Looking for the right mortgage broker

Discussion in 'Property Finance' started by masterjoe91, 24th Jul, 2018.

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  1. masterjoe91

    masterjoe91 Member

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    Hi PC,

    As the title suggests, i'm looking for an absolute gun broker to build a long term relationship with, with an almost immediate need to source a lender that can meet my requirements.

    I'm looking to enter the market slowly (specifically Melbourne CBD), small purchases every few months or so to build a foundation first during this credit crunch. My strategy/long term vision is to build a portfolio of net cash-flow positive properties with moderate/average growth potential and maximum 10% deposits.

    Thus, the goal now for me is to find the right broker, one who has ample experience around attaining 90% LVR, doesn't have trouble sourcing lenders for units with <50 sqm, specifically in this credit crunch environment, and aligns with my vision and become a team.

    The situation:
    - Looking to borrow $200-220k
    - 10% Deposit firm
    - Loan to include stamp duty and LMI
    - 24 year P&I investor loan (first property purchase too)
    - Rate: As good as possible (obviously)

    About me:
    - Considered High-Very High Income earner.
    - Minimal expenses
    - Net free cash flow approx $6000/month (i.e. serviceability more than adequate)

    The property:
    - A tiny 1 bedder in the heart of Melbourne CBD
    - Rents minimum for $380 a week. Property is net cash-flow positive by miles
    - (it's not a student/lodge/hotel/motel/serviced apartment. Just a normal residential 1 bedder)

    Please feel free to reach out to me either via direct/personal message or commenting below :)
    Looking forward to building a relationship with you :)
     
  2. Terry_w

    Terry_w Mortgage broker licenced 4 tax/legal advice Business Member

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    Why not just choose one yourself based on the posts made on the forum?
     
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  3. Property Twins

    Property Twins Mortgage Brokers - Australia Wide Business Plus Member

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    Hi @masterjoe91 - you may need to take into account that some of these 'small purchases' in the heart of the CBD may have lender restrictions around LVR.

    Appreciate you would like good cashflow - but sounds like these small units may be in high density complexes potentially with high strata costs.

    You may need to do your cash flows on these to see if these are viable, and lender restrictions add another level of complexity.

    In my view quality is more important than quantity to set you up for the long term given you have plenty of surplus income to invest in quality assets.
     
    Last edited: 25th Jul, 2018
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  4. tobe

    tobe Well-Known Member

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    I work in town and get to see a few of these purchases. As noted lenders have postcode and or building specific restrictions.

    There’s a choice between two lenders for properties under 40sqm. One goes to 60% the other to 80%.

    You will have to change your requirements in a broker, or make do with a new to industry broker who is happy to waste their time searching for a unicorn.

    If you are considering amending strategy I’ve noticed a niche in 1 bedders between 40-50sqm. These are possible to fund at 90% inc lmi. So you need to factor in 10% plus stamp duty and lmi.
     
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  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    When you say, 'become a team', do you mean someone who will take orders or are you looking for experience and someone who you will respect enough to listen to, and take advice?

    As a high to very high income earner, you're likely used to having people do what you say - it's possible in this situation the right broker might not be the one who does what they're told. :)

    As an aside - why 24 years?
     
  6. beachgurl

    beachgurl Well-Known Member

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    I once had a potential client who wanted me to provide him with a business proposal on why I was the right person to be on his team and saying what a great asset he would be for my business.

    I'm fine with the 20 questions to determine if we are suited and if my experience marries up with what they need, but like Jessica said are you looking for someone to take orders or perhaps it is wise for you to reconsider your strategy and listen to a n experienced broker' point of view on this?
     
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  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    on the 20 questions thing.

    When you have been around the carousel a few times, you realise its much more important who the broker wants to work with and why, than it is for the borrower to find a broker fit per se. Most clients have no useful filter to work through except sometimes a referral from a trusted client/friend, and even there it often doesnt work

    Not easy.

    had one this morning where we would be the 3rd back up quote for a 150 k lend after Ubank and HSBC and if they both declined our pre approval may get used.

    when asked what the client actually needed in a facility, they said well obviously - a loan for 150 k what else is there ?.............nuff said.

    ta
    rolf
     
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  8. Cimbom

    Cimbom Well-Known Member

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    If the loan includes stamp duty, that makes it pretty much a 95% lend which will probably be difficult to obtain in the current market, especially if you're buying a dime a dozen apartments. Have you considered the not remote possibility that you may have a negative equity situation in the future by buying these apartments with very little buffer? You would only need the value to fall by 20k or so for that to occur
     
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  9. Jason Tyrrell

    Jason Tyrrell Well-Known Member

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    If you can save $6k per month, it would only take 4 mths to save the remaining 10% and avoid LMI. Also be able to borrow in the first place.

