A question for the brokers....from a trainee broker

Hey Dave, how do you find out more about how to cross collateralise?

 

I have to agree with above brokers said.

A good mentor is essential. You could have spent weeks to figure out the deal is not bankable, but a good mentor will tell to to move on and advise the prospect/client where the issues are and how they can improve it.

I found some BDM from banks are not necessary more knowledgeable them some good brokers/good mentors. Also double check the answers from BDM before proceed.

 

Agree..... BUT

The recent changes mean it may be beneficial in *some* situations.

For instance - just had new clients come to me.

Bank made a royal mess out of loan structure - crossed up like crazy.

Normal approach for me is to suggest to uncross while releasing equity.

However - if I did that, they'd lose the large discount they have on their existing loans (around 1.3% off SVR) and receive a discount of 0.9% off the SVR because new loans would be set up - and those new loans would have the new pricing applied.

So long story short- if the loans were uncrossed and structured better, their interest rates would go up - despite them borrowing more! Crazy.

So in this instance - I left them crossed (so they continue getting their large discount) - set up a new release (albeit at the new higher rate) and got out enough equity that they won't need to go back to that bank anytime soon. When they do - then we'll need to revisit that structure.

Cheers

Jamie

 

Hi Jamie

I had the exact same problem recently with NAB. Uncrossed and they wanted to convert all the existing interest rates to the new rates - thought hard but got to keep existing rates.