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Liberty - anything I should be worried about?

Discussion in 'Property Finance' started by Lacrim, 20th Nov, 2015.

  1. Lacrim

    Lacrim Well-Known Member

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    Hi all

    am looking to further the portfolio, after first refinancing and simultaneously increasing a security/loan.

    Reason I'm refinancing is because I've pretty much hit my serviceability ceiling with the majors, and the loan - currently with Westpac, is at a lowish LVR - so ripe for a reval and increase to put down a deposit for the next property.

    Westpac has proven to be very conservative over the years, and I've struggled to negotiate any increases in the past. Enter Liberty, who, on initial calcs, are happy to take on the loan and increase it to at least 80% (or more if I go down the LMI route).

    Question is - are they a lender I should be wary of? By that I mean, are they inclined to ratchet up interest rates steeply once they've 'got me', or difficult when trying to borrow more for future purchases?

    I used to associate Liberty with dodgy, non conforming loans with a premium interest rates (to compensate for the risk)....yet, I'm being wooed by a 4.14% variable which is significantly lower than what Westpac are prepared to do.
     
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  2. Greyghost

    Greyghost Well-Known Member

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    They are one of the most competitive lenders at present. Lower servicing rate, cheap rates, taking repayments at actual. They are chasing business at present. I don't have a problem with them.
     
  3. York

    York Finance Broker Business Member

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    Although rate does seem to be attractive, sometimes there is more to a loan than the rate. As you said you are growing a portfolio. Therefore it's in your interests to not just seek out a low rate but find the right lender for your goal. A good broker will know which lender suits your requirements at a given point in your portfolio growing phase based on your equity position and servicability power.
     
  4. Lacrim

    Lacrim Well-Known Member

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    I'm actually approaching the tail end of my investing journey...all this is not to attain an attractive rate but to ensure the portfolio remains intact during the tough times ahead ie to free up equity and bolster the buffer.
     
  5. Lacrim

    Lacrim Well-Known Member

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    Thanks GG are you a broker or a customer....or neither?
     
  6. Richard Taylor

    Richard Taylor Mortgage Broker & Brisbane Buyers Agent

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    Lacrim you have to understand like any lender when they reach their comfort level on investment loans, 95% lvr's etc they will start to reduce the rate at a lower rate than others and increase the rate at higher than the RBA.

    I can think of plenty of lenders over the last 15 years or so that did just as Liberty have done and are now no longer with us or not competitive rate wise.

    No lender over a mortgage term is going to offer you the cheapest rate in the market it is just a matter of being comfortable with the rate you are paying and understanding the exit strategy if you decide to refinance away in the future.

    Cheers


    Richard
     
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  7. Lacrim

    Lacrim Well-Known Member

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    Looks like I'll be refinancing/cashing out with Liberty provided the val stacks up. Basically, the calculators fell over with all the majors but somehow worked out with Liberty.

    Not a done deal yet ie broker is putting through paperwork but indications are that all will be ok. So I get what I want - refi and cash out, loan for a new property and a low interest rate of 4.14%.
     
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  8. SharonC

    SharonC Member

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    how does liberty compare with pepper and nab for servicing to use as a last resort lender
     
  9. larrylarry

    larrylarry Well-Known Member

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    I asked my broker about liberty and he said he won't approach them unless as a last resort. He recommends choice lend before liberty.
     
  10. Lacrim

    Lacrim Well-Known Member

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    Why's that exactly- is it their reputation??

    And if NAB said no, does that include all its affiliates like U Bank and Choice Lend?
     
  11. larrylarry

    larrylarry Well-Known Member

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    Not too sure but apparently those who can't borrow more can approach liberty. Maybe other brokers here can shed some light.
     
  12. Redom

    Redom Mortgage Broker Business Member

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    NAB will assess Ubank, etc as other NAB debt - so moving to those choices is unlikely to help if NAB say no.

    Liberty have the strongest borrowing power calculator for now because they treat all your other mortgage debt at the actual repayment you pay, while others have loading. For someone with $1mill worth of debt, this can make a substantial difference to borrowing power.
     
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  13. Mick C

    Mick C Well-Known Member

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    1. Westpac is one of the WORST servicing lender on par with suncorp/ citibank and ANZ.
    Westpac no longer accepts negative gearing and will soon apply HEM living expense so the more property you have the worst it becomes with Westpac.

    2. So if you can't service with Westpac try ANY other bank and you should be fine...no reason to use Liberty , unless last resort.

    3. Liberty is a non conforming non bank lender. They tradionally service clients with
    - Bad credit
    - Loans that's been rejected by traditional banks
    - Low doc loans/ Self employed
    - High LVR loans
    - LMI rejected loans


    Having liberty on your "credit file"/ proftilio will reduce your credit rating slightly...especially if it's a recent hit.

    So as mentioned try other banks first before going to liberty.
     
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  14. SharonC

    SharonC Member

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    will having liberty on your credit file as a lender, cause other lenders to refuse your loan app later even if u can service with them?

    thanks
     
  15. Lacrim

    Lacrim Well-Known Member

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    OK, I'm planning to lodge the application form on Monday.

    If there are any savvy brokers out there who think they can get me over the line with a more mainstream lender, and willing to look at my file over the weekend (I have a simple financial snapshot detailing my assets, liabilities, rents, interest paid, my salary etc etc), pls PM me
     
    Last edited: 27th Nov, 2015
  16. larrylarry

    larrylarry Well-Known Member

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    All the best!
     
  17. Greyghost

    Greyghost Well-Known Member

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  18. Mick C

    Mick C Well-Known Member

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    Yes and no...it depends on how strong your credit file is to start with + how strong the deal is...

    Example: if you have liberty on your file and 3 month later you apply for a loan over 80% ( ie 90% or 95% loan) your chance of rejection is 60-70% higher than not having liberty or a non conforming bank on your Credit file.

    Same example, and you apply for a 80% loan...presuming your overall file is strong and "low credit hits" you generally be ok.
     
  19. Elives

    Elives Well-Known Member

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    so if you use non conforming bank, ideally if you stick to 80% you'll have no problem getting finance with the other major banks afterwards?