1.6% discount by Westpac

Discussion in 'Loans & Mortgage Brokers' started by Omnidragon, 29th Nov, 2015.

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  1. Wukong

    Wukong Well-Known Member

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    Care to elaborate?
     
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    It appears they're offering the 1.6% discount for people with total borrowings of $2.5M or more. Most people can't afford to borrow that much.
     
  3. Omnidragon

    Omnidragon Well-Known Member

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    Yea the guy was pretty adamant he couldn't do it for less than $2.5m.

    I figured there are some cheap rates with smaller lenders out there too, but their platforms are so inconvenient to use. Takes me 15 minutes to bank a cheque at a certain American bank and they always make me fill in a deposit slip like you do in the 60s. And can never find a branch for a certain Queensland bank.
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Hi Omni

    Do you have approved pricing from the state manager at that level OR is it lets try, coz I havent seen anything > 1.45 for loan aggregates greater than 2.5

    ta
    rolf
     
  5. Omnidragon

    Omnidragon Well-Known Member

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    Mine's not approved yet, but my friend's is. I'll ask him who did it.
     
  6. Rickwood

    Rickwood Member

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    Up .15 on Nov 20. A quick chat and they dropped my PPOR by .4 (1.3 in total), effectively reducing my rate by .25 taking the rise into account.
     
  7. Fortune Favors the Bold

    Fortune Favors the Bold Well-Known Member

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    Wow - 1.6% discount. At what stage in the loan process should one negotiate this? I've just received pre-approval from ANZ on a $1.6 million loan for a PPoR and at this point they're only offering a 1.2% discount.
     
  8. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    We normally negotiate pricing at the same time the application is submitted.

    ANZ isn't exactly very competitive at the moment. 1.2% isn't that bad for ANZ, but fairly average compared to what else is available.
     
  9. Fortune Favors the Bold

    Fortune Favors the Bold Well-Known Member

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    Right. I wish I'd known that. The pre-approval was done through an ANZ "mobile lender." When I suggested that the discount didn't seem very competitive she suggested that we'd negotiate that after a purchase has been made. I suppose that sort of makes sense, but does make it a bit hard for me to calculate what I'll really be able to service, and likely necessitates me shopping around to other banks after purchase and before taking a loan, or working through a broker. I'm knew to all of this trying not to make a mess of things, but it's not so easy.

    Is common / possible for people to get a pre-approval directly through a bank and THEN go to a broker to identify the actual loan?
     
  10. chylld

    chylld Well-Known Member

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    I prefer going ONLY through a broker so that the best product can be chosen for me without multiple pre-approvals ruining my serviceability / credit file.
     
  11. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    In the case of a pre-approval, we don't negotiate pricing at the pre-approval stage because there's a high probability that the parameters of the loan will change. In many cases we've had the pricing approval revoked and been told to organise it again, often with exactly the same result (just extra work, thanks CBA).

    Negotiating rates is getting very tiresome. We've generally got a good idea of what we can get, so why do lenders make us go through the process of filling out forms to organise it? The approval process is already automated by most lenders anyway. They should simply be able do it.

    There's no real problem getting a pre-approval via one channel and then getting the loan through another channel, except that the loan needs to be restarted from scratch.
     
  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    id hope not.................

    Mostly, clients dont need pre approvals

    they are often sold a puppy

    ta
    rolf
     
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  13. Fortune Favors the Bold

    Fortune Favors the Bold Well-Known Member

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    Ha - "sold a puppy" meaning that banks use it as a way to lure the customer in and increase chances of them taking a less than optimal loan from that bank?

    Just for information, the reason we went ahead and did the pre-approval was because our situation is a bit strange - high wealth, low income, and we wanted to be 100% sure of what we could borrow before buying something. The reason we did the pre-approval with ANZ was that they were willing to assess us more favorably than other banks I spoke with and because brokers I spoke with seemed generally unsure how best to proceed, especially in consideration of the overseas wealth in shares and overseas dividend income. For example, ANZ has thus far been willing to assess our serviceability on the basis of their own projected 6% annual dividend income from my overseas shares (reality is that it's around 1.5%). Westpac said they wouldn't consider them at all. With our current low incomes the consideration of overseas shares and dividend income was crucial.

