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From: Mike .


Westpac Loan Interview
From: BGR
Date: 06 Nov 2000
Time: 20:14:59

Hi All,

I had an interesting loan application interview with Westpac today seeking finance for a second IP. I was surprised to say the least when I learnt they do not take into account any neg. gearing tax benefits as they cannot guarantee the Gov't won't change the rules! I was also told they will only take 70% of rental income into account.

90% I could understand, but 70%??? This apparently is because they do not want a high dependancy on rental income. I had calculated I would be up for about 15% tax for the year on a salary of around 63K and with an existing property only costing me about $5 per week on the PIA. The suggested property was only $80k with a rent of $125. All this counted for nothing though. Is this normal philosophy, or did I get a dud interviewer?

BGR
 
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Peter T

Reply: 1
From: Mike .


Re: Westpac Loan Interview
From: Peter T
Date: 11 Nov 2000
Time: 02:27:56

Just replying to BGR's comments. I had a chat to a loans manager at ST George bank about 6 to 12 months ago and tax benefits are definately considered (221D) in assessing cashflow servicability for their IP loan applications. Hope this helps, Peter T.
 
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DR

Reply: 1.1
From: Mike .


Re: Westpac Loan Interview
From: DR
Date: 07 Nov 2000
Time: 20:56:16

Try the NAB. You may even qualify for their professional package. If your salary is over a certain amount and your total borrowing exceed a certain amount then you qualify. These limits are flexible.

You may have to refince your existing IP with them to get the deal.

Cheers
 
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Andrew

Reply: 1.1.1
From: Mike .


Re: Westpac Loan Interview
From: Andrew ( A soon to be former Bank Insider)
Date: 07 Nov 2000
Time: 11:04:11

Questions you should always ask the loan interviewer are:

1. Do you have any investment property yourself? (For most Bank Johnnies it will be NO!!)
2. What % of the rental figure do you allow? (Westpac policy is actually 80% I believe)
3. How does the Bank factor in the ability to use a 221D Income Tax variation to improve my serviceability? (you will get a vacant stare!)
4. What is the maximum I can keep this investment Loan Interest Only? (I bet they say 3 or 5 years, when you can review it in 3 or 5 years for an extension)
5. Can you shade the Fixed Interest Rate to meet your competitors offer? ( Oh ....I'll have to refer that to our Head Office/Mortgage Area.... no sorry we cant match that rate.)
6. Do you have any Loan packages for people on incomes greater than $50,000 or are professionals? (remember these Bank Johnnies are on $30K+ and not degree qualified)


Remember that all personal property related loans at Westpac/Bank of Melbourne/Challenge are credit scored via the computer. The interviewer is generally only there to ensure that the information on your form is verified by supporting data and inputed correctly.

My advice is to use Mortgage Brokers where possible or ask for the Westpac Area Manager ( the loan interviewers Boss) to get a better hearing. The Westpac Bank has slowly "dumbed down" the role of the Loan Manager in the branches as one former Westpac executive said "Yes we centralised the loan approval to enable female Branch managers to use their "better people skills" to run the Branch The Westpac Bank is a "Can't Do" organisation where if your loan doesn't fit inside the "black box" the low skill level of the staff will actually not assist you in getting an approval.

Did they manage to refer you to the Branch's Financial Advisor though???? They might be able to sell you some Insurance or into a Bank Managed Share Fund.

The other suggestions about Attitude and professional appearance are all correct. If you do get a good Loan interviewer stay with them!!!

I have 2 names for anyone in Melbourne that bank Bank of Melbourne and want a good hearing. Email me on [email protected]

Best of Luck
 
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Gee Cee

Reply: 1.1.1.1
From: Mike .


Re: Westpac Loan Interview
From: Gee Cee
Date: 07 Nov 2000
Time: 19:24:59

Have to agree completely.

WESTPAC are so smart at saving a few $ that they must be losing millions of $ of business from present clients. Yet they send you out all these fancy colour pamphlets telling how much of a wonderful valued client you are.

Quite obviously Marketing never speaks to anyone at the loan area and visa versa.

My advice - TRY ELSEWHERE
 
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Michael Gruber

Reply: 1.1.1.1.1
From: Mike .


Re: Westpac Loan Interview
From: Michael Gruber
Date: 07 Nov 2000
Time: 03:27:21

Hi,

I'm about to have my two IPs refinanced and go for more, so what I'm about to tell you is theory which I intend to apply (but not yet proven).

1) Presentation - you are an investor, a professional one at that, ensure you look the part.

2) Understand your position - you are not ASKING them for a loan. You are OFFERING them an opportunity to lend you money. So use words and thoughts that enforce that perception

3) Make them understand the deal - property is a big investment both for the bank and yourself. You've spent months of research looking for the right property. Show the bank this research. Put together a proposal which you have to wheel in. In the application show;

- your personal finance position (assets/liabilities/income/expenses) - show them your budget (I just did mine), highlight needs/luxuries, show what you can cut back on if need be. - show them the property deal - show them the research and explain why you selected this particular property - do projections with PIA and print it all out - explain how this will not be the only property and that you can provide more business to them

And finally, only talk to someone who can understand what you are showing them. Front line staff will only follow procedures, talk to lenders with authority to approve loans (ie $1mil+ allowance) and who are investors themselves.

Hope it helps Michael
 
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Pierre

Reply: 1.1.1.1.1.1
From: Mike .


Re: Westpac Loan Interview
From: Pierre
Date: 07 Nov 2000
Time: 08:22:53

What Michael said! ... and to expand a bit:

I just financed a property through the NAB. This is how my meeting with the bank went...

Before I arrived, I filled in first section of the loan application (personal details). I crossed out the rest of the form (assets, liabilities, income, expenses, loan amount required, security details etc). I signed the form. To the (virtually blank) form, I attached my personal financial statement - all the stuff they wanted to know that I crossed out on the form. The statement however was very detailed. I included all the rental income, told them exactly how much tax I was going to pay, and gave them a print out of my last 2 years expenditure and income from a MS Money report.

When the meeting started, I grabbed a whiteboard and marker, sat the banker down and mapped out the plan - explaining how I wanted my current finances restructured, how I wanted the new lending to be structured, and what securities they could have.

My banker was very happy and agreed to the plan. I asked her to input the numbers into their system as I had explained them to her and left pretty confident.

I received my approval the next day.

Plan what you want, pitch the idea - tell the bank what they will do for you. So long as you are not wholly unreasonable, you'll be surprised how well it works.

Pierre
 
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Narayan

Reply: 1.1.1.1.1.1.1
From: Mike .


Re: Westpac Loan Interview
From: Narayan
Date: 07 Nov 2000
Time: 07:26:30

I agree with this approach. Everything depends on presentation. If there is a strong conviction it strengthens the presentation. Respect the front line but be prepared to take the matter up as well. One can get what one wants to achieve. At the end of day, whatever name is given to a loan it's still a loan and boils down to one's comfort level. Sorry if it looked like a sermon on the mount. Narayan
 
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