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Bank Application Fees, How much is too much?

Discussion in 'Property Finance' started by JCON, 27th Jul, 2016.

  1. JCON

    JCON New Member

    Joined:
    27th Jul, 2016
    Posts:
    2
    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?
     
  2. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    641
    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?
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,159
    Location:
    Gold Coast
    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
     
  4. Oshawott

    Oshawott Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    63
    Location:
    WA
    i'd gladly switch places with you....

    commercial loan 8.85%
    establishment 1.5%
    +legals valuation and qs. however no presale requirement
     
  5. JohnPropChat

    JohnPropChat Well-Known Member

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    10th Sep, 2015
    Posts:
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    Location:
    Perth
    Do banks take rental income (after development) for servicing? If not, people must be on super high incomes to service multi-million dollar deals.
     
  6. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    641
    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.
     
  7. Oshawott

    Oshawott Well-Known Member

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    19th Jun, 2015
    Posts:
    63
    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.
     
    Colin Rice likes this.
  8. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
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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)
     
  9. JCON

    JCON New Member

    Joined:
    27th Jul, 2016
    Posts:
    2
    Location:
    Melbourne
    Thanks for the info guys, I'm going to investigate further and work a little more to bring these values down.
     
  10. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    9th Jul, 2015
    Posts:
    1,078
    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!