Homeloan Search and Pre-approvals

Hi guys

I've finally taken the plunge to go out and decide to buy my first IP. As this is my first investment I thought it would be important to fully understand everything before pulling the trigger on a loan and get it right the first time.

After researching and doing a lot of reading I've decided to go for the following

Loan: 400K
Term: 30 years
LVR 80% (deposit 80K)
Offset account
Interest Only
Interest: Variable
Single salary: 90K

At the moment I've engaged a mortgage broker (not listed on MFAA) and he has advised that I'm suitable for a professional package and has referred me to a few packages. Pending offers from two lenders out of the three.

While I wait I've also engaged loans.com.au and began the pre-approval process with them (have not submitted any documents to them yet).

1. Has anyone dealt with loans.com.au as their rates (interest & comparison) are the lowest when you do a look up on canster and other sites, is it a honeymoon rate? Just trying to avoid the gotchas if i go with them. Also i've noticed on www.finder.com.au the website says its not suitable for investment?

2. Will having multiple pre-approvals before property searching effect your future borrowing as the number of inquiries on your credit file increases?

At the moment i'm thinking of talking to another broker and see what other options they have.

Would be interested on hearing your thoughts.

ML
 
1. Don't do the multiple pre approvals - all you are doing is frying your credit file. Broker should set a plan based on your strategy and then should recommend what lenders to use when in your portfolio cycle

2. Consider a basic IO w/ linked offset strategy

3. Also consider what you plan to do with the property such as equity releases, upfront valuations, etc. E.g let's take ING - cheap rates but crappy cash out policy. Excellent for some and suicidal for others.

Lots to consider other than the good ole interest rate.
 
Hi ML

Welcome aboard.

Do you have an owner occupied property?

What are your longer term plans with property?

Avoid lodging multiple applications - it will make lenders nervous. Two won't do much harm - more than this starts to present issues.

Rate is very rarely the most important factor - especially when investing in property.

Cheers

Jamie
 
Def don't burn your credit file with multiple credit hits...if you plan on going with Loans.com.au than stick with that pre-approval etc...unless something major changes.
 
Hi ML, you need to take a breath and think about your situation and what you are doing. From what i gather you are waiting for pre approvals from 2 lenders through the mortgage broker and enquired through loans.com.au all at the same time? If all 3 lenders have done credit enquiries you are putting yourself at risk now and in the future. If you are chasing rate alone then just proceed with 1 application that you have in the system already.
Hi guys

I've finally taken the plunge to go out and decide to buy my first IP. As this is my first investment I thought it would be important to fully understand everything before pulling the trigger on a loan and get it right the first time.

After researching and doing a lot of reading I've decided to go for the following

Loan: 400K
Term: 30 years
LVR 80% (deposit 80K)
Offset account
Interest Only
Interest: Variable
Single salary: 90K

At the moment I've engaged a mortgage broker (not listed on MFAA) and he has advised that I'm suitable for a professional package and has referred me to a few packages. Pending offers from two lenders out of the three.

While I wait I've also engaged loans.com.au and began the pre-approval process with them (have not submitted any documents to them yet).

1. Has anyone dealt with loans.com.au as their rates (interest & comparison) are the lowest when you do a look up on canster and other sites, is it a honeymoon rate? Just trying to avoid the gotchas if i go with them. Also i've noticed on www.finder.com.au the website says its not suitable for investment?

2. Will having multiple pre-approvals before property searching effect your future borrowing as the number of inquiries on your credit file increases?

At the moment i'm thinking of talking to another broker and see what other options they have.

Would be interested on hearing your thoughts.

ML
 
just shows me once again that the NCCP sometimes doesnt cover some of the more obvious practical credit advice things that it should.

The fact that the broker isnt an MFAA mumber isnt an issue itself, many are FBAA or some other member.

The good thing is you are asking the right questions and are well on the way to having a better grasp

ta
rolf
 
Appreciate the responses and I have taken your suggestions into account.

Shahin_Afarin:

I haven't done multiple approvals yet as i'm still waiting on my broker to get back to me with the questions i've asked about. I'm assuming most lenders don't do credit checks until they have all the required documents?

ING was one of the lenders I was recommended and as you mentioned they have a crappy cash out policy which is something i would like to know about but not mentioned. Seems the pros are advertised but the cons are not being detailed as this will help you make a better informed decision.

Jamie M

Currently no owner occupied property at this point in time. I was thinking of obtaining property which I can rent out and later subdivide in the future, sell one and rent out the other. Pretty much would like to start build a portfolio and leave something for future generations.

ML
 
If this is a set and forget loan then go ING no worries but if you are a hardcore investor that needs investor friendly policy (i.e. various forms of upfront valuations, easy cash out even in LMI territory, etc) then ING is one of the worst lenders.

If you haven't signed any paperwork then a broker cannot submit an application and hence no hit on your credit file.

PS you can order your credit file for free online.
 
ING have their place...but as Shain mentioned if your an aggressive investor ( looking at buying 3-4 properties in the space of 24 month ) than you have to overlook the interest rate sometimes and work with the "features" and policy of the lenders.


P.s ING have improved their cash out policy , but yes wouldn't rate them in the top 10 for cash out. Especially if LMI is involved.
 
I'll be interested at seeing what this cash out policy is... current broker hasn't responded to my email over the last few days I'll give him a few more days before i start talking to another broker a friend has referred me to.

ML
 
ING cash out ( new

80% LVR - No limit, but all within reasons ( i done a few ranging from $40,000- $550,000)

85% - also no limit, but from exp i find they do ask for evidence when it's over $100,000 ( case by case of course depending on the strength of the deal)

>85% - Limited to 20% of the security value ( Standard LMI policy)

So ING's cash out is ok now, in line with the "standard"....
 
Appreciate the advice... I've decided to not go with the Loans.com.au pre-approval and am now on the hunt for another mortgage broker as the current one has not come back to me after a week of waiting. Hope this helps anyone else that is also in the same boat as I am.
 
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