Bank Application Fees, How much is too much?

Discussion in 'Loans & Mortgage Brokers' started by JCON, 27th Jul, 2016.

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  1. JCON

    JCON Member

    Joined:
    27th Jul, 2016
    Posts:
    11
    Location:
    Melbourne
    Currently going for a commercial bank application to build 6 units and they've quoted;
    (2mil approx lend)

    5.9 Interest Rate
    .05% Application fee (Bank)
    .06% Application Fee (Broker)

    These add up to 25k....
    on top of 3.5k Valuation fee and the 2k for legal and what not.

    Does these numbers seem right to the more experienced brokers on here?

    I'm feeling like its daylight robbery...or is this just a normal robbery?
     
    JCON, 27th Jul, 2016
    #1
  2. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    18th Jun, 2015
    Posts:
    1,658
    Location:
    Sydney
    Bank fees seem right although (and I hope I'm wrong) you have forgotten to include the QS fees.

    Re the broker fees - every broker charges a different fee but its also in the right ballpark. For development loans over $1mil we charge 0.3%.

    What have they quoted for presales? How many do you need to do? Also whats the loan term?
     
    Shahin_Afarin, 27th Jul, 2016
    #2
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Location:
    Gold Coast (Australia Wide)
    Its normalish.

    I suggest you have choice, just go to any bank branch if its a simple deal and save the 60 pts, and then work hard on the bank to get the 50 down to 25.

    ta
    rolf
     
    Rolf Latham, 27th Jul, 2016
    #3
  4. Oshawott

    Oshawott Well-Known Member

    Joined:
    19th Jun, 2015
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    Location:
    WA
    i'd gladly switch places with you....

    commercial loan 8.85%
    establishment 1.5%
    +legals valuation and qs. however no presale requirement
     
    Oshawott, 27th Jul, 2016
    #4
  5. JohnPropChat

    JohnPropChat Well-Known Member

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    Middle Earth
    Do banks take rental income (after development) for servicing? If not, people must be on super high incomes to service multi-million dollar deals.
     
    JohnPropChat, 27th Jul, 2016
    #5
  6. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    18th Jun, 2015
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    Location:
    Sydney
    @Oshawott you are paying for the ability to not have to sell any off the plan. Are you doing this through La Trobe? How many units are you doing?

    @JohnPropChat some lenders allow for no presales provided you can service the debt without the use of any proposed rental income.
     
    Shahin_Afarin, 27th Jul, 2016
    #6
  7. Oshawott

    Oshawott Well-Known Member

    Joined:
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    Posts:
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    Location:
    WA
    @Shahin_Afarin wow you figured out lender just with that info. Im doing 5 units. And you are correct, my top criteria is no preselling hence have to accept the rate.
     
    Oshawott, 27th Jul, 2016
    #7
    Colin Rice likes this.
  8. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Location:
    Sydney
    We do heaps of this stuff and there isn't many lenders that will take you to the cleaners like that product.

    Did you try RAMS? No QS requirement, no valuation fee, resi rates, no presales, max 70% LVR. They do consider on a case by case basis provided your overall position is strong (income, employment, asset and liabilities position, etc)
     
    Shahin_Afarin, 27th Jul, 2016
    #8
  9. JCON

    JCON Member

    Joined:
    27th Jul, 2016
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    Location:
    Melbourne
    Thanks for the info guys, I'm going to investigate further and work a little more to bring these values down.
     
    JCON, 28th Jul, 2016
    #9
  10. Colin Rice

    Colin Rice Mortgage Broker Business Member

    Joined:
    9th Jul, 2015
    Posts:
    3,184
    Location:
    Perth
    I was thinking LaTrobe as well. They have pulled back to 50% LVR in the west.

    Had one client who we approached La Trobe with and they wanted 100% presales. Thats the banks way of politely (sort of) saying NO DEAL!
     
    Colin Rice, 31st Jul, 2016
    #10
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