Which Loan?

[tomred]

Hi,

Has anyone bad experience with Homeside?

I am about to apply for pre-approval for my first IP and have narrowed it down to 2 lenders. I am looking to borrow $400k interest only offset a/c with max 90% LVR (hopefully 85%)

I have spoken to 2 brokers

Broker 1:
St George Advantage Package @ 6.73%, $395 annual fee

Broker 2:
Homeside @ 6.57%, $120 annual fee

Broker 1 has told me to stay clear of Homeside, that they are a nightmare to deal with, slow with applications and generally difficult. I have heard this from others also.

Broker 2 insists that she has a good relationship with Homside blah blah and all will be fine.

I have worked out that going with Homeside will save me approx $1k per annum + $1k in LMI so over 5 years would work out approx $6k cheaper.

so is there any reason why I should not go with Homeside? Are they as difficult as I have heard and would i be better off paying the extra $$ for better service?

all and any advice is welcome

Thanks,
Ryan.

 

[jrc]

My broker went Homeside last year. After being told my loan was approved subject to valuation, more and more paperwork was needed. I went elsewhere both with broker and lender

 

[Bigtone]

Hi,

Has anyone bad experience with Homeside?

I am about to apply for pre-approval for my first IP and have narrowed it down to 2 lenders. I am looking to borrow $400k interest only offset a/c with max 90% LVR (hopefully 85%)

I have spoken to 2 brokers

Broker 1:
St George Advantage Package @ 6.73%, $395 annual fee

Broker 2:
Homeside @ 6.57%, $120 annual fee

Broker 1 has told me to stay clear of Homeside, that they are a nightmare to deal with, slow with applications and generally difficult. I have heard this from others also.

Broker 2 insists that she has a good relationship with Homside blah blah and all will be fine.

I have worked out that going with Homeside will save me approx $1k per annum + $1k in LMI so over 5 years would work out approx $6k cheaper.

so is there any reason why I should not go with Homeside? Are they as difficult as I have heard and would i be better off paying the extra $$ for better service?

all and any advice is welcome

Thanks,
Ryan.

hmm st george r as painful if not more so than homeside, also very very very very very very very very very very very very very very hard (did i emphasis that enough) to get cash out for next purchase form St george

i would go AMP , no ongoing fees rate of 6.77% with offset account and easy for cash out and then do next purchase elsewhere

 

[Evachange]

You could aways go ChoiceLend at 6.55% comm rate of 6.61%, no app fee (as of 11 Aug 2010), no ongoing fee.

Fully funded by NAB but run independent.

At least with Choice you have no credit scoring.

Just a thought.

Take it easy.

 

[Spectre]

My broker went Homeside last year. After being told my loan was approved subject to valuation, more and more paperwork was needed. I went elsewhere both with broker and lender

Homesides cleaned up their act a lot since then and dont ask for half the paperwork that cba ask for nowadays.

They have issues with out of the box stuff though - i.e. 21 day settlements IMHO.

But I also think SGB are pedantic as hell, and their sharpness in the market isnt what it used to be.

Set and forget - homeside. cheaper rate, no package fees. Review on next IP

Agree with BT that AMP is a great lender for cashouts too.

 

[Rolf Latham]

Homeside run hot and cold........................much depends on who you are ( as in broker) in their eyes. We usually get good service.......now.

At least credit is consistent though

St George is similar.

Id vote AGAINST AMP , not because they arent much good, but because they have a high serviceabilty model and you might want to reserve them for later in your investing career. Dont use up that option now

Likewise Homeside

On that Logic of structured path financing, Id use St George................but be careful if its owner occ and you want a proper offset.

Comm is a reasonable direct comparison to St George if you want an IO offset that offsets properly, though the MISA offset isnt a transactional account.

ta
rolf

 

[tomred]

Thanks Everyone for the replies.

Rolf - can you pls explain what you mean by "high serviceabilty model"?
sorry, I am new to the game, just a one line explanation would do.

