asouParticipant@asouJoin Date: 2015Post Count: 23
My colleague referred me to https://www.loans.com.au/home who is currently offering a 4% low mortgage rate with an offset account as well. I got my loan pre-approved with Aussie mortgage for 4.6% Dec last year but I am thinking switching to http://www.loans.com.au because they offered such a low mortgage rate. Does anyone have any experience on this?Sam SchuurParticipant@samschuurJoin Date: 2015Post Count: 1
In my experience, you get what you pay for with online mortgage companies such as loans.com.au. This isn’t necessarily going to bother you, but the service you receive will be much greater with a ‘standard’ lender. My profession is a mortgage broker, send me a message if you’d like my recommendation on lenders that I’ve dealt with over the years.
CheersRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,010
With 24 years experience as a broker and professional investor I personally wouldn’t touch such online lenders.
What you have to remember is yes the rate might look attractive on the way down but as soon as rates increase these lenders will be the first inline to increase them as their funding rates increase.
Their policies are limited and certainly not for progressive investors.
If you are after a 5 minute rate then sure they are the boys for you.
Yours in Finance
Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
- This reply was modified 4 years, 5 months ago by Richard Taylor.
It’s a sharp rate – works well for some, not for others.
If you’re simply purchasing the one property and want to pay down the loan as quickly as possible then go with an online cheapie.
If you need additional functionality (ability to access equity, etc) then they may not be a good fit.
Also – I’m not sure how the post relates to the “best mortgage broker out there”?
JamieStannisParticipant@ben-stanton0Join Date: 2015Post Count: 23
I agree with all the above. Mate, rates are important, but it isnt be all and end all.
I’ll give you an example.
So you want to purchase an investment property on a decent block and decide to build a granny flat to rent. This would give you some good cash flow that you need in order to balance or offset a future negative cash flow property. Now broker A with the best rate may just say “go with Bank X because of the 4.1% rate” and you settle with a loan for the purchase of the initial IP. You go to build the GF and find out that Bank X will refinance, but only at 70% of the perceived value of the GF. As a result you end up chipping in another 10 or 15% than you originally expected. This can equate to $15k+ depending on the size of the GF and the quality of the build.
Now broker B may know that bank X will lend only 70% of the GF, so advises you to go with a different bank, Bank Z. Bank Z has a higher interest rate of 4.25%, however will lend at 85% – which means you keep more capital in the bank. You save $15k on the capital towards the GF, but you pay more on the interest rate. How much does this equate to? Looking at the above – the difference on a $450k loan between 4.1% and 4.25% is a grand total of $675 for the year. I know which one I’d take.
Structuring your loans with the right lenders is important. A decent broker will be able to give you this advice, and even if you aren’t doing these types of investments, your broker should know the score – surround yourself with a good team that can advise you when you become more and more sophisticated with your investments.
Its not always about the rate.
Good luck and happy investing.
BenPLCParticipant@plcJoin Date: 2012Post Count: 400
Horses for courses. An online lender may work well for you, it may not.
Until you delve more into your personal scenario and go through your goals, you really won’t be able to tell.
- This reply was modified 4 years, 5 months ago by PLC.
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