Another Mortgage Broker advise question...

[robertye112]

Hi Guys,

I am new to this forum and tried to read as many posts that were similar to my question before posting.

I would like to know what the best bank is in the current market for my investment property.

My current situation is this:

credit card debt: nothing
car debt: nothing
savings: nothing
children/depdents: 0
investment properties: trying to buy 1 off mother in law right now for $650 K
houses owned: 1 x valued at $1.3M

original home loan status: (1 year ago): With CBA. Last year started off at $800k split up into 2 loans.
1 x fixed 2 years at 4.99% -$579,800.00
1 x variable at 5.1% -$243,855.00
current home loan status:
1 x fixed 2 years at 4.99% -$565,851.86
1 x variable at 4.95% -$32000 (available redraw is $202,350.47)

my income: $204 k per year (self employed)
fiances income: $120k per year (self employed)
misc notes: I only started the company 10 months ago (same line of work just went
from PAYG to company, no career change for 8 years)


The current broker I am with is suggesting I go with homeside. He claims he can get "roughly" 4.75% when my fixed CBA loan is out of contract (1 more year left) and we change it over to homeside.

I would like to prefer to stay with CBA but he says CBA probably won't approve my loan based on my finance (maybe he means because we are both self employed?)

Recapping my question:

1. What's the best bank in the current market for my investment property.
2. I would like to stay with CBA even if they are more expensive because I personally much prefer them over other banks. Is it true that it's harder/not possible to get the IP loan with them?

Thanks!
-Robert

 

[Mick C]

I can't comment on CBA approving the loan or not as will need a bit more details. but i really can't see how Homeside is beneficial in this scenario or why homeside would be more superior than CBA ( unless it's for serviceability reasons only)

1. Homeside charges $10 per month per loan split...so you already have 2 loan split + 1 new one that's around $360 per year so having multiple or more splits in the future with Homeside will cost you more in fees

2. The 10 month self employed; this is where CBA would actually shine over homeside! even though they both have DUA ( ability to approve the loan in house especially under 80% lvr) for out of the box scenarios CBA is pretty good.

3. Homeside's variable rate would be very similar if not the same as CBA due to your loan size

If your "Rate" chasing" than CBA would be ok as a lender due to the size of the loan. Everything is negotiable at that size.

4. Since your preference is CBA, i can't see why you need to refinance when the rate is the same, fees could be potentially higher and your not happy with the chosen of lender.

5. 4.75% variable on your loan size is doable with CBA at 80% LVR or lower.
especially sine your bringing more money/lending to the bank.
-----

Which is the best bank for iP in the current market- to general, there's no ONE bank that fits all...especially given your file is not your standard mum and dad file ( ie 10 month ABN) and the "definition" of best bank will diff btw borrowers

- Soms are rate chasers only
- Some are after the highest LVR
- Highest lending
- Ability to draw out equity
- Features ( offset etc...)
- Fix or variable rate
- Chance of approval
- Ability to support their 3-10 years financial goal

 

[Brady]

Hi Guys,

I am new to this forum and tried to read as many posts that were similar to my question before posting.

I would like to know what the best bank is in the current market for my investment property.

My current situation is this:

credit card debt: nothing
car debt: nothing
savings: nothing
investment properties: trying to buy 1 off mother in law right now for $650 K
houses owned: 1 x valued at $1.3M

original home loan status: (1 year ago): With CBA. Last year started off at $800k split up into 2 loans.
1 x fixed 2 years at 4.99% -$579,800.00
1 x variable at 5.1% -$243,855.00
current home loan status:
1 x fixed 2 years at 4.99% -$565,851.86
1 x variable at 4.95% -$32000 (available redraw is $202,350.47)

my income: $204 k per year (self employed)
fiances income: $120k per year (self employed)
misc notes: I only started the company 10 months ago (same line of work just went
from PAYG to company, no career change for 8 years)


The current broker I am with is suggesting I go with homeside. He claims he can get "roughly" 4.75% when my fixed CBA loan is out of contract (1 more year left) and we change it over to homeside.

