what's the general story with lo doc variable rates?
- Thread starter GoAnna!
- Start date
In general (depending on the lender) Banks will do their low doc loan at the same rate as the full doc loan only charging LMI over 60%.
Most Non Bank lenders have a different rate for low doc loans which for them are getting a lot more expensive as the funders are very tight due to liquidity crisis.
ANZ & CBA both charge the dow doc loans @ the same rate as a full doc where as St George have a different rate for low doc.
Personally I think it should be the same as in Australia the greatest % of defaulters according to Genworth have come from full doc lending and as their LVR is usually higher than 90% it doesn't leave room to move for the foreclosure.
Yup, but unfortunately CBA are not going to be offering wealth package discount to new low docs.
We are with the CBA and our PPOR lo-doc loan reduced by .8% on the 13th of this month
(now at 8.58%)
Cheers
Sue
Sue that CBA rate still seems high. Have you not borrowed enough ?
Sounds like it's just the standard variable rate (although that's 8.53 not 8) without any wealth pack discount. Depending on the loan amount the discount kicks in at certain levels of total outstanding debt. Although this won't apply to new low docs from now on.
I wanna discount We have a 188,000 Line of Credit Loan currently with 154,863.28 (today) owing? Should I be asking for a discount? We have had this loan for just over 2 years now.
Sue
We have a 188,000 Line of Credit Loan currently with 154,863.28 (today) owing? Should I be asking for a discount? We have had this loan for just over 2 years now.
Sue
Sue, assuming it's not low doc?
You can't go in and just ask for discount as they'll obviously just laugh at you, especially in the current climate. You could however weigh up the option of going onto Wealth Package:
Annual fee: $350
Features:
- No monthly fee (save $144)
- Discount on rate of 0.4% (about $600)
- Nil annual fee gold credit card.
- Potential discount if you have other products with them.
Do the figures and see if it's a good option for you. If it is, pretty easy to set up.
Thanks Steve
Yes it is Lo-doc.
I will look into changing to Wealth Pack.
I will look into changing a few things when I find the elusive IP
I am ready...(financially) just can't find the right one
Reapeat 3 times
Sue
OK, if it's low doc you may have missed the boat. Details are still a bit vague (I'm waiting to find out myself) but CBA issued a directive this week that Wealth Package is no longer available to new low doc clients with >60% LVR.
What classifies as 'new' I'm still trying to find out.
Spewing.....!!!
Half our debt was with Permanent Custodians...which was taken over by GE Money......I hated that thought but out of our hands.....now I hear they are not reducing rates by any percentage at all......after hiking rates more than the rest earlier this year and now this....Unbelievable...!
Time to call in the ACA folks.....
Half our debt was with Permanent Custodians...which was taken over by GE Money......I hated that thought but out of our hands.....now I hear they are not reducing rates by any percentage at all......after hiking rates more than the rest earlier this year and now this....Unbelievable...!
Time to call in the ACA folks.....
Actually for low doc...
For well into a few months, ANZ dont discount new low doc at all any more so you're on the carded/advertised rate. So hope you're not telling clients that...
We also just did a loan for 279k thru westpac - so just over the 250 amount and they would only go .6 versus the normal .7 when you'd hit that threshold.
The NAB - in their latest roundtable they said that lenders were going to start to charge for risk. And low doc does have a higher proportion of risk and defaults.
With the NAB - IMO, its pie in the sky until monday. They're making a few extra mil by not passing along the discounts earlier, or since the banks now hold the same rating as the govt their funding should now be cheaper, so you never know... they might pass along the full 1%.
And I might get my commissions increased as well
Yes, we have had a few lo-docs from CBA (not through a broker) and after 12 months our lending guy 'un-lo-docs' them or something so they are no longer considered to be lo-doc and are treated the same way as full doc in Wealth Package.
Not an option for me unfortunately.
Welcome to the credit crisis!
Credit will now have IR based on risks.....based on my discussions with people in banks I think we can expect the following as a rule of thumb the following margins will probably apply in future on top of the RBA rate (currently 6%):
1. Home loan rate margin - 1.6% - 2.5%
2. Low-Doc Loans - 2.0% - 3.5%
3. Commercial Rates - 3.0% - 4.5%
In talking to someone at a major bank they are now also starting to rate customers in terms of their credit worthiness, potential business, and assets. They are able to get this data on customers via recent integration of some of their systems. This means if you have a good credit record and have potential as a customer they wil be able to offer a lot more. I also understand that more of the Big 4 will self-insure for LMI and will be able to offer premiums much less than the current incumbents do.
Can't wait for this to happen!
Cheers
Sash
Credit will now have IR based on risks.....based on my discussions with people in banks I think we can expect the following as a rule of thumb the following margins will probably apply in future on top of the RBA rate (currently 6%):
1. Home loan rate margin - 1.6% - 2.5%
2. Low-Doc Loans - 2.0% - 3.5%
3. Commercial Rates - 3.0% - 4.5%
In talking to someone at a major bank they are now also starting to rate customers in terms of their credit worthiness, potential business, and assets. They are able to get this data on customers via recent integration of some of their systems. This means if you have a good credit record and have potential as a customer they wil be able to offer a lot more. I also understand that more of the Big 4 will self-insure for LMI and will be able to offer premiums much less than the current incumbents do.
Can't wait for this to happen!
Cheers
Sash
Welcome to the credit crisis!
Credit will now have IR based on risks.....based on my discussions with people in banks I think we can expect the following as a rule of thumb the following margins will probably apply in future on top of the RBA rate (currently 6%):
1. Home loan rate margin - 1.6% - 2.5%
2. Low-Doc Loans - 2.0% - 3.5%
3. Commercial Rates - 3.0% - 4.5%
In talking to someone at a major bank they are now also starting to rate customers in terms of their credit worthiness, potential business, and assets. They are able to get this data on customers via recent integration of some of their systems. This means if you have a good credit record and have potential as a customer they wil be able to offer a lot more. I also understand that more of the Big 4 will self-insure for LMI and will be able to offer premiums much less than the current incumbents do.
Can't wait for this to happen!
Cheers
Sash
In many ways that sounds more like the US way.
Hiya
because we have generally only got pooled data for credit scoring at this point, evaluating risk properly on an individual basis will still not be easy.
My book has a wide range of risk profiles in terms of product, and to a lesser extent borrowers.
Interesting then that the delinquency on those where I can find out is effectively zero.......................how can you price risk that you cant in reality separate
ta
rolf
because we have generally only got pooled data for credit scoring at this point, evaluating risk properly on an individual basis will still not be easy.
My book has a wide range of risk profiles in terms of product, and to a lesser extent borrowers.
Interesting then that the delinquency on those where I can find out is effectively zero.......................how can you price risk that you cant in reality separate
ta
rolf
Yes CBA is starting to do this, although probably still shuffle of us low docers to Genworth.
