Bank direct or broker

[Snoopy]

Hi all - have worked for banks and have a private banker looking after me so i have stayed with a bank directly for 15 years. (only changed banks once in that time)

The key for me is to be able to get finance to do small developments at resi rates. I have stayed with a big bank for this reason as i am able to work directly with these guys and feel a level of trust if they tell me something eg if a run a scenario and they say it can be done i feel i can rely on it and have been able to so far.

However the service in general is atrocious and i have to follow up heaps. For example i asked for some revals and took several weeks to get this organised with no urgency. If i make a formal approval it comes through eventually but takes heaps of follow up.

My friends tell me to deal with a broker as they do but i have never used a broker before and feel like i would lose some control...

thoughts??

thanks

 

[Aaron_C]

What exactly are you looking to do in terms of small developments? A broker will chase things up for you but more importantly will put the deal where it will fit. Always pick the lender that suits what you want to do, not the other way around!

 

[Snoopy]

I have done a 4 to 6 townhouse development where i hold all properties now; bank treated a portion of the loan as Commercial so i Strata titled it and moved it to another bank. Have another DA approved site ready to go.

I am fairly conservative and would take me a lot of convincing to move from the big 4; would never go to non-bank as i saw what happened during the GFC

 

[oc1]

The key for me is to be able to get finance to do small developments at resi rates.

I would have thought the key is to get the funding even if it's commercial. Pay 1.5% more - big deal. It's only while you build. Refinance at the end.

Oscar

 

[Snoopy]

maybe.... its not just the 1.5% is it? its also the application fees which is usually a %, Lsf and all the other costs on a commercial loan

i try and really focus on the small details for the margin;2%pa for 18 months can be 3% for the project; i am trying to work on small/mid size lower risk developments. These don't have a big margin in any case - so all the little bits make a difference

 

[Aaron_C]

I have done a 4 to 6 townhouse development where i hold all properties now; bank treated a portion of the loan as Commercial so i Strata titled it and moved it to another bank. Have another DA approved site ready to go.

With 4 units, residential lending is possible. Beyond that, it will be commercial.

I am fairly conservative and would take me a lot of convincing to move from the big 4; would never go to non-bank as i saw what happened during the GFC

For commercial deals it is not the non-banks so rest assured!
A broker would look at more than that - for example, by uncrossing your securities, maximising your LOCs etc.

 

[Rolf Latham]

I reckon the slow service, low rates and low fees mix is as good as it gets - perhaps look at changing branches so you end up with a more pro active person.

ta
rolf

 

[Shaneelastic]

I have done a 4 to 6 townhouse development where i hold all properties now; bank treated a portion of the loan as Commercial so i Strata titled it and moved it to another bank. Have another DA approved site ready to go.

I am fairly conservative and would take me a lot of convincing to move from the big 4; would never go to non-bank as i saw what happened during the GFC

i had to laugh at these two statements in red

 

[Shahin_Afarin]

At least 2 lenders will accept 4 unit construction loan on a single title provided that they are self contained and DA is in placed for staged subdivision.

Just double check the postcode as well.

 

[Shahin_Afarin]

Your biggest hurdle/issue is going to be the valuation. You need to do a significant amount of prep work to ensure that you get the best possible valuation amount.