small lenders ?

[eyespy]

hi there,

i'm using mortgage house broker to get me a loan. They are offering an inhouse packaged loan(which they get the funds from adelaide and bendigo bank)

i've never used a small lender before and just wanted to know whether there is anythign i need to be wary of. main worry in terms of them increasing rates wildly fom bigger banks

thanks

 

[Ausprop]

main worry in terms of them increasing rates wildly fom bigger banks

there's the kicker. it may not even be the current bank - they can sell the loan book to some shonks who then decide to put your interest rate up by 3% and there is nothing you can do other than leave. If you look at the small lenders like macquarie, RAMS (version 1.0 ?), ING/Mortgage Ezy, Pepper etc it is not a good track record for small lenders

 

[Ausprop]

forgot to mention - run a mile from the small lenders

 

[Aaron_C]

That did happen last time with the small lenders putting up rates. But who knows how things will pan out in a few years' time - the big banks have their own problems as well. Just make sure you have an exit strategy to refinance if that occurs.

 

[devank]

No one I know has loans with small lenders. Even brokers don't really look at them or recommand them. How do they really stay in the business?

 

[Aaron_C]

No one I know has loans with small lenders. Even brokers don't really look at them or recommand them. How do they really stay in the business?

They have their place. Mostly in the non-conforming space but also for other reasons like cash-out policy, LVRs and/or lo-doc options.

 

[Rolf Latham]

hi there,

i'm using mortgage house broker to get me a loan.

Broker, or mono product sales person

Big difference I feel ?

There may be a GOOD reason why they have suggested the product though, and without knowing the full details it would be unkind to comment further.

ta
rolf

 

[eyespy]

i contacted this broker as he is my dad's friend.....i presumed he was a general broker, but the mortgage house website looks like it only has their own products

 

[alexlee]

i contacted this broker as he is my dad's friend.....i presumed he was a general broker, but the mortgage house website looks like it only has their own products

Well, you have to ask. Do you want to use a broker who only sells his own products?

 

[Terry_w]

Mortgage Manager maybe.

Trouble can arise if you cannot deal directly with Adelaide Bank or Bendigo bank but must go through the mortgage manager for all queries.

I had a conveyancing client who had their loan through a mortgage manager. They sold their property and I had to arrange the discharge of mortgage and pay out the loan. It was a nightmare trying to contact people and get things done because the mortgage manager just wouldn't answer their phone and Adelaide Bank refused to deal with the problem.

 

[Mick C]

No one I know has loans with small lenders. Even brokers don't really look at them or recommand them. How do they really stay in the business?

I use/recommend and deal with small lenders every day. ...they def have a place...even for everyday mum and dad loans.

We currently write around 70% with the major banks and tier 2 banks and 30% with the smaller lenders/ mortgage managers

Smaller lenders are not for everyone but some examples of why we may recommend them are- but not limited too:

- High LVR
- Low rate with no offset ( basic home loan)
- Unique security- BLock of units, Student accommodation, Studio, Units under 30squ meters
- LMI pricing
- Long I/O term
- 40 years serviceability term
- Special features
- Cash out
- Bridging loans > 6 month
- High credit inquiries
- Default/ Non-conforming
- Loc doc

End of the day it depends on the deal...and finding a suitable match for the client's short and long term needs.

Regards
Michael

 

[Mamaof3]

I think Mike C has summarised the benefits beautifully.

They definitely have their place and could be extremely useful to some. I know we've used some before and we've never had any problems.