bank might not be able to convince the bank to let me have??? 

    Yeah it can happen. I often negotiate discounted rates for clients who wouldn't normally ask or be offered them within the branch.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Profile photo of TheFinanceShopTheFinanceShop
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    casanovawa wrote:
    I am thinking of getting a property in WA (an owner occupy) within the next couple of months (i have gotten to this point several times but want to do it this time).

    I am still tossing up between just going and getting a loan and buying an existing place as quick and less headaches, or else getting a package builder (like Aussie Living) and I find a block of land then get them to come and build the complete house and carpets and all which would allow me to tailor it to what i like…  If i do that i can probably get a loan deal with their financier which would let me rent for the period that I am building and only pay a small amount a week ($50??) till I am ready to move in which would make it much more feasiable and i hear some deals about being able to get in with a pretty small deposit…  For the record I have about $15,000 deposit and am hopefully looking for something not much more than a $350,000 package…

    If I don't do that I am tossing up between just getting an ANZ mobile lender to come around and sit down with me to tell me how much I can borrow (I have built a house with them once before and all my day to day savings accounts and credit cards are with them) as they might give me a better deal as i am a long term customer, or else get a mortgage broker to come around and tell me about all the loan products out there (I have heard ME Bank are pretty good and competitive in what they offer)…

    Does anyone have any thoughts if the pay a cheap amount while your house has built is really a lousy deal or a decent way to build and rent at the same time???  And does anyone have any views on the ANZ bank being the lender vs a mortgage broker who spruiks for everyone and will I get the best loan facility from them?  I see ANZ has just been awarded the bank of the year in Money magazine i think….

    Any thoughts appreciated…

    Regards
    Mark

    Hi Mark,

    It depends on how much your LVR will be at the end of the day. When it comes to Variable Rates ME Bank is definitely cheaper than ANZ but then there are about 3 lenders cheaper than ME Bank. The problem with variables rates is that the lender who is cheaper today may not be the cheapest next month. Fixed rates is a different story. Also in your case you need to consider LMI and the premium you will be paying as each lender is different.

    Also re how much you can borrow – again different lenders will lend different amounts.

    Is your total deposit $15k and the property purchase amount $350,000? If so then you will be short of a deposit amount particularly since you are not a first home buyer.

    Shahin Afarin – Property Finance Consultant
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    Profile photo of casanovawacasanovawa
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    @casanovawa
    Join Date: 2010
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    Yeah i aim to hopefully get it up around $20,000 within several months, but with the money sitting around for a while it has drifted lower a little…  So that is the first thing to get the deposit amount back up…   Then if I could get a 95% LVR that should allow me hopefully to get the ball rolling…  Just have to find out which lenders allow those…   Does a 95% LVR for $350,000 require $17,500deposit??  Ideally i would like to find some place that i could bargain down to $330,000, but i like the flexibility to be able to go up a little if i have too…

    Then there is a whole bunch of other questions…  Should i wait till i have the deposit saved back up to the needed amount or start contacting a finance broker or two???

    Profile photo of TheFinanceShopTheFinanceShop
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    casanovawa wrote:
    Yeah i aim to hopefully get it up around $20,000 within several months, but with the money sitting around for a while it has drifted lower a little…  So that is the first thing to get the deposit amount back up…   Then if I could get a 95% LVR that should allow me hopefully to get the ball rolling…  Just have to find out which lenders allow those…   Does a 95% LVR for $350,000 require $17,500deposit??  Ideally i would like to find some place that i could bargain down to $330,000, but i like the flexibility to be able to go up a little if i have too…

    Then there is a whole bunch of other questions…  Should i wait till i have the deposit saved back up to the needed amount or start contacting a finance broker or two???

    Hi Mark,

    Your scenario is not overly complex which is great so its good to sit with a broker to explain and answer the questions. For a $350,000 purchase you will require a minimum deposit of $29,000 plus Solicitor Costs (say $1,000) and Building and Pest Inspection (say $600). Now it sounds like $29k will take time to achieve so obviously you can wait or take a personal loan to cover the remaining balance.

