Refinancing - Need advice

[BrendanF]

Hi All

We are looking to refinance to borrow 20-30k more and find a better interest rate.
We purchased the Unit 3 years ago going with CBA on the wealth package with a current interest rate of 5.15%. We paid 380k for it with a 30k savings so had to use LMI and currently owe 330. Since then we have spent approx 20k on repainting, new carpets, patio/outdoor entertaining area and ducted Evap AC.

I have enquired at a number of banks to what they have to offer and the first thing they say is what is the place worth. Obviously the place we go with is going to do there own evaluation but is there anyway we can get some kind of indication of what the place is worth so see if we have enough equity to borrow the extra and not pay LMI?

So far i have looked at the following products
Bankwest Online homeloan 4.88% 0$ application and annual fees.

The CUA fresh start variable was recommended in a number of posts on this forum with a interest rate of 4.65%. It also appears to have a $0 application and annual fee.

loans.com.au with a interest rate of 4.54% and $520 application fee

Is there any others that we should be looking at? Once i have done my research i plan to go in to CBA to see what they will do to keep us.

Any info would be greatly appreciated.

Regards,
Brendan

 

[Marty McDonald]

Hi Brendan,

Firstly I / all the brokers and Brady can do a CBA auto valuation as well as other reports for you.

I would also suggest that you consider staying with CBA if you plan on doing further purchases in the medium term. If you change lenders you will lose the lmi credit you already have with CBA.

This means that in the future if you want to tap equity to 90% to fund the deposit on a new purchase for example And you had changed lenders you would be up for full LMI again. If with CBA then lmi would only be payable on the increase.

Finally CBA are negotiating pretty hard at the moment and if there are new borrowings your bargaining power is increased. All the brokers here can apply for pricing for you. I'm in their diamond broker program which I think (not 100% sure) gives a slightly better rate to my pricing requests. I've been told this by another diamond broker but I'm not sure of that is correct or not. Anyway happy to try for you.

 

[Jamie M]

Great post by Marty.

By focusing on getting the lowest rate - you're overlooking much larger costs with potentially go into the thousands.

I'd be inclined to stick with CBA too - and request a pricing discount on your current loan.

If you need a good broker - Marty has done a great job providing an in depth response.

Cheers

Jamie

 

[Rolf Latham]

Hi and Welcome to the forum

What are your longer term financial goals ?

whatis the use of the 20 to 30 k for ?

The reason I ask that is that if u bundle the 30 with the rest of te housing loan, and the 30 k is say for a car, if and when you convert the place into an IP, then you will have a mixed purpose loan. Not unmanageable if Interest only, but painful and long term expensive if P&I.

Id suggest a separate split unless the 30 k is to be fully spent on the property


Many brokers can do an upfront val, however I would really encourage you to have a look at the advise provided by Marty with regards to burning your LMI premium.

ta
rolf

 

[Mick C]

^ Agree with the above...doesn't hurt to carry out an upfront valuation FIRST so you know what LVR your playing with....than you can decide on the rate and next best move...all the above "cheap" product you mention only works if it's an 80% LVR in total.

Based on the rough numbers you have given and without carrying an upfront val yet...i would also say consider staying with CBA and use the LMI credit to your advantage....unless your property is valued under the 80% LVR>

 

[Oshawott]

just curious are the upfront valuations using rpdate/pricefinder?

if in the off chance the figures are favorable, can you use it to ask bank for equity release or will they order an onsite full valuation if the numbers look high.

also, is it true that to ask for better rates, you have to resubmit all financials again (like applying for loan all over again)? or it it just a matter of broker calling them and asking them to give better rate.

thanks very much.

 

[Terry_w]

just curious are the upfront valuations using rpdate/pricefinder?

if in the off chance the figures are favorable, can you use it to ask bank for equity release or will they order an onsite full valuation if the numbers look high.

also, is it true that to ask for better rates, you have to resubmit all financials again (like applying for loan all over again)? or it it just a matter of broker calling them and asking them to give better rate.

thanks very much.

An upfront valuation is a valuation done by a valuer on the bank's panel. If ordered via the bank's system there is no need for the bank to do another valuation.

No need to submit financials for a special discount.

 

[Jamie M]

just curious are the upfront valuations using rpdate/pricefinder?

