discount lender possible for wealth building?

Hi Guys,

My personal experience. I currently have a sole home loan with Westpac and lodged an app to refinance to loans.com.au. The application was lodged mid-Sep, believe or not I have yet obtained a final approval.

I'm in stable employment to a single employer for 5 years, the borrowing amount is far less than my capacity (470k vs 650k). On top of that, I have equal amount of cash sitting in the loan offset account through savings. I was planning to use that equity in offset account to acquire an investment property, and go with the same lender.

I have a spotless credit history, no other debt, no dependent, not even own a car, credit limit altogether is 12% of annual package, and balance is paid off every month.

Only thing of problem is my employer doesn't provide pay slip, but my salary credit into my account every month. Together with tax statement and group certificate for last 3 years. It's good in anyone's call.

After multiple round of communication back and forth, my loan manager essentially called me once very week, and demanded more proof. I ended up giving them financial statement of every account I have. And finally they told me I can only get 75% LVR (They say it's because I recently refinanced within Westpac to get rid of the early exit fee), and it's still subject to final approval after 2 months!

At this point I'm fed up. I don't need to refinance anyway, I'm really after building a property portoflio at best cost. I don't know if I should just give up on the 220 bucks I paid for the evaluation, and go with a mainstream lender. Or I should continue with loans.com.au and hope for the best, assuming next time when they would go easy on me because I already got a loan account with them.

Anyone here has experience using a discount lender to build a property portfolio would like to share their story? Very much appreciated!
 
Stick with a major or reputable second tear lender if you want to invest in property for many and varied reasons.

loans.com.au and the like have their place if you are looking for a no frills cheap set and forget type loan on a PPOR. In saying that if things turn for the worst I suspect they wont be the cheapest anymore?

I am in the process of pulling someone out of Ubank as they want to buy IP#2 and they have the other IP with loans.com.au which will likely follow in the future for similar reasons.
 
Stick with a major or reputable second tear lender if you want to invest in property for many and varied reasons.

loans.com.au and the like have their place if you are looking for a no frills cheap set and forget type loan on a PPOR. In saying that if things turn for the worst I suspect they wont be the cheapest anymore?

I am in the process of pulling someone out of Ubank as they want to buy IP#2 and they have the other IP with loans.com.au which will likely follow in the future for similar reasons.

Yeah, it's a lesson well learnt. That is another thread telling ubank not lend to properties with granny flat.

Lenders should lay out their terms explicitly or it's material non-disclosure to consumer, I think we should entitled to know who's do and don't before any fee is charged.
 
Yeah, it's a lesson well learnt. That is another thread telling ubank not lend to properties with granny flat.

Lenders should lay out their terms explicitly or it's material non-disclosure to consumer, I think we should entitled to know who's do and don't before any fee is charged.

Not really feasible for 2 reasons
1) Theres infinite combinations of all these circumstances people have
2) If people knew the exact way to get approved they'd purposefully/fraudulent dress themselves up as such
 
On line lending is a fast growing market segment as it appeals to the masses who have been brainwashed to be fixated on THE RATE!

A sign of a good meeting is when its never mentioned
 
Hi Guys,

My personal experience. I currently have a sole home loan with Westpac and lodged an app to refinance to loans.com.au. The application was lodged mid-Sep, believe or not I have yet obtained a final approval.

I'm in stable employment to a single employer for 5 years, the borrowing amount is far less than my capacity (470k vs 650k). On top of that, I have equal amount of cash sitting in the loan offset account through savings. I was planning to use that equity in offset account to acquire an investment property, and go with the same lender.

I have a spotless credit history, no other debt, no dependent, not even own a car, credit limit altogether is 12% of annual package, and balance is paid off every month.

Only thing of problem is my employer doesn't provide pay slip, but my salary credit into my account every month. Together with tax statement and group certificate for last 3 years. It's good in anyone's call.

