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Liberty and refinancing

Discussion in 'Property Finance' started by sage99, 14th Sep, 2015.

  1. sage99

    sage99 Member

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    8th Jul, 2015
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    Location:
    Sydney
    We're looking at refinancing and one option that has been recommended is Liberty. I work in finance (albeit a very different area to mortgages) and I know Liberty have a reputation as the lender of choice for applicants with less than ideal credit histories etc.

    Our credit history is clear with no issues whatsoever, I think the only issue for us would be serviceability with the new guidelines. I'm wondering if we refinance with Liberty and then decide to refinance elsewhere down the track, will other 'standard' type lenders view our time with Liberty as a negative?
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Melbourne, Nationwide
    I've refinanced a couple of clients away from Liberty here and there. As long as the application meets the appropriate lending criteria it's never been a problem for the new lender.

    In most cases though, when refinancing away from a non confirming lender we include some details about why that lender was used in the first place and if necessary we mitigate that in the new application. If the reason for using Liberty is 'serviceability', then that would mitigate it self if you were to refinance later.

    As an example, one client was placed with Liberty a few years ago because the 3 units (under the one roof) did not have a laundry, they had an arrangement with the neighbor. When we refinanced away from Liberty, the property had been renovated and each unit now had fittings for a washing machine in the bathroom (the tenants still went next door though).
     
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hi @sage99

    What's the rationale behind the Liberty application? If it's just borrowing capacity - you could check if it services with some of the last remaining mainstream generous lenders (NAB) or second/third tier/mortgage managers like Homeloans or Firstmac.

    I agree with Pete - usually it isn't too much of a big deal refinancing/applying for credit after an application with a non-conforming lender but provide commentary upfront as to why that lender was chosen.

    Cheers

    Jamie
     
  4. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Why has the broker recommended liberty over the other lenders? Is it purely due to servicing?

    Also how does this compare with say Homeloans Ltd doing 85% no LMI with IO?
     
  5. sage99

    sage99 Member

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    8th Jul, 2015
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    Location:
    Sydney
    Our total borrowing would be around $2.9M and some brokers we've spoken to are having issues with some lenders only doing up to say $1-1.5M so we're looking at possibly splitting it across two lenders. Liberty has been recommended due to servicing and rate.
     
    fols likes this.
  6. fols

    fols Well-Known Member

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    Met with my broker today and he also recommended Liberty as a good option for next few purchases- due to serviceability (will take actuals from other other lenders debt) and also rate (4.2 ish). This was on 80% LVR.

    What I'm really after though is option for 88% lend with LMI + take actuals for my other loans. Any lenders still doing this?
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Location:
    Canberra and Sydney
    First mac should.

    Homeloans will for the next week.

    Cheers

    Jamie
     
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  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Location:
    Melbourne, Nationwide
    Just be aware that if you're being recommended Liberty due to servicing criteria, you're probably getting to the limits of your ability to borrow money with your current income. Make sure the next purchase or two achieves your short and medium term goals, it could be a while before you can go back to the banks for more.
     
    fols likes this.