Best Rates

[Bigtone]

I did say normally I mean for plebs like me

The same? "boys" club deal is around for some medicos and allied, legal folks and "high net worth" individuals, also with Comm I believe.

Interesting that being a client of firm x makes you a lower risk.

ta
rolf

yeah i agree. funny thing is many of us plebs r probably in a better position than their clients but that is often the way these things work

i doubt any new deals like this will be struck these days.

probably in place for a very long time, old school ties etc.

i know a blue bank that have a deal with a law firm for medicos in melb and they do amazing stuff for their clients in the hope they get all the business banking long term, basically lend them $107% on $2m homes straight out of uni but in a tricky way.

not a bad selling point for these firms, come with us and we can provide this ...

helps add a few dollars to the hourly rate

 

[cw318]

Agree, if they charge you $0 for LMI...it's way more beneficial then any discount they might offer...
- LMI is payable from day 1 and not refundable.
- You can always swap lenders after a few years if the rate is not right

Regards
Michael

sorry if this is a dumb question but I don't get why this is a better offer though as nab's offer is also with no LMI

it's just that with NAB's offer I'd have to pay 45000 in principal over 3 years, that's 1250 a month in principal payments (which I have enough in savings), as opposed to (at today's rates WBC vs NAB there would be 0.29% difference) hence 1170 annually in interest, plus early discharge/exit fees if i swap lenders should the rate consistently be much higher.

i guess in simplified terms - WBC will loan 90% no LMI but I have to pay additional 1170 interest per year for this benefit, NAB will loan 90% no LMI but I have to pay 1200 per month in principal but no extra interest. That is until the banks alter their interest rates

rolf thanks for the reminder i do have the offer in writing for nab

seems both nab and wbc are hard to deal with though

 

[euro73]

I've got debts with nab personally as well as a bunch of clients and long term the worst thing is they delay on getting the atm cards out & bank accounts set up. With Nabbroker I get people in Cairns processing my loan applications as they are slow to do it in Brissy (this is nab not homeside). (Well I shouldnt say the worst but after the dust settles if something falls off the rails)

I had dinner with the exec of Nabbroker last week - Homeside has no plans on changing their pricing formulas, they led for the last 18 months and they advise quite openly that they cant see any reason why this wont continue.

Even today they abolished a ton of more fees so their offerings are competitive than they were a year ago.

Past this. If you're not just chasing rate but looking at fees as well, have a look at Bankwest.

over $400k bankwest at 6.80%. nil application, val, setup, package fees currently. if you want an offset $4 pm. I believe also no early repayment penalty.

End of the day each lender has a niche its just figuring out which one suits you
Half the time the issue of rate becomes secondary as its often a case of who will or wont approve the loan due to X,Y,Z.

(not a recommendation just a comment)

I think its 6.90, not 6.80??

http://www.bankwest.com.au/personal/home-loans/home-loan-products/super-start-home-loan

 

[Rolf Latham]

sorry if this is a dumb question but I don't get why this is a better offer though as nab's offer is also with no LMI

it's just that with NAB's offer I'd have to pay 45000 in principal over 3 years, that's 1250 a month in principal payments (which I have enough in savings), as opposed to (at today's rates WBC vs NAB there would be 0.29% difference) hence 1170 annually in interest, plus early discharge/exit fees if i swap lenders should the rate consistently be much higher.

i guess in simplified terms - WBC will loan 90% no LMI but I have to pay additional 1170 interest per year for this benefit, NAB will loan 90% no LMI but I have to pay 1200 per month in principal but no extra interest. That is until the banks alter their interest rates

rolf thanks for the reminder i do have the offer in writing for nab

seems both nab and wbc are hard to deal with though

As a rule, Most of my clients dont like repaying Principal, even at some additional interest cost.

your scenario and allied data doesnt allow one to make a discernement as to what may work better for you.

Some additional hard and soft data might be

1. What sort of tax bill do u have
2. Do u have a ppor if yes, is it owned, or do u have a Non ded debt on it
3. Whats your personal take on debt, as demonstrated what debt u currently carry

and the list goes on

You must either do something "special" for a living, or know some special folks because the 90 % IO sans lmi with WBC isnt a common thing post GFC

ta
rolf

 

[Spectre]

I think its 6.90, not 6.80??

http://www.bankwest.com.au/personal/home-loans/home-loan-products/super-start-home-loan

Cut and paste of part of an email from my BDM. Product is a premium select over $400k.