After multiple round of communication back and forth, my loan manager essentially called me once very week, and demanded more proof. I ended up giving them financial statement of every account I have. And finally they told me I can only get 75% LVR (They say it's because I recently refinanced within Westpac to get rid of the early exit fee), and it's still subject to final approval after 2 months!

At this point I'm fed up. I don't need to refinance anyway, I'm really after building a property portoflio at best cost. I don't know if I should just give up on the 220 bucks I paid for the evaluation, and go with a mainstream lender. Or I should continue with loans.com.au and hope for the best, assuming next time when they would go easy on me because I already got a loan account with them.

Anyone here has experience using a discount lender to build a property portfolio would like to share their story? Very much appreciated!

Without getting into the policy side of things we see this happen a lot with 2nd or 3rd tier lenders when they release a sharp rate to the market. A recent example is ME bank and their credit assessment times are now 9 working days and Bankwest was out to 11 days at one point, these are the optimistic turn around times as they only start the clock after a few days!! I personally look for policy, consistency of service then rate as it could cost you a lot more in the future for lousy service.
 
Totally agree with Jon you work with a lender that is competitive but consistant in it's product, policy and service levels.

Too often a lender will have a particularly product / rate that means it attracts a lot of short term business but in the long term and for part of an overall wealth creation strategy you may well find you do yourself more damage than good.

As far as lenders setting out all of the policy details and letting you know up front what they will and will not do that will be the day.

Too often what a BDM states or what is shown in a lenders credit policy and what an credit assessor accepts can too different things.
 
Lenders should lay out their terms explicitly or it's material non-disclosure to consumer, I think we should entitled to know who's do and don't before any fee is charged.

Happens the other way round a lot too...........

Obkectively, the lender should not have taken the application in the first place, but therein lies the advice vs price gap.

Id assume there was no fe ?


ta
rolf
 
hope for the best,

Im fine with all on your post bar this ................

In saving some dollars on rates and fees are you really willing to to hope and pray that it will be all ok ,and try to build a portfolio around that.

Its not a criticism, its a straight question to ponder.


ta
rolf
 
Happens the other way round a lot too...........

Obkectively, the lender should not have taken the application in the first place, but therein lies the advice vs price gap.

Id assume there was no fe ?


ta
rolf
Hi Rolf,

Sorry, what does fe stand for? Or you mean fee? In which case that's $220 valuation fee is paid upfront with loans.com.au. The upfront is more expensive than other lenders, but not a huge deal, I just count it as sunken cost for an inadvertent attempt.

I had been with ANZ and westpac in the past, I didn't feel too much difference in getting loan approvals since I'm full doc.

Most online lenders adv their cost lower as they don't pay brokers and no brick mortar branch. Very few mention their credit policy is much more restrictive, which is why they are affordable to offer low rate. This is quite misleading in nature.

A lot of policy perks plus extra slow processing speed can put borrowers in a very vulnerable position. Most borrowers have a deadline to meet. This is no contractual breach, but definitely not enough duty of care.
 
Most online lenders adv their cost lower as they don't pay brokers and no brick mortar branch.

Sure, that makes sense, I mean obviously their cost of client acquisition is lower, but how much lower is their cost really.

One aspect from the no frills online lender crowd is they they dnt tell you that they CANT offer specific credit advice on structuring etc , which has as much to do with their lower rates as any other reasoning, but you wont see that in the advertising blurb.

Im fine with online lenders - they suit many peops, and will get an increase in market share over the next few years

Its that oldage isnt it - service quality and price - choose any 2

ta
rolf
 
lol, they came back to me, 75% LVI, but give me the rate for 〉80%. Although I don't think I gonna proceed, I replied with an inquiry. I kind wanna find out it is because of their incompetence or dishonesty.
 
Id have to say neither.

just is what it is

ta
rolf

Will see. They had confirmed I was qualified to the best rate they offer on the phone, but paperwork indicates otherwise. If >80% is indeed the category they put me in, I expect they'd ask for LMI, which is mentioned nowhere...
 
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