    Melbourne unit prices are highly unlikely to move much in that time, assuming an increase at all.
     
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  10. TaylorChang

    TaylorChang Well-Known Member

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    6,000 per month free cashflow ? very high income earner ?

    With all due respect, 30% of my clients have $10,000 free cashflow per month.

    Most of them overall LVR borrowing is 70% - 80% max.
    Also, they are all happy with me to structure the whole finance for them and working with their accountants/planners.


    All the best for finding a broker who can assist you for your requirements.
     
  11. KinG3o0o

    KinG3o0o Well-Known Member

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    different people exist within an economy,

    if you have 2k cashflow, 6k is high - very high,

    just depends on the people he is around/social economic status.

    This is the internet, never forget people like to Up themselves.
    xD
    or maybe thats just his income yet to include other member of the household .


    as per post before me

    At 6k a month.

    you looking to borrow 200k

    as per many, melbourne apartments are not going any where,

    i would keep saving and buy without lmi or lower leverage unless you want to NG, which i think is pointless in this market. lol.
     
  12. Trainee

    Trainee Well-Known Member

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    Just because you have a detailed strategy doesnt mean its one good or two achievable.
     
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  13. MC1

    MC1 Well-Known Member

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    This is the only way we do business!
     
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  14. Ashory

    Ashory Member

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    So how do I know who a mortgage broker wants to work with?

    It seems as though many of the brokers on here are more geared towards investors.

    The idea of selecting a broker from these pages appeals to me as I can get a great idea of their experience and opinions but I'm just a first time home buyer who smells a rat when it comes to my current broker.
     
  15. Trainee

    Trainee Well-Known Member

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    If your only looking for ppor loan, have clean credit and dont plan on buying ip later, just find the lowest rate.

    If you have future plans on buying ip, your an investor.

    If a broker wants to work with you, theyll take time to discuss your future plans.
     
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  16. Property Twins

    Property Twins Mortgage Brokers - Australia Wide Business Plus Member

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    Ashory what Trainee said. If lowest or "cheapest" rate is the goal, then you can find that on Google.

    If long term plans with effective structure that will give you the flexibility to move forward then you need someone with a long term focus on your goals.
     
  17. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Um............

    Without knowing anything about the dreams goals aspirations resources risk profile and specific goals that probably not the best approach for most people.

    Thats about the same general advice as buying the cheapest new car you can get, they all have 4 wheels and provide transport ........


    Loans aint Loans

    ta
    rolf
     
  18. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    What makes you FEEL that way about your current choice, and is it a white lab rat, or a sewer rat ?

    ta
    rolf
     
  19. Ashory

    Ashory Member

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    Current recommendation is a Suncorp Loan which he is pushing like no other...

    I have been told there is "no difference between redraw and offset accounts and I am better off with a redraw as it is forced savings, if we can afford it my whole paycheck should just be deposited directly to the mortgage because we can redraw whenever we want to." I may not be a broke but this seems off to me? I know there is a difference between the two, a significant difference.

    I was given 4 options of Suncorp, Bankwest, ME and ING but the only information provided was their rates. I asked for more information but most of his replies were generic. Yes, some have annual fees, yes some have offset option, yes some have redraw option, yes some can be split etc. etc.

    Communications are somewhat rushed and I just don't feel good about it.

    Future plans have never been discussed.

    Or maybe my rat senses are wrong, he's a wonderful broker and I am just getting nervous about borrowing a substantial amount of money?
     
  20. Property Twins

    Property Twins Mortgage Brokers - Australia Wide Business Plus Member

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    Whilst I don't know your goals, redraw will mean you loose control of the money. The lender may or may not release the funds down the track. We recommend our clients park money in the offset account, so they can effectively utilise and also make changes to the existing structure of the loan easily.

    What are your goals? Do you intend on investing further? Even if you weren't, for risk mitigation would be good to control the money.

    Unfortunately market is focused on the low rate, and that is what is advertised...even if it is at the detriment of what you would like to achieve.