    Any suggestions moving forward Rolf? I understand that you're extremely knowledgeable.
     
  14. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    If ANZ is accepting the assumed 6% dividend from overseas shares and this income is required for affordability, take the pre-approval you've got - I hope the pre-approval is in writing.

    Make sure you've got a finance clause on any offers just in case...
     
  15. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Thanks for the kind words, im often wrong but never ind doubt.

    In your case 1.2 discount is good, since 1.6 % off no loan doesnt work : 0

    ta
    rolf
     
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  16. Fortune Favors the Bold

    Fortune Favors the Bold Well-Known Member

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    Hi Peter, thank you.

    The pre-approval is in the form of an e-mail from the ANZ mobile lender, as follows, with no attachments:

    ****

    Congratulations, we are in receipt of your pre-approval for Home Loan finance with ANZ.

    ANZ has approved a loan facility of $1,600,000. Please note that this loan can be reduced if you purchase for less than the purchase approval amount of $2,000,000. Approval is for an 80% Loan to Value Ratio. The structure is 1 years Interest Only on a 30 year loan term at the discounted rate of 1.20% off the standard variable rate - currently 5.56%, using the Breakfree package. If XXXXX [my partner] is working for the XXXXX [her employer] at the time of settlement the $375 Breakfree package fee will be waived for the first year as they are an ANZ@work employer.

    ANZ has approved the loan facility subject to the following requirements:

    • Contract of Sale evidencing a purchase price of no more than $2,000,000. If greater you will need to cover the additional costs from your cash reserves.
    • Full valuation report for the new property. We will order this for you post purchase. ANZ require this valuation to confirm the purchase price and that the property is an acceptable security type. Standard for all properties above $1m.
    • Title search to be completed by ANZ
    • Income and serviceability to remain acceptable
    • We will need to open an ANZ One account for your offset account.
    • ** As briefly discussed, the Assessor has requested two recent invoices from XXXX [my partner's business]. This is to clarify that you are still trading as a consultancy and not as a PAYG employee as your tax return shows both income types. The two largest recent invoices would be great. If you can forward to me I can have that condition removed asap.

    This pre approval is valid until 19/03/2016. If you do not find a property within this time I can extend your approval by providing some updated information to ANZ and the structure would need to change as we have discussed.

    Also remember I can run property profile reports on any property you may be interest in. If you would like a report, please let me know the address and I will be happy to email one through to you.

    ANZ is the most awarded home lender in the market over the past 15 years so I am sure you have chosen the right bank, with the right products to fulfil your needs. I look forward to working with you both into the future.

    If you have any questions in the meantime please give me a call on XXXXXXXX or send me an email.

    Good luck house hunting!

    ****

    Is this sufficient, or should we ask for something more official with an ANZ logo on it, etc?

    Is there anything missing or out of order in the above?

    By finance clause you mean "this our offer, subject to finance"? Is it possible to do that an auction (it's almost exclusively auction in Melbourne)?
     
  17. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    servicing is obviously very tight : )

    ta
    rolf
     
  18. Fortune Favors the Bold

    Fortune Favors the Bold Well-Known Member

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    Tongue in cheek, or sincere? It's sometimes hard to read tone over text.

    It's my first time at all of this, so I'm learning as I go...
     
    Last edited: 30th Nov, 2015
  19. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    one year Interest only when the product offers 10 is usually tight servicing ie 29 year v 20year loan term

    im german, so I tend to say what I mean , but its often lost in the interpretation :)

    ta
    rolf
     
  20. Omnidragon

    Omnidragon Well-Known Member

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    1 year IO seems quite short, I've never had that before.