Can I change my broker ?

[almostthere]

Hi,

I am quite unhappy with my current mortgage broker through which I got my IP1 loan which is now 6 months old..

My loan is with NAB and my broker do provide following

- 1 free re-valuation every six month
- 1 loan interest review every three month

However, they are not that responsive and doesn't show much interest to my enquiries, neither reply to me on timely fashion anymore. Also for the last reval I think they didn't do enough like for e.g they didn't provide good owner's expectation figure and recent sales figure in the area..I also had to remind them couple of time to request revaluation from the bank..

As I am targeting to purchase IP2 in at least next 6 months time frame I would like to team up with a good broker ..(mostly with someone from somersoft)..but as I already have loan#1 through my current broker , I was wondering if I can change the broker now ..and can still have the same benefits from the bank with respect to free periodic re-valuation and interest review ?

Thanks in advance..

 

[j_p]

Get a new one if you're not happy.

3 months is too short a time frame for reval and a brokers word is worth naught practically, bank val is all they will lend on and they wont do them 3 monthly and a prop will only sell at what the market will pay. Sounds like worthless "value adds" to get your business to me.

Plenty of ones that people are more than happy with on these forums.

 

[almostthere]

Get a new one if you're not happy.

3 months is too short a time frame for reval and a brokers word is worth naught practically, bank val is all they will lend on and they wont do them 3 monthly and a prop will only sell at what the market will pay. Sounds like worthless "value adds" to get your business to me.

Plenty of ones that people are more than happy with on these forums.

thanks for the reply .sorry it was a typo..reval is every 6 months ..interest review is every 3 months

 

[Mick C]

Your loan is most likely with Nab broker ( ie you pay $10 p/m for your loan)...the valuation with NAB is free for ALL brokers- so yes a new broker who takes on your file will be able to do the re-valuation upfront.

However having said that a re-value every 3 month randomly is really pointless unless there is a a reason for the increase ie renovations/ bought under market value. As most valuer will cap the "market increase" if it's only been 3 month....

Also an interest review every 3 month is a bit extreme as well...i can;t see any of my clients refinancing after 3 month + to rate won't have move that much in 3 month if at all....will def kill your credit file.

--------

the key is planning
- When to do a re-value
- Which lender
- What rate VS LVR VS the benefit of the lender.

Also in your post you mentioned you wanted to buy a 2nd IP using equity from IP1 in a short period of time...so i presume your looking at building a portfolio of properties over a 1-4 years time frame- than im sorry to say NAB is def not the right lender for your 1st property ( General advice only...as there could have been a valid and good reason to go with NAB) ....NAB only fits some investors but def not for an aggressive investor + one that target equity a big no no....

Your broker should be telling you want to do...ie planning and mapping it out for you.

 

[Michael_X]

You can certainly change brokers after the first IP.

On some of the benefits you listed:

Valuation every 6 months - I don't see this so much as a perk but should be tied into your strategy. What are you trying to achieve? Is it an equity draw for the next purchase or simply to know the value of the property. If you are looking to release equity then sure get the revaluation but if there isn't a need I wouldn't get one every 6 months just for valuation sake.

Interest Review - Best to review when you are adding properties to your portfolio, refinancing or there is a drop in interest rates. You will have more success.

As Mick C mentioned above, you should be future planning with your broker. Map out your end goal and how to get there. This is alot more important than rates & valuations.

Plenty of good brokers on Somersoft to pick from - good luck!

 

[Redom]

Heya,

Not a problem to change brokers for IP2 - apart from my younger clients, most of my clients had existing relationships with brokers/lenders in the past. I'm fairly sure the others would have similar experiences.

Best to have someone on your team that takes a strategic approach, rather than looks at each deal in isolation. If your on a path of accumulation, this will end up saving you and most importantly, earning you $$$. Mapping out your finances from where you are now to where you want to be and being a few steps ahead will help you grow your portfolio further. Personally, I find being educated about how financing works and how far you can go helps you form your own investing strategy.

It's not that usual to go to NAB first unless there is a specific need to. When recommending NAB i think its always best to have a strong justification, they've got market leading trial commissions and this is often the reason why brokers pick them (rather than for specific serviceability/policy reasons). It's not be all end all as there are others on the high serviceability spectrum that you can go to, but a potential red flag.

