Best lenders for H&L package in WA

Discussion in 'Loans & Mortgage Brokers' started by Karlos1234, 10th Feb, 2020.

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  1. Karlos1234

    Karlos1234 Active Member

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    Can anyone advise the best lenders for a H&L package in Perth. The loan I need is for a ppor with 80 to 85% LVR, variable with redraw and extra payment. No offset required.
     
  2. Lindsay_W

    Lindsay_W Well-Known Member

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    No real 'best' lender for House and Land packages, you just need a lender that does construction loans (which most do) - suggest you speak to a good Mortgage Broker, I know @Jess Peletier is based in Perth if you're looking for someone local
     
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  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Hey Karlos, Best lenders depend very much on your circumstances...and also what the plan is for the property moving forward. :)

    Sounds like cheapest is what you're after, but there's likely to be more to it than that once we scratch the surface. :)
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Why no offset required ?

    ta
    rolf
     
  5. Ross Forrester

    Ross Forrester Well-Known Member Business Member

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    Why no offset? The after tax outcomes from an offset can be significant.
     
  6. sash

    sash Well-Known Member

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    I would suggest Pepper. They are great for servicing and will take the value on completion. They will do up 90% for Owner Occupiers.
     
  7. Lindsay_W

    Lindsay_W Well-Known Member

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    Don't listen to him, he's got a Pepper fetish :D
    Pepper's rate for Construction loans is 4.91% (most others are low 3%) and their fees are almost $1500, double what most other lenders will charge - much better deals out there with other lenders
    P.s. all lenders use on completion valuations for construction lending
     
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  8. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    :D:eek::D

    Please don't do that, Karlos...
     
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  9. sash

    sash Well-Known Member

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    Aahhh...gunga din.....did I tell you that I doing the following:

    1. House 1 build 216k....land 139k....end vals came in at 520. Stamps/Legals...came in at 6k. No more money in the deal. Loan percentage I/O is 4.35%. Happy to pay that as house val on completion is between 570-600k

    2. House 2 build 238k...land 155k....end val came in at 560k. Stamps/legals came in at 7k. No more money in deal. Loan percentage is 4.25%. End value is 600-650k

    Guess what happens when one finishes construction....move to someone like SunCorp...get PPOR rates very low 3s...or I/O IP loans from mid 3s. What did you put in 6-7k...but then most brokers won't tell you that will they? In my example if you need to pull 90% you will get equity back....also...but will need to pay LMI.
     
    Last edited: 13th Feb, 2020
  10. Lindsay_W

    Lindsay_W Well-Known Member

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    Huh what are you on about Sash? :D The 6-7K for Stamps ie. state charges? Yes most brokers will tell you what your state charges are... they don't vary from lender to lender. You don't pay them again when you refinance although you would be silly to use Pepper (pay their fees) then refinance to another lender once you finish construction - just use a lender that gives you a better product and rate in the first place.
    Those rates you are gettin are high
    Are you building and then selling or build and holding?
     
    Last edited: 13th Feb, 2020
  11. sash

    sash Well-Known Member

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    Have a look at stamp rates on land in Vic....around 3.7 - 4.5k on the numbers below. Pepper costs about 1.3k....conveyancer $850.

    The rest Pepper paid. :) I am doing a variation of these deals...all the time. ;)
     
  12. Karlos1234

    Karlos1234 Active Member

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    Thank you all for replies and sorry I'm a bit late.

    It's for ppor so no tax return and a redraw/extra payment should work if the lender is a big or medium bank.

    I'm building to live in. The H&L prices in outer suburbs and new estates are quite attractive at the moment.

    Thanks Sash but I'm not onto small lenders
     
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  13. sash

    sash Well-Known Member

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    OK each to their own...but Pepper is not a small lender.

    The reason for the suggestion is to build during construction and then move to a major. This sort of mindset is causing a lot of people to either not be able to borrow or even be able to pull out equity.

    Unfortunately...a lot of brokers prefer the majors because they there are additional benefits for them. ;)

     
  14. Ross Forrester

    Ross Forrester Well-Known Member Business Member

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    If you ever turn the property into a rental you will wish it had an offset. A redraw for a new private home you live in will not enjoy a tax deduction on the interest.
     
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  15. Lindsay_W

    Lindsay_W Well-Known Member

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    Spreading misinformation - to be clear Pepper Money actually pays brokers higher commissions than majors - higher maximum upfront and higher maximum trail therefore a broker would have more incentive to recommend Pepper if they were just in it for their own benefit...Actually easier for a broker to recommend them over other lenders if in it for that reason.
    Pepper do fit a need in the market but I wouldn't recommend for first time borrower over other lenders as they simply aren't the cheapest or best option, their products are good for those that need to use them.
     
    Last edited: 14th Feb, 2020
  16. Lindsay_W

    Lindsay_W Well-Known Member

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    Sounds good, out of curiosity, what suburbs are you looking at?
     
  17. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    No there's not, actually.

    @Karlos1234 Please get specific advice, and don't assume what 'seems' common sense actually is. Saving a few bucks now in offset fees can cost you a bomb down the track.

    I made a video recently about some of the traps home buyers fall into when they don't think long term - and the redraw factor is another prime mistake that LOTS of homebuyers make, simply from not getting good advice first.
    You can see the video [HERE].
     
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  18. sash

    sash Well-Known Member

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    There is a reason to use Pepper...but you won't believe ..me...so lets leave that.
     
  19. sash

    sash Well-Known Member

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    Jess...I have 3 construction loans with Pepper.

    On two ...I have only spend 6-7k...the rest was finance entirely by Pepper. This is because Pepper's policy allows the end val of the product. Most of the Big 4 will not do that!

    Each to their own...once done you can go to a big 4...and have tipped in very little in the way of deposit. 100% agree that you will pay about 0.4. - -0.6% more..in my case it was aobut 0.45% compared to majors. Each to their own.....

     
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  20. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    It’s always going to be best for ‘some’, but for someone doing a construction in Perth for a H&L package, it’s a completely different set of circumstances. :). You are far from the norm :)

    Highly unlikely end Val is better than land plus contract here - in fact, it’s usually lower.

    We’ve been seeing them valuing contracts down, knowing the end Val won’t stack up in Perth...which sucks for the borrowers...