BIG 4 - Best Serviceability?

Is it still CBA?

If not which of BIG 4 banks have best serviceability for investors at the moment?

 

Depends on your individual situation and structure of your income - need more info

For instance if you've got a high yield investment portfolio >6% then it is likely not going to be CBA because they cap yields at 6%.

 

Depends on the circumstances, but probably CBA or NAB. This isn't a 'one answer fits all' question though.

 

All quite similar now really, smaller bandwidth of difference than anytime in the last few years for most scenarios.

 

Depends on parameters of your income, household situation, existing debt. You'll find that if you went in with a vanilla PAYG single applicant and piled all debt into the one lender it will be similar. If the debt is spread and the right lender used at the right time certain lenders will outperform others substantially.

Same deal if you're self employed or have anything unique about your situation, the lenders will start to diverge reasonably in their end maximum borrowing capacity.

 

We are happy with CBA but relationship manager no longer seems to be on top of things as the complexity has increased. A lot of mixed advice that has resulted in taking steps that weren’t needed like him telling us that we needed to sell PPOR to secure part deposit for new PPOR and then changing that position once we had engaged an agent.

Is it something everyone experiencing lately with respect to lenders? It’s like we commit to one scenario only to find out 3 weeks later that revised numbers kill the deal feasibility.

 

Are you dealing with CBA directly? (no MB)?

 

Yes always went direct and while all looks good on paper, my relationship manager gets stuck at everything he advises and initiates at our behalf (like switching securities, valuations of existing properties, new loan). By the time he gets something processed, it gets turned into something else taking us back to square one.

Wasted 3 months going in circles - one pre-approval accepted but numbers revised down, resubmitted with more info and got the numbers approved but then bank insisted on valuation of two existing properties and pretty much killed most of equity we could get out that took us back to lower number.

Whatever he advises doesn’t remain feasible by the time it gets processed.

Not comfortable entering a contract and risking the deposit given nothing is firm anymore.

 

That sounds like a debacle. And unless you specifically instructed him otherwise, he's likely made a mess of your loan structure to top it all off.

If you have existing lending at CBA, their servicing isn't as good as when the existing is elsewhere. They tend to be best when your loans at a low rate with someone else, and you need allowances to be counted at 100%.

 

I often hear that about clients who have been assigned a private banker. Attentive at first but after a while they aren't as happy with them.

The valuations killing the deal is a common story, the best way around that is to have vals performed with multiple banks. Often this allows an avenue that wouldn't have been available if just using the one bank whether it is because of the val $$$ or policy or a mixture of both.

 

@standtall have you address your concerns with the RM? If so how was it handled?
If you're still concern might be time to ask to speak with other RMs, sometimes a change is a good as a holiday
Otherwise if you're still not happy, might be time to look at another bank or a broker.
Without knowing the complexity of your finances you might run into the same problems straight away or in a short period of time.
Be cautious of anyone suggesting you to switch all of your banking away to another bank without really good reason.

 

No.. I am not sure how he would take it but at the start of this application, he mentioned we are getting too big for him and we might get assigned a private banker instead of an RM. He also keeps suggesting that it might be easier if we delay our plans by 2-3 months.

May be he is afraid any further loans within this FY might result in our account going to a private/senior RM affecting his year end bonus?

 

Sounds interesting, hopefully the service element has been ok and they've been good working with you. Hopefully remuneration arrangements aren't altering providing the best solutions to you (that would be a big disappointment in the current industry).

Truthfully, those that write largeish volumes (CBA bankers, brokerages, etc), will see a noticeable shift in credit appetite for different things. Two months ago providing clearer answers was easier than it is today. There's been a change in stance from credit departments thats flowing through to credit decisions. Conservatism is king at the moment.

It will turn soon enough, but the uncertainty attached to lending is leaving customers and borrowers in a bit of limbo.
- We've seen living expenses uplifted randomly that didn't make much sense.
- Lenders that take 1 year financials as part of policy, average 2
- Sal sacrifice issues for things that are pretty standard
- standard explanations of simple differences (e.g. two payslips) have far more rigour applied to credit assessment
- far more questions asked to evidence some basic things (e.g. work histories/contracts)

Pretty much, all credit decisioning instances that are being applied differently today than earlier in the year. Most of the time it gets explained away, it just takes far longer to obtain an approval and provide concrete answers when credit teams start doing dances around immaterial and pointless things that don't marry up to risk. Its largely a compliance 'we're doing it 100% right' attitude now. This all swings in roundabouts. Right now, uncertainty is greater.

This is what a RC is doing to lending today.

 

I find the best way is to be upfront, if you're not happy he's probably not that happy either.

By the sounds it's getting to complex for this particular person to handle or you have too high expectations, likely somewhere in the middle.

I don't think it would matter what FY you were increasing your lending capacity, if it no longer fits his capabilities/thresholds it no longer fits, would have nothing to do with bonus IMO.

Again don't know your financial situation so pretty hard to comment, but suggesting delaying by 2-3 months gets you to EOFY... are you self-employed, has business been better this year?

 

I think you have summed it up well. In our case, frustration has built up as the relationship manager has continued to advise strategies without taking into account unpredictability from the credit team (but conservatism has also been utterly pointless at times).

This is the other extreme of poor lending practices affecting consumers. We have spent over $5k in various costs because RM set us on one course of action and then another but credit teams managed to ruin the feasibility by pointless nitpicking every time.

Fortunately, we didn't end up selling/buying anything. We could have easily burnt ourselves but I am sure RC is creating even a bigger set of victims by pushing banks into an uncertain environment of 'out of policy' conservatism.