In terms of ordering valuations, brokers get access to them upfront. If there's a justification for ordering one, then your existing/new broker is unlikely to have a problem ordering one for you. If this is your plan, its best to be sub 80%, as you'd likely benefit from valuer shopping. We consistently see big variations in valuations of the same property, so having the flexibility to choose valuers can get you more $$$.

Cheers,
Redom

 

[Jess Peletier]

Was there a specific reason your broker went with NAB so early on? If you are growing a portfolio, they are an unusual first choice and it could make expanding difficult down the track.

Definitely sit down with a different broker to map out your course, not all brokers are good at structuring an investment portfolio and tend to think more in terms of 'this one right now' rather than how to get from IP1 to 3,5 and beyond.

 

[Jamie M]

Of course you can change brokers. If you're not happy with any professional you use - choose another and move on.

Cheers

Jamie

 

[Hodge]

If you want a fast responsive broker contact Jamie M. You'll get a response before clicking send!

Your current broker sounds like my old broker - useless!

 

[oc1]

You need a responsive broker. Hit up Corey so he can plan the next few steps out for you. Makes everything much clearer.

 

[Colin Rice]

Check your current brokers credit guide/qoute for a clawback on commision if you are going down the refi track with another broker. From memory its 18 months until the clawback expires.

As others have stated NAB arent the best choice when starting out on the accumulation phase and not usually a train wreck if this has happened to you. There may be a legitimate reason for going with NAB or it could be renumeration based or familiarity with that lender.

 

[almostthere]

Also an interest review every 3 month is a bit extreme as well...i can;t see any of my clients refinancing after 3 month + to rate won't have move that much in 3 month if at all....will def kill your credit file.

It is not a refinance I believe, but please correct me if I am wrong.
When I took my loan back in August,2014 the interest rate they offered me was 4.99%. I requested a rate review after 4 months with my bank (through my broker) and they lowered the interest rate to 4.83% , they didn't ask for anything at all..and the decision was taken with a weeks time ..was this a refinance, did it affect my credit file ? Please clarify

 

[almostthere]

Was there a specific reason your broker went with NAB so early on? If you are growing a portfolio, they are an unusual first choice and it could make expanding difficult down the track.

Heya,

It's not that usual to go to NAB first unless there is a specific need to. When recommending NAB i think its always best to have a strong justification, they've got market leading trial commissions and this is often the reason why brokers pick them (rather than for specific serviceability/policy reasons). It's not be all end all as there are others on the high serviceability spectrum that you can go to, but a potential red flag.

i presume your looking at building a portfolio of properties over a 1-4 years time frame- than im sorry to say NAB is def not the right lender for your 1st property ( General advice only...as there could have been a valid and good reason to go with NAB) ....NAB only fits some investors but def not for an aggressive investor + one that target equity a big no no....

Your broker should be telling you want to do...ie planning and mapping it out for you.

No , I don't think there were any specific reason (from my side) to go to NAB for my first loan.

This was my first loan. I didn't have any other debt (any form).
The application was a joint (with my spouse) and our combined annual salary is around $125k.

The loan was for a IP worth about $450k and the LVR was 88%.

Do you see any reason to go with NAB in this scenario ? I am now more worried that I didn't choose a right broker for my need.

 

[Redom]

No , I don't think there were any specific reason (from my side) to go to NAB for my first loan.

This was my first loan. I didn't have any other debt (any form).
The application was a joint (with my spouse) and our combined annual salary is around $125k.

The loan was for a IP worth about $450k and the LVR was 88%.

Do you see any reason to go with NAB in this scenario ? I am now more worried that I didn't choose a right broker for my need.

Its not the end of the world, just unusual. Could be because of employment situation or genuine savings not evidenced until 90%.

Cheers,
Redom

 

[Redom]

It is not a refinance I believe, but please correct me if I am wrong.
When I took my loan back in August,2014 the interest rate they offered me was 4.99%. I requested a rate review after 4 months with my bank (through my broker) and they lowered the interest rate to 4.83% , they didn't ask for anything at all..and the decision was taken with a weeks time ..was this a refinance, did it affect my credit file ? Please clarify

No this isn't a credit hit.

