Generous Lenders?

[Noodle]

Trying to learn as much as possible about the best way to structure my finances as a property investor and I have read a couple of times on this and other sites that its usually best to borrow from the most generous lenders last to maximise borrowing capacity.

Firstly is this right? If this is the case then how as a consumer are we supposed to know who are the most generous lenders? Seems most brokers have different preferences when it comes to lenders so not really sure how to get an unbiased view.

I have all my loans so far with CBA so far and have no idea where they stack up on the generous lender ladder.

Lots of great brokers on here so would love your input

 

[Kristine..]

G'Day Noodle

CBA are not one of the generous lenders but they are good for various other things - postcodes, employment history etc although not necessarily for product features - the MISA offset account is like driving a car with rack and pinion steering

Do brokers have lender preferences? I can't comment - as a broker, I don't - it all depends on what the borrower wants, is buying, can afford, whether it is their first loan (with all the consumer bells and whistles) or their 19th loan (just show me the money!)

Some borrowers are very rate orientated, other borrowers couldn't care less about branding or their background or circumstance means that they will be grateful for any offers of loans. Other borrowers have very ordinary circumstances indeed but won't buy / won't borrow if they aren't getting the royal treatment - there can be no 'broker preferences' or otherwise the broker would never write any business!

As soon as you get off the beaten track - eg get a few investment properties - it is almost impossible to use the standard on-line calculators, so in order to work your way up the borrowing ladder you may need to have the conversation with an investment conscious broker

Hope this helps
Kristine

 

[Rolf Latham]

Trying to learn as much as possible about the best way to structure my finances as a property investor and I have read a couple of times on this and other sites that its usually best to borrow from the most generous lenders last to maximise borrowing capacity.

Firstly is this right? If this is the case then how as a consumer are we supposed to know who are the most generous lenders? Seems most brokers have different preferences when it comes to lenders so not really sure how to get an unbiased view.

I have all my loans so far with CBA so far and have no idea where they stack up on the generous lender ladder.

Lots of great brokers on here so would love your input

I think the answer is to find a broker that can explain a structured lending approach to you.

There is lots and lots of lending information on forums and the net generally. There is also information on how to remove your own kidney.........but that doesnt mean its smart to do it.

If you want an "unbiased" view, pay someone qualified to do a mortgage/ financing plan for you.

Depending on complexity $ 500 to $ 3000 should about cover it.

You can then take that data and do your own implementation around it.

One reason not many borrowers like such an approach is that you will need to pay a "maintenance agreement" fee for the data to be updated on a regular basis for it to be relatively up to date, in regard to lender changes and changes in your circumstances.

In the end, there is no free lunch if you want to maximise your resources.

You either pay by releasing a little control, and learn to trust, little by little, or ya pays your money.


ta

rolf

 

[Peter_Tersteeg]

I'll be upfront about it. As a broker I am bias towards some lenders and away from others and I think brokers need to have some bias to do their job well.

Lenders do need some pre-qualification before a borrower or a broker should be willing to do business with them. They should have a track record of being reaonsable to deal with and of being compeditive.

I can think of one lender that over the last 5 years has changed their product mixture several times. Each time their product suite changes, people on the older products find their rates going up, whilst new borrowers are being pulled in by lower, more compeditive rates.

Some lenders constantly have 'special products' which look good at first but turn bad after a few years. It's essentially a bait-and-switch approach to dealing with customers.

Other lenders change their approach to the broker channel as it suits them. One day they'll deal with you, the next day they won't. The problem for the client is that they may no longer have an advocate working for them if they have issues with that lender down the track.

One of the big four banks has consistantly been the most expensive for over 3 years now. Fair to say that they're not top of my mind when making recomendations.

The GFC should have taught us to stay clear of lenders that aren't profitable. They tend to get very expensive very quickly.

I'm not saying that I won't deal these lenders at all, most lenders do have a niche where they might be a better fit than others. I will be clear with the client why I don't like these lenders, and I will explain why I make the recomendation dispite this, so the client is better informed.


On generosity of lenders, there are trends amoungst lenders, but the ranking does change depending on the circumstances. Single home owners service well with some lenders. Multiple property investors will find other lenders are more generous.

On the whole I'd say CBA is about mid-range and in many (but not all) cases they're the lowest of the big 4 banks. Westpac and NAB are consistantly more generous, at the moment ANZ might be a little more generous but not always. Each lender has its policy quirks which means it doesn't matter how generous they are, they just might not be the right fit for you.


You also don't necessarily want to put all your property with the bank that's most generous. As an example, AMP will use the actual loan repayments for loans with other institutions, but they'll load the assessment rate for loans held by AMP. This means they're more generous for borrowers who have diversified their lending as opposed to those who have all their loans with one lender.

 

[Noodle]

Thanks all, some really interesting and diverse answers and I really appreciate the honesty. Clearly not as straight forward as I had first thought.

 

[Perth Investor]

You also don't necessarily want to put all your property with the bank that's most generous. As an example, AMP will use the actual loan repayments for loans with other institutions, but they'll load the assessment rate for loans held by AMP. This means they're more generous for borrowers who have diversified their lending as opposed to those who have all their loans with one lender.

And they will take 100% of rent, and they will disregard credit card debt... They're quite the generous lender for the right client.

 

[Rolf Latham]

And they will take 100% of rent, and they will disregard credit card debt... They're quite the generous lender for the right client.

Just right now allow 3 weeks for a file to be looked at

Ta
Rolf

 

[Jamie M]

Yep, it's pretty crazy. Looks like they got hit quite hard with a lot of last minute fixed rate apps last week.

The 100% rent they take into account is only applicable to sub 80% lends.

Cheers

Jamie