Yep - that's right. I've written Nab loans early on for plenty of clients - all depends on the customer/scenario.
You don't want to write too many with poor servicing lenders early on either as you can get stuck that way too.
Cheers
Jamie
Can I change my broker ?
- Thread starter almostthere
- Start date
Yep - that's right. I've written Nab loans early on for plenty of clients - all depends on the customer/scenario.
You don't want to write too many with poor servicing lenders early on either as you can get stuck that way too.
Cheers
Jamie
Good early lender to go to. Given their valuation models and decent cash out policy, its a pretty good starting point along with CBA/ANZ.
Cheers,
Redom
Definitely - I've used them plenty of times too. I like their employment policy and genuine savings requirement (90%) in particular. I just sense that it happens without the justification sometimes - which may be broker incentives talking.
Totally agree - it completely depends on the the clients situation and future plans.
I am interested in understanding the mechanics behind this. Are you able to elaborate?
Mick is referring to the fact that the NAB is a fairly generous lender for servicing purposes if you have debts elsewhere.
The logic being that you purchase several properties via other lender, eventually they won't lend any more. At that point you start to use NAB. If you used NAB first, you won't be able to borrow as much compared to if you use them last.
The logic is sound, but it is somewhat simplistic. Others other elements to be considered as well, such as the ability to draw equity from the lower servicing lenders when they won't lend any more. The right balance is fairly tricky to achieve.
The logic being that you purchase several properties via other lender, eventually they won't lend any more. At that point you start to use NAB. If you used NAB first, you won't be able to borrow as much compared to if you use them last.
The logic is sound, but it is somewhat simplistic. Others other elements to be considered as well, such as the ability to draw equity from the lower servicing lenders when they won't lend any more. The right balance is fairly tricky to achieve.
When growing early, you need a couple things:
1) Easy access to cash outs (flexibility)- personally I don't think NAB are that great in this space compared to the other majors. They have a stricter policy in the LMI range, which is generally part of the aggressive accumulation phase.
2) Lender order: ideally you pick the more conservative lenders that treat OFI debt harsher first, and then move to lenders that treat OFI debt at actual repayments later. Overall, this should increase your borrowing. Noting that, as mentioned earlier today, it's not like NAB are the only lender that take actual repayments - so this can be manoeuvred around.
3) Serviceability: you also want to make sure that you have the borrowing power to release the funds. One way to check this is to map out a pathway for the next 12-24 months (2-3+ properties potentially) and see whether equity release is still possible.
Adding one more to the mix that I like; valuation models. This is probably more timely, but given that modelled estimate vals tend to come out stronger, this can really help accelerate the investment journey. Going to a lender that lets you use this can be a 'bonus' that gets you where you want to go quicker.
Eventually as the portfolio matures (5+ properties) beyond a certain point and you've got equity held up in lower serviceability lenders, its likely there'll need to be some refinancing out to higher serviceability lenders. That's why most people with 15-20+ properties hold their debt with Macquarie, NAB, etc. Releasing equity when you get to this stage with low serviceability lenders is next to impossible, so there's refinances out to these lenders.
This is all part of an effective finance strategy. Perhaps worth noting that price is generally down the list in terms of priorities.
Cheers,
Redom
Actually I recall someone posting a little bits of runs downs of each, wouldn't be too detailed.
If you searched across SS you would find it, it's all there
Recently got an IP in Sydney revalued by Westpac, asked for 620 and got 640! Here I thought reval never goes beyond the asking amount.
Def +1 to Westpac's valuation model
At least 6 on my last count with a few via white labels as well.
We are all biased. The word that starts with I and T we cant use
Next ........new entrants will be wanting people in your Aggregator starter kit
, and as the running joke goes a MB or BMW key ta
rolf
I can assist but its not cheap
Tell ya what, I'll trade you a few of my hidden gem supercoach picks.
I've got a matrix that's been built over the years describing various policies, but in truth I've memorised 90% of it so it's very much out of date. It's not going to be useful to the average consumer because there's no context to it.
It's easy to say that this lender has the best servicing and this one the worst, or to give a list of lenders with and without DUAs, but this barely scratches the surface. How to apply this to real life scenarios, understanding how combinations of policies interact with each other is where the real skill is. I'd say about 80% of brokers don't understand this either.
I went to a PD yesterday for a new product release from the aggregator. The people presenting the product where long time industry stalwarts. Some of the advice given caused my eyebrows to raise (involuntarily).
I asked half a dozen questions centered around the serviceability calculator, DUA agreements with LMI providers and general policies. I had the feeling I was talking another language but got the answers I needed
I asked half a dozen questions centered around the serviceability calculator, DUA agreements with LMI providers and general policies. I had the feeling I was talking another language but got the answers I needed
lol - are there any franchise brokers using your aggregator? I usually see those brokers with the "WTF face" when those questions are asked. I think some of them only rock up for the free sandwiches and a cheeky CPD point or two.
Cheers
Jamie
