loans.com.au vs State Custodians

I have 2 IP loans.
One with State Custodians and the other with loans.com.au.

PS. The following is just from my experience dealing with them.
Your experience might be different.

PPS. ****Mac are behind them, that is where the similarity ends :D
ResiMac is behind State Custodians
FirstMac is behind loans.com.au

PPPS. I am not a mortgage broker, so whether they pay commission or not will not introduce bitterness into my view point :p

===State Custodians===
Pros:
1. great/responsive/useful customer support, either email or phone, but I prefer phones
2. true offset account
3. cheque facilities for writing 10% deposit cheques
4. can have splits
- I have main loan portion, LOC portion and offset portion (offset against main loan portion)
5. give you membership for clublifestyle
- 5% off giftcards, cheapest movies tickets compared to other similar membership
6. it is in refundsdirect.com.au's list, so I got back $$$$ from this mortgage referrer :D

Cons:
1. no bank cheque
- I need to transfer funds to my own bank account and then get bank cheques
- I open a new bank account just for this purpose so there is no mix with my private funds

===loans.com.au===
Pros:
1. great rate
2. true offset account
3. can provide bank cheque for settlement

Cons:
1. sometimes they contradict with what they just said
eg. they refused to lend me X amount of money and when they found out that I have loans with State Custodians, they asked if I want to move the loan to them
2. they do not believe that my loan is for investment property only and they will only release fund to my solicitor for my next IP
That is, I am not able to use the fund to build my granny flat for my existing IP :(
 
htopg said:
2. they do not believe that my loan is for investment property only and they will only release fund to my solicitor for my next IP
That is, I am not able to use the fund to build my granny flat for my existing IP :(
Click to expand...

That's your typical (lack of) cash out policy. What a pain.
 
Aaron_C said:
That's your typical (lack of) cash out policy. What a pain.
Click to expand...

And this is why it is such a costly choice.
If you manage to save .5% on a $1mil facility you save $5,000/pa. However if you can access the equity, or borrow more, your opportunity cost is much more than that.

Borrowing to build a GF which will presumably add more value than it cost, plus increase the returns on the property.

These cheapies are a "lender of last resort" for a reason.
 
Blacky said:
Borrowing to build a GF which will presumably add more value than it cost, plus increase the returns on the property.
Click to expand...
I agree on "the increase on the returns" part.
However, have you actually got a GF that adds more value than it costs?
I thought that a GF normally only adds 80% of GF value to your property?
And we sacrifice the 20% for the rental yield?
 
Aaron_C said:
That's your typical (lack of) cash out policy. What a pain.
Click to expand...

To clarify, when I was looking into GF's about two years ago, I was told by my broker that they didn't know of a lender who will lend for a GF build. I'd basically have to pay cash and do a re-val at the end (which is why I didn't go ahead, I don't have 70-80k spare equity lying around!).

The fact that these guys don't do it makes them no better/worse than a Big 4.

Please correct me if I'm wrong and it's normal for lenders to lend for GFs these days.
 
DavidMc said:
To clarify, when I was looking into GF's about two years ago, I was told by my broker that they didn't know of a lender who will lend for a GF build.
Click to expand...

Without going to my database, we have done granny builds with CBA, AMP, WBC NAB, STG ..........ABL via Mortgage Managers

ANZ will too, but at lower LVRs

Over the last 12mths or so.

2 years ago may have been a little different

ta
rolf
 
htopg said:
===loans.com.au===
Pros:
1. great rate
2. true offset account
3. can provide bank cheque for settlement

Cons:
1. sometimes they contradict with what they just said
eg. they refused to lend me X amount of money and when they found out that I have loans with State Custodians, they asked if I want to move the loan to them
2. they do not believe that my loan is for investment property only and they will only release fund to my solicitor for my next IP
That is, I am not able to use the fund to build my granny flat for my existing IP :(
Click to expand...

more Cons:
They will ask you for more and more documentation and find excuses to lend you less.
For example, I could have borrowed 380k against my IP, but at the end, they only want to release $230k. :mad:
Plus that this $230k cannot be used freely (like constructing a GF) and they will only release the fund after they see my contract of sales for next IP. :mad:

The end result? you cannot maximise your property portfolio.
* Brokers will be glad to hear this :)
 
htopg said:
more Cons:
They will ask you for more and more documentation and find excuses to lend you less.
For example, I could have borrowed 380k against my IP, but at the end, they only want to release $230k. :mad:
Plus that this $230k cannot be used freely (like constructing a GF) and they will only release the fund after they see my contract of sales for next IP. :mad:

The end result? you cannot maximise your property portfolio.
* Brokers will be glad to hear this :)
Click to expand...

no frills lenders have their uses

You are trying to make a BMW out of a Chery ............. and therein lies the "dissapointment"


ta
rolf
 
htopg said:
more Cons:
They will ask you for more and more documentation and find excuses to lend you less.
For example, I could have borrowed 380k against my IP, but at the end, they only want to release $230k. :mad:
Plus that this $230k cannot be used freely (like constructing a GF) and they will only release the fund after they see my contract of sales for next IP. :mad:

The end result? you cannot maximise your property portfolio.
* Brokers will be glad to hear this :)
Click to expand...

Yeah, if that's the case, I'd forget these mobs as investors.

Being able to have decent valuations done and draw down loans regularly (without any strings attached) is crucial to my strategy.
 
htopg said:
more Cons:
They will ask you for more and more documentation and find excuses to lend you less.
For example, I could have borrowed 380k against my IP, but at the end, they only want to release $230k. :mad:
Plus that this $230k cannot be used freely (like constructing a GF) and they will only release the fund after they see my contract of sales for next IP. :mad:

The end result? you cannot maximise your property portfolio.
* Brokers will be glad to hear this :)
Click to expand...

Unfortuantely this situation isn't unique to online lenders. Quite a few mainstream lenders have similar restrictions, especially if there's LMI involved. I've never had a situation where I couldn't get around the problem, but it's still a pain in the neck.
 
PT_Bear said:
Unfortuantely this situation isn't unique to online lenders. Quite a few mainstream lenders have similar restrictions, especially if there's LMI involved. I've never had a situation where I couldn't get around the problem, but it's still a pain in the neck.
Click to expand...

It's called 'responsible lending' ;)
 
I agree Aaron. The lender wants to be in control of the funds, they don't want to get into trouble if you take the cash, blow it at the casino and then cry poor. Very responsible way to buy an investment property.

Of course, if you want $50k for a wedding which probably won't last 5 years, that's no problem.
 
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