I would like to prefer to stay with CBA but he says CBA probably won't approve my loan based on my finance (maybe he means because we are both self employed?)

Recapping my question:

1. What's the best bank in the current market for my investment property.
2. I would like to stay with CBA even if they are more expensive because I personally much prefer them over other banks. Is it true that it's harder/not possible to get the IP loan with them?

Thanks!
-Robert

Why did the broker suggest homeside? Did he say that you couldn't service a loan through CBA based on your income? Or issues with your s/e income.

Is the income you stated for s/e net income after expenses or gross profit?

Do you have any dependants?

Was your PAYG similar to your current self employed income? Have you lodged a tax return or BAS

 

[Aaron_C]

Too hard to say on the information presented....

 

[robertye112]

ok so for clarity I will add some more details to this message and also edit them into the original post.

when I got the loans with CBA I was for all intensive purposes full time employed. after I got the loan I made the switch to self employed.

I spoke to my original lending agent at CBA and he said he could not give me another loan without 2 years of tax history with my new self employed ABN. He said he could negotiate it down to 1 year based on my existing relationship with CBA.

The broker also claims that CBA needs 2 years of tax history with the new ABN but homeside (for some strange reason) doesn't need it.

income stated is gross income before tax. as far as servicability goes homeside will approve my loan on my wage alone. The current mortgage is also in my name only.

0 dependents.

 

[Aaron_C]

For policy exceptions for self employed, CBA tend to be the best and they also have the best credit assessors from my experience. What are you going to do with the new IP? Build 3 units?

 

[Brady]

ok so for clarity I will add some more details to this message and also edit them into the original post.

when I got the loans with CBA I was for all intensive purposes full time employed. after I got the loan I made the switch to self employed.

I spoke to my original lending agent at CBA and he said he could not give me another loan without 2 years of tax history with my new self employed ABN. He said he could negotiate it down to 1 year based on my existing relationship with CBA.

The broker also claims that CBA needs 2 years of tax history with the new ABN but homeside (for some strange reason) doesn't need it.

income stated is gross income before tax. as far as servicability goes homeside will approve my loan on my wage alone. The current mortgage is also in my name only.

0 dependents.

2 Years wouldn't be required for CBA.

Likely unexperienced CBA staff member who you were dealing with, along with a broker who doesn't have much experience with CBA.

CBA is usually really good with these things. Don't think you would have too much trouble.

 

[robertye112]

Was your PAYG similar to your current self employed income? Have you lodged a tax return or BAS

yes PAYG was 85%-90% of current wage

I have lodged 2 quarterly BAS only for new ABN

 

[robertye112]

For policy exceptions for self employed, CBA tend to be the best and they also have the best credit assessors from my experience. What are you going to do with the new IP? Build 3 units?

for now it will sit and do nothing. was that a joke? Because funnily enough the plan is to buy the property next door and build townhouses in 10 years. (needs rezoning etc)

Thanks Mick, Brady and Aaron I think I will go talk to someone else at CBA about the home loan and see what they say.

 

[Brady]

yes PAYG was 85%-90% of current wage

I have lodged 2 quarterly BAS only for new ABN

With this info shouldnt be a problem.

 

[Rolf Latham]

the fixed rate loans will restrict u a little in moving ...........

so better make it work with CBA then

ta
rolf

 

[Aaron_C]

No joke...building multiple units is a Homeside niche.

 

[robertye112]

I work in martin place so just ducked into the branch.

basically you guys were correct (I never doubted anyone)

they say they will get back to me by friday and are fairly confident it should be fine based on all the facts I provided here.
Looks like the original CBA lender I was talking to is not as experienced as this other lender in the martin place branch. He did mention it is all about wording it correctly to the credit team.

Thanks guys!

This forum has proved to be more valuable and accurate than my trusted broker.

Aaron - will keep that in mind for when I'm ready to take on that project