Saw my Mortgage Broker today...

Would you be able to elaborate on that? How do they assess their own debts harsher than OFI debt? Are they still taking actual repayments from OFI?

I thought with all the APRA interventions, service calculators have been leveled out across the major banks?

 

Do you or your investing partner have any other debts at any other lenders?

The fact you are JV will limit borrowing capacity somewhat as well.


pinkboy

 

They take actual and apply a loading - it still works out better than most other lenders.

 

Might have to contact you to see if we can get a better option ;P haha.

I thought it was best to release the equity into the offset account for the loan so that no extra interest was accrued until the next investment purchase was made... I could be wrong.

Hey Pinkboy. The only other lender debt that he has is an ANZ car loan with approx $10k. He has a credit card, as do I, with no debt owing on these though.

 

@Kael, drop @Jess Peletier a line for sure. Being in good hands as far as your finance structuring goes is absolutely critical and it sounds like your current broker is much closer to average than they are exceptional.

 

Thanks Steven, will do

 

Hi Jess,

Got a few friends in the mortgage game too and we were just talking about LVRs and in relation to general strategy to ensure that you have the best push forward for growing your future portfolio - assuming this is your first property.

As someone else asked, as a general hearsay/advice, what sort of lenders would you be focusing on that give you more push forward initially when your LVR is low e.g. 80% to avoid LMI? And any reason over say NAB?

You mentioned preserving borrowing capacity? Is this due to NAB's assessment of your servicing is alot harsher than other lenders, or your total borrowing capacity?

Or by borrowing capacity you're referring to putting up a smaller LVR to cop LMI and preserve equity for deposit and borrowing capacity given times are probably going to get even tougher for investors looking to leverage up to fund their second and third properties?

Thanks!

 

A couple of quick answers:

If you're going to use LMI, do it early. You're less likely to qualify for LMI later on. The benefit of using LMI is you put less cash into the deal, hence you've got more money for more deposits.

NAB affordability calculators are still more generous than most other lenders. They're also (still) more generous when you've got some loans with other lenders, than if you have everything with NAB. As a result, the general wisdom for maximising borrowing capacity to maximise your lending with the NAB is to have your loans with some other lenders, then use the NAB when things get tight.

The reality post APRA is it's not the big banks that have either the best borrowing capacity or the best rates. This is moving more towards the mortgage managers with the best borrowing capacity, and the second tier lenders are leaning towards having more competitive products.

 

That's great to hear. I've hit my borrowing limit (or I'm very, very close), and my other loans are a mess - most of them shared with other people.

The property in most need of refinancing is the only one I have left with NAB, and the property is entirely in my name. I hope that means I've got a better chance of getting it through.

 

@SaberX NAB early on is silly unless you have a specific reason to use them. They are great later when you have a few IP's as they look at OFI debt more gently then other banks.

NAB have a high assessment rate so to use them early can limit your borrowing power. For eg, a family with kids and no other debt needs a much higher income to service with NAB than Macquarie for eg, who assess @ 7% as opposed to NAB @ 7.4%.

Macq, on the other hand treat OFI at their assessment rate too so often you don't service easily with them after you have a couple of IP's, where you probably still will with NAB.

Then to add to the fun, NAB will assess their own debt @ 7.4%, so the more you have with them the harder it becomes - this is why you use them when you NEED them and not a second before.

 

Shared loans will hurt your maximum borrowing capacity immensly.