    Shahin Afarin – Property Finance Consultant
    http://elitepropertyfinance.wordpress.com/

    TheFinanceShop | Elite Property Finance
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    Profile photo of Marty McDonaldMarty McDonald
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    Keep saving

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    Profile photo of Matt KenworthyMatt Kenworthy
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    casanovawa wrote:
    Does a 95% LVR for $350,000 require $17,500deposit??  Ideally i would like to find some place that i could bargain down to $330,000, but i like the flexibility to be able to go up a little if i have too…

    Correct, that's the bare minimum although you're also going to have to work out how you're going to pay for closing costs as it doesn't seem like your eligible for the first home owners grant and stamp duty concessions (reading between the lines on what you've posted previously).  Depending on your current profile with ANZ you may find that they won't even do a 95% lend as they max out at 90% for customers that don't have a satisfactory credit history with them (credit being the key word, not savings accounts).

    Quote:
    Then there is a whole bunch of other questions…  Should i wait till i have the deposit saved back up to the needed amount or start contacting a finance broker or two???

    If you're getting close to the savings mark it can't hurt to get in contact with a broker to show you your options if you are keen on buying in the near future.

    Profile photo of casanovawacasanovawa
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    @casanovawa
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    Ahhh ok, back in 2010 i think it was i had signed up with Homestart here in WA to build a place down in Bertram, I think the package was about $337,000 or so and I only needed to have saved up about $21,000 i think…  I got to that and had the whole deal pretty much signed and sealed, all I needed to do was provide 1 letter showing one of my credit cards had been closed to bring me down to the allowable amount of credit to have open and still satisfy the loan requirement from whichever bank or finance option they used…  But at that time property prices were falling and interest rates went up about 5-6 times in the year, so I bailed out of the deal as it didn't seem right at the time…

    Not sure if building through one of those house and land package deals made the stamp duty less or whether my wage then was also less and whether that qualified me for any government programs or whether they could wrap some extra costs into the loan…  My salary was still in the $80k range but whether now I'm higher still whether i might not qualify for some govt assistance on stamp duty or somethign that i did back then…   $29,000 will take a little bit of time with $400 a week rent..  :)

    But if anyone would like to have a chat with me, or could recommend a broker I'm all ears…  :)

    Profile photo of Your BrokerYour Broker
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    really personal loan to complete 95% purchase???

    Dustin McMahon
    0430 110 304
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    Profile photo of v8ghiav8ghia
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    Yep…I'm thinking the same! Brings a whole new meaning tho the words creativity & gearing!

    Profile photo of casanovawacasanovawa
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    @casanovawa
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    Ahhh well, if it can get you over the first hurdle of getting into the loan/place… 

    Depends if you would genuinely be hocking yourself to the eyeballs to get a home, or whether it would just speed the process up a little including it not helping to be paying rental payments of close to what the weekly repayments would be plus trying to save up the deposit…

    Profile photo of casanovawacasanovawa
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    @casanovawa
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    Ok, me again…   smiley   My lease at my rental is just about up and they want me to sign up for another 12 months and i don't want to rent that long, plus they are putting the rent up…

    Which means if i say no i have like 60 days or so to move out…  Not sure if i might be able to talk to the owners and maybe negotiate another month or so???

    So went into ANZ on Friday to see about getting a home loan and they said that i almost have enough of a deposit for a $350,000 loan (on thursday will have about $19,000) but the lady said i would need another $12-15k for stamp duty and fees etc, so I was planning today to go to Westpac and see about getting a $15,000 or so personal loan, which hopefully by the end of the week (if its approved) should give me the funds to meet ANZ's lending criteria (I think that should even give me close to the amount of funds required to go up to $370-380,000 loan…)

    The plan would then be to go looking for a place to buy and hopefully i can get settlement and all within that two month period and be in it by mid December…  This is probably being optimistic??  I know it sucks to put myself under such time pressure to make such a big monetary/lifestyle decisions, but as i said don't want to be renting for another 12 months and can't be stuffed moving to another rental for 6 months with all the costs and hassles involved and they would probably want to force a 12 month lease on me in the tight WA rental market anyway…

    So, ANZ, i think the lady said i could go for a variable or fixed loan (with maybe a variable component so that i could make extra repayments over and above the fixed repayments)…  For 3 years fixed it was about 5.69%, but because i'm a customer they could bring that down to 5.5% or so…  On their website i note that a 5 year fixed loan is only 5.99% (hopefully able to be discounted down to 5.7% or so)…  They have a bunch of comparison rates which i don't really understand but 5.5% or 5.7% seems pretty competitive to me as not sure the variable rates will get down that low although their ANZ Simplicity plus package seems to have a variable rate of 6.10% and i think i am eligible for a 0.7 or 0.8% discount so i guess that could be a lower option???

    http://www.anz.com.au/personal/home-loans/compare-home-loan/

    I do like the security of having a fixed loan so i know what i will be up for, but also being able to make extra repayments as my original goal was to either have loan with a redraw or offset account so i could put my full pay in there and live off my credit card for the month and pay the loan down that much more quickly…  So would like to see about being able to get an account with such a redraw or offset account…

    Finally i was thinking about seeing if the bank would allow me if i could get it as an interest only loan which would make my fortnightly repayments i am actually obligated to even lower to give me that extra bit of security as a single person taking out a hefty loan, while all the time having the goal of sticking as much of my pay as possible into the loan and getting ahead of the curve from the start…  And would this also be a decent way of arranging the loan in case in the future i want to rent it out???