CBA will either go off a desktop valuation (usually up to 80% LVR depending on the property) and generally (not always) a full inspection for above 80%

If you only need an 80% LVR than I'd usually look at the desktop result first - and if it doesn't stack up, order a full val.

Cheers

Jamie

 

[Oshawott]

i got access to pricefinder and its showing same valuation as an appraisal done by an agent few weeks ago.

had a valuation done December last year came back 530k (although my own cma suggests 570-590k) question is how long in between is recommended interval before trying to valuation and releasing equity? how much do upfronts costs.

right now im estimating using recent sales that the site is in the 620-650k range, and pricefinder/agent both say 670k.

 

[Jamie M]

Vals generally last anywhere between 3 to 6 months.

An upfront with CBA will cost your broker $49 if you don't proceed with an application.

Cheers

Jamie

 

[BrendanF]

Thanks for all the Advice!

The money will be used to purchase a caravan. I have 30 weeks leave next year and we are looking to rent the house out and travel with my wife and 2 kids. The caravan will then be sold when we get back and money put back into the mortgage.

Our long term plans are to eventually turn our current property into a investment and upgrade to something bigger.

Im not real keen to borrow more than 80% for the caravan but could use it in the future when we turn it into a rental.

 

[Rolf Latham]

Thanks for all the Advice!

The money will be used to purchase a caravan. I have 30 weeks leave next year and we are looking to rent the house out and travel with my wife and 2 kids. The caravan will then be sold when we get back and money put back into the mortgage.

enjoy !!

Many peops never make this opportunity

Separate loan split pls btw

ta
rolf

 

[albanga]

I know it will vary per lender and obviously many scenarios but out of curiosity are there some broker rules around negotiating a better rate?

Say for example above 80% and below 300k = Don't bother
Under 80% and below 300k = small deduction
Just above 80% on a 800k loan = small deduction
Under 80% on a 800k loan = big deduction

 

[Jamie M]

I request pricing on pretty much everything - especially with the majors.

Some will price on LVR - some don't.

All will price on loan size and/or aggregate borrowings.

You just get a feel for what's available at the time.

Cheers

Jamie

 

[albanga]

Thanks Jamie.
Guessing most lenders sigh when they see your number come up. Haha

 

[Terry_w]

Thanks Jamie.
Guessing most lenders sigh when they see your number come up. Haha

Rate requests are usually via a written submission. Major lenders usually get hundreds of applications for loans per day and they don't remember our numbers unfortunately.

 

[Jamie M]

Thanks Jamie.
Guessing most lenders sigh when they see your number come up. Haha

Some BDMs might

But at the same time I'm sure they're also thankful for the business.

Cheers

Jamie

 

[BrendanF]

Well i was going past a CBA branch and thought i'd drop in to see if they could give me the value of our property. Was told that they didn't have any brokers available but someone would see what they could do. The branch manager then came in and said here are the forms to increase your mortgage...fill them out and i can lodge the application to see what the property is worth.

I walked out not too happy as all i wanted to know was what was involved in getting an evaluation done on our property. Apparently they will only do it once the increase is submitted. Am i being pushed into a corner? I dont want to submit an application until i know we can borrow the extra without going above 80% and also renegotiate our interest rate. Is this possible?

Regards,
Brendan

 

[Jamie M]

I walked out not too happy as all i wanted to know was what was involved in getting an evaluation done on our property. Apparently they will only do it once the increase is submitted. Am i being pushed into a corner?

Do yourself a favour and give Marty a call - he deals with this stuff daily and I'm sure he'll be happy to order an upfront val and sort this out for you.

Cheers

Jamie

 

[Corey Batt]

Well i was going past a CBA branch and thought i'd drop in to see if they could give me the value of our property. Was told that they didn't have any brokers available but someone would see what they could do. The branch manager then came in and said here are the forms to increase your mortgage...fill them out and i can lodge the application to see what the property is worth.

I walked out not too happy as all i wanted to know was what was involved in getting an evaluation done on our property. Apparently they will only do it once the increase is submitted. Am i being pushed into a corner? I dont want to submit an application until i know we can borrow the extra without going above 80% and also renegotiate our interest rate. Is this possible?

Regards,
Brendan

The branch manager either didn't have a clue, or was being a cheeky bugger. You can certainly get an upfront valuation without an application. Have a chat with a broker who can get this organised for you, alongside renegotiating your rates etc.