I intend to "live" in the apt for 6 months to get the FHOG and avoid stamp duty, then move out and rent it as an IP. Hopefully within 2 years have enough equity and savings in the offset to buy another.

still as confused about which lender to go with
given my situation and future plans outlined above how do Homeside v St George stack up?

Thanks again

 

[bawatkins]

St George can be difficult with Paperwork and the amount they need and as Rolf alerted at, their offset on an Interest Only is not a true 100% offset so if you plan to really use the offset with large sums of money it may be better looking elsewhere.

 

[Rolf Latham]

Hi Ryan

can only provide general advice on the info provided.............need a 16 page fact find and your left shoe size and your favourite brekky cereal b4 being able to make specific comment : )


Serviceability model means how much a lender will lend you based on your income.

St George is much lower than Homeside

St George , the offset account is a dog as inidcated while living on it, and thei LMI can be exxy compared to someone like CBA. Also pulling equty with stg at a later date for an investment purpose to buy another property with another lender can be hard.

Id suggest you look at CBA or ANZ as viable alternatives

BUT, having said that either the dragon or Homeside will do the job, just perhaps not ideal depending on where u want to go

PS, scratch the word "avoid" when ever you talk about any form of tax or duty

ta
rolf

 

[tomred]

Thanks Rolf,

re serviceability levels, when you say "St George is much lower than Homeside" do you mean that St George will lend me more based on my income? or less?

pulling equity in the future to buy an IP with another lender is definitely the way I want to go as I want to avoid x-coll, so i think I'll stay clear of StG and check out CBA and ANZ as you suggest. Thanks for the tip

 

[joycenmat]

Servicability is how much income you have to service (pay) the loan.

So one bank may say my income is fine to service a loan but STGeorge may say no you dont (in our eyes) earn enough to pay back this loan.

I think rolf means that St George have tougher guidelines regarding serviceability.


So ANZ may say 55k a year can service a 200k loan. And St George will say 55k will only service a 179k loan. So you have to earn more to apply at St George. SO they have tougher serviceability.

Every lender has a different criteria they use to assess you with before they will lend to you. (Brokers come into it as they look at all lenders and find one that suits you or alternatively which bank they think will take on your situation).

I have only looked at CBA, ANZ (tougher on deposits now like you to have at least 10-20%), Westpac, CUA, and Heritage BUilding Society.


Key word boys! LOOKED!

 

[tomred]

Thanks Joycenmat

I have tried "looking" as much as I can but I am specifically looking for an interest-only offset account and none of the lenders seem to list this rate on their web pages - I keep having to ask my broker to send them on and I am sure I am driving him crazy. Still, it is my biggest financial decision to date and I need to be informed.

Is there another way I can compare different lenders' int-only offset rates w/o annoying my broker all the time?

Thanks,
Ryan.

 

[joycenmat]

Call them! LOL will that work? !

No worries. And who cares how many questions you ask etc. You need to be informed.

Research, ask, look, read, get advice, its like being a detective. No wonder i always solve those tv murders shows or movies before the end!

 

[vk350]

Hi Ryan
My current PPOR has been mortgaged through Homeside for the last three years and I haven't one complaint about them. They approved our loan when no one else would, and their 100% offset has been very beneficial. The only bad thing I can say about them, is that they recently (last week) knocked us back on a vacant rural parcel of land after they had pre-approved the loan and we had put a deposit down. Apart from this minor set back I would still recommend them to anyone.

And yes we were approved this week for the 10 acres, not by Homeside but Bankwest. Tenants organised already, just need to get motivated and finish the reno's. Can't wait!!

Good luck with the loan.

 

[Rolf Latham]

Hey VK

What sort of tennants do u have on ur vacant block ? A bunch of cows ?

ta

rolf

 

[joycenmat]

Cows are good tenants. They still provide a tax deduction.