    Any thought would be appreciated from the guys that know all about the loans/finance angle or if you know of any other better deal out there…    I might also contact one or two finance brokers to see if they can come and talk me through it…

    Profile photo of PLCPLC
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    Just on ANZ, the ANZ Simplicity product isn't eligible for any discounts, you're thinking of the Breakfree package which is available on the standard variable rate. Also their fixed rate products only allow a certain set amount for extra repayments before penalties kick in, and there is no redraw facility until the fixed rate period ends, and offset feature is only available for the one year fixed product.

    With your deposit, 5% of it needs to be classified as genuine savings which usually means 3 months in a bank account, so if you're looking at a $350K purchase, $17,500 needs to have been in that account for the previous 3 months.

    If you're looking at renting it out in the future, not recommended to pay it off as quickly as possible, generally should be IO with offset so that 1. You can save more in your offset for your future PPOR purchase. 2. Benefit from the deductible debt when it becomes an investment.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
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    Profile photo of Richard TaylorRichard Taylor
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    Hi Mark

    Coming in late in the conversation so will keep my comments brief.

    Firstly Anz mortgage insurer will not approve an application where the deposit has been complimented by a personal loan so go down that track at your peril. Trouble is once you have lodged the P/L application it will be too late as your CRAA will reflect this and lenders that credit score may decline the deal on the spot.

    Secondly whatever she tells you the lady at the local branch cannot approve the loan and will have no sway with Credit. She sends the deal to the same Credit office as we Brokers do.

    Finally i will assume she gave you a LMI quote and told you how much they will capitalise and how much you will have to come up with.

    Must admit if i was tight on deposit Anz would be the last lender i would be approaching but everyone to their own.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    Profile photo of Mick CMick C
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    casanovawa wrote:

    I was planning today to go to Westpac and see about getting a $15,000 or so personal loan, which hopefully by the end of the week (if its approved) should give me the funds to meet ANZ's lending criteria (I think that should even give me close to the amount of funds required to go up to $370-380,000 loan…)

    ^ auto rejection right there…and not only will it be an auto rejection, your credit file will be trashed with this personal loan- which means you will have to delay your plans for another good 6-12 month.

    Going for an 95% LVR loan + LMI ( 97-98%) is not that simple…if getting a personal loan will solve the banks " deposit" problems, then us brokers will def be super busy!!!  

    Going for a 85-90% LVR loan with a personal loan to fund some of the deposit is a difference story…but at 95% no chance. 

    Regards

    Michael 

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    Profile photo of casanovawacasanovawa
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    @casanovawa
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    Ok, well it seems i was lucky when i walked into the Westpac branch to arrange to see someone about taking out a personal loan that they made the appointment for the next day (Tuesday), so maybe i will just hold off seeing them today so that won't appear on my credit record…   smiley

    The deposit has been sitting in my bank account for the last 3 years or so, it did get down to about $13,000 in July because i had to use some of the money, but what 4 months later by Thursday it will be back up to $19,000 and in another two weeks should be close to up over $21,000… 

    The loan would only be for fees and stamp duty etc if that makes any difference…

    So what do people suggest…  I have a car that i could try to sell privately or take to some car yard and like to get $16000-$18000, but prefer to not rush down that route…

    Profile photo of Gazza21Gazza21
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    If you pulled out of the house and land deal why can’t you still get fhog and stamp duty concession?
    Sell the car and buy something cheaper to own and run. Sometimes you have to make sacrifices to get where you want to in life.
    When you’ve got the house rent a room or two out to bring in some extra cash and try to live off that money leaving as much as possible in your offset account. In 12 months you could easily clear 10% of the value.
    And find a motivated seller who you can pick up a 350k house from for 320k, bringing your costs down and giving you instant equity. It might not be quick or easy to find but will be quicker and easier than earning that 30k and you’ll be in a much better position financially than you are now.

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