 

[Peter_Tersteeg]

It is not a refinance I believe, but please correct me if I am wrong.
When I took my loan back in August,2014 the interest rate they offered me was 4.99%. I requested a rate review after 4 months with my bank (through my broker) and they lowered the interest rate to 4.83% , they didn't ask for anything at all..and the decision was taken with a weeks time ..was this a refinance, did it affect my credit file ? Please clarify

All they did was contact the bank, negotiate a better rate and it was applied to your existing loan. They should have done this when you originally took the loan, the same rates have been negotiable with the NAB for over 12 months now.

The NAB are fairly competitive with rates. I suspect this is the reason the NAB was recommended in the first place. If you ask for a rate review in another 3, 6 or 12 months, unless you've borrowed more money the rates will likely remain the same.

Honestly I don't think a rate review every 3 months and a valuation every 6 months is that much value. At some future point there might be an offer with a cheaper rate, but the cost of moving is still about $800 on average. You're probably not going to recover than much in less than 18 months on a 'rate review'. By that time someone else will have a better deal and you may want to move again. A strategy of hopping from one lender to another tends to cost more than it saves. The trick is to be with a lender that's consistently competitive and you've already got that.

A valuation every 6 months is also fairly pointless. At a minimum you need about 15% of the purchase price to purchase a property. Over a 6 months period you might achieve 5% growth in your property if you're doing well. If you genuinely believe the market has moved a significant amount, contact the broker but a 5% increase rarely justifies a top up or refinance.

I doubt these statements will win me any favors, but it is what it is. Reviews every 3 to 6 months is unsustainable for a broker that is busy and frankly it's fairly pointless for the client.

 

[Jess Peletier]

No , I don't think there were any specific reason (from my side) to go to NAB for my first loan.

This was my first loan. I didn't have any other debt (any form).
The application was a joint (with my spouse) and our combined annual salary is around $125k.

The loan was for a IP worth about $450k and the LVR was 88%.

Do you see any reason to go with NAB in this scenario ? I am now more worried that I didn't choose a right broker for my need.

Don't stress if you didn't, it's not the end of the world and is fixable down the track. Many brokers are just fine at one-off purchases but people looking to buy multiple IP's have different needs.

For now it's probably fine - when the time comes for IP2, the broker you choose will be able to determine the next step which may or may not include moving away from NAB. As Colin said, you may be up for claw-back fees on the commission Broker 1 got paid if you refi too soon.

 

[Redom]

I doubt these statements will win me any favors, but it is what it is. Reviews every 3 to 6 months is unsustainable for a broker that is busy and frankly it's fairly pointless for the client.

I think this is fair Peter. Unless there's a specific need to, its not the most valuable contribution.

 

[Redom]

Don't stress if you didn't, it's not the end of the world and is fixable down the track. Many brokers are just fine at one-off purchases but people looking to buy multiple IP's have different needs.

For now it's probably fine - when the time comes for IP2, the broker you choose will be able to determine the next step which may or may not include moving away from NAB. As Colin said, you may be up for claw-back fees on the commission Broker 1 got paid if you refi too soon.

While it irks me to see NAB loans being written so early (mainly because i think its trial incentives for the broker talking) there's often a genuine purpose for it. The need to refinance out because of going to NAB early is perhaps a touch strong - picking the wrong lenders early can definitely hamper portfolio growth, but it shouldn't need a refinance early in the piece.

More often then not, I find the refinancing goes the other way. From ANZ/CBA/conservatives --> NAB/Adelaide/Macquarie/AMP.

Theirs a few competing lenders at the higher serviceability spectrum, so its not like NAB are your one and only bet. AMP are a little unique given their calculator niche (rental income), but there's a few that do what NAB do.

Cheers,
Redom

 

[JameZ]

While it irks me to see NAB loans being written so early (mainly because i think its trial incentives for the broker talking) there's often a genuine purpose for it. The need to refinance out because of going to NAB early is perhaps a touch strong - picking the wrong lenders early can definitely hamper portfolio growth, but it shouldn't need a refinance early in the piece.

More often then not, I find the refinancing goes the other way. From ANZ/CBA/conservatives --> NAB/Adelaide/Macquarie/AMP.

Theirs a few competing lenders at the higher serviceability spectrum, so its not like NAB are your one and only bet. AMP are a little unique given their calculator niche (rental income), but there's a few that do what NAB do.

Cheers,
Redom

Redom, where does Westpac sit in the spectrum you described above?