Great New Offering from Bankwest effective Wednesday 2/3/2011 until Friday 27th May 2011.

You can offer your clients No Application fee, No Monthly fee, No Annual fee and rates for 6.80% ongoing discounted variable rate

No application fees across all products at all available LVRs (excludes Equity Release & Lite Plus home Loan)

 

[Mick C]

sorry if this is a dumb question but I don't get why this is a better offer though as nab's offer is also with no LMI

it's just that with NAB's offer I'd have to pay 45000 in principal over 3 years, that's 1250 a month in principal payments (which I have enough in savings), as opposed to (at today's rates WBC vs NAB there would be 0.29% difference) hence 1170 annually in interest, plus early discharge/exit fees if i swap lenders should the rate consistently be much higher.

i guess in simplified terms - WBC will loan 90% no LMI but I have to pay additional 1170 interest per year for this benefit, NAB will loan 90% no LMI but I have to pay 1200 per month in principal but no extra interest. That is until the banks alter their interest rates

rolf thanks for the reminder i do have the offer in writing for nab

seems both nab and wbc are hard to deal with though

ROLF has answered the question,

But what im saying is - personally if i was in your situation; i would prefer the NO lmi option EVEN if the interest rate is 0.2% more. As time progress, say 3-4 years time; the home value would have gone and the LVR would have reduced to a point where refinance with NO LMI is possible at a better rate if required.

Having said that another aspects of the deals/loan needs to be taken in consideration to determine which might be the superior deal ( ie tax...etc)


Regards
Michael

 

[ashalim]

As time progress, say 3-4 years time; the home value would have gone and the LVR would have reduced to a point where refinance with NO LMI is possible at a better rate if required.

Hi Mick,

When everyone refers to "No LMI" for loans over 80%, does that mean the application still have to go through the insurance underwriter but the LMI costs are absorbed by the bank? Or, it won't go to the underwriter and therefore no LMI fee?

 

[Mick C]

Generally speaking at 80-85% LVR- some lenders wouldn't take it to the LMI provider at all, so no insurance in place. Risky for them as a business; hence they are strict on the type of deals.

85% + It will still go to the LMI provider, but the cost will be absorbed by the lender.

The history behind this is, 30% of funding comes from Saving accounts and term deposits....the another 70% comes from Overseas market and private investors...and rate the banks gets the initial money tends to be more expensive if it's not insured once the LVR goes over 80% ...so ALL banks will have LMI in place for loans over 80%LVR to offset this "surcharge" ; any loans btw 80-85% can be placed in the "30% funding from saving accounts" so the cost of funding remains the same; just a higher risk to the business.


Regards
Michael

 

[cw318]

As a rule, Most of my clients dont like repaying Principal, even at some additional interest cost.

your scenario and allied data doesnt allow one to make a discernement as to what may work better for you.

Some additional hard and soft data might be

1. What sort of tax bill do u have
2. Do u have a ppor if yes, is it owned, or do u have a Non ded debt on it
3. Whats your personal take on debt, as demonstrated what debt u currently carry

and the list goes on

You must either do something "special" for a living, or know some special folks because the 90 % IO sans lmi with WBC isnt a common thing post GFC

ta
rolf

Thank you for the explanations rolf and mick. No i don't see myself as having a "special" job or have any connections. I think there is so much to learn in this area and have great respect for people like you who know so much and are willing to share your knowledge.

I agree totally that the bias towards certain professions when negotiating loans is unfair particularly for seasoned investors who own a lot more properties and investing experience than me.

My PPOR changed to an investment property so at the moment I have no non-deductible debt, and the rental is contributing to about 60% of the interest on the loan. I am in a fortunate position where I don't have any other debt and pay off all the bills/credit card bills each month.

In exploring the options, I'm going to find middle ground and ask NAB for 85% IO with no LMI plus 5% P+I. If I can afford another IP in a few years time, I will access that 5% principal I paid plus available equity from the increased property value (hopefully) for the next IP.

 

[Mick C]

You sound determine and i can tell you have experience in the area of property investment and wealth creation and you know exactly what your doing! Good work.

Regards
Michael

 

[cw318]

Thanks Mick for the kind words.

Just wanted to update that NAB has approved my request for the property loan under the family trust for the 85% IO with no LMI and extra 5% at P+I.