Discussion in 'Loans & Mortgage Brokers' started by WilliamGoh, 1st Feb, 2020.
Owner occupier Variable home loan. Which of these lenders do u think is better?
You should talk to a good mortgage broker instead of diy.
Hi William, what are your goals? What are you trying to achieve with property?
These low rate lenders are great for people who have no interest in property investment.
If you are looking to grow a portfolio, there's a lot more to it than just a low rate - and you're not going to get what you need from these types of lenders.
I just want to pay off the loan ASAP
I was looking into both of these. I called Homestar and spent probably 15 minutes on the phone with a lady. She took all my details; loan amounts, interest rates, rental returns, incomes etc. She kept me on hold for around 5 minutes and then came back and said ‘I’m sorry we’re not in a position to lend to you at the moment’ without a real reason. LVR was fine, I’m in a good position and more than enough cash to put in. Went back to St George (already had 3 loans with them) and didn’t have a problem getting the loan.
I’m always wary of the little lenders.
Perhaps urs is construction loan ? They don't do construction
Have a read of the threads where someone who did that realised they have to move for work and want to keep the property as an investment.
Look, if you just want to pay off the loan and never move, it doesnt matter much which lender you go with. Life is rarely so simple. There is a lot of useful information here but only if you want to learn.
You may think lenders are pirates and everyone else is just out for for your money, but you have no choice but to play this game. Might as well learn the rules?
...or buy their shares if you really think they are successfully fleecing people
Wouldn't it be lovely if the value of the shares was calculated like an offset account and saved you interest instead of paying dividends.
It wasn’t construction. I’d heard some good things about homestar. Not sure what happened in my situation
what sort of car do you drive and why ?
What .... ?
Why are you in an investment forum? Makes me think that maybe you actually want more than just to pay off your home...in which case, my original question stands.
If you genuinely have zero interest in anything other than paying off a home, and never investing in anything, ever...
Or owning more than one property at a time, ever...
Then those lenders might be okay.
The issue is that while the product might be fine, you're never going to get the kind of advice you need to grow a portfolio, maximise the benefits you get from investing in property or plan for future changes, which means you might be making expensive mistakes and you won't know it.
Property loan structuring mistakes are expensive, literally can cost you thousands a year - not necessarily out of pocket, but it's money that could be going IN your pocket if you get it right.
Tony Robbins calls that a Pattern Interrupt, designed to bump us off the current thought or emotional track, to allow us to make better decisions.
Most ( not all) folks drive a specific type of MV because it suits their specific needs.
Some drive a Lotus 2 seater sports car because they are single and like a fang to and from work everyday.
Some families have 5 kids, so need something that seats min 6 or 7.
Yet others still have a 3 tonne caravan or boat to tow.
Those are all specific needs that govern what MV is useable.
Where it gets grey is why do some prefer a Lexus over a Camry, or a Volvo over BMW.
Mostly, but not always its because we like the prestige, and extra features and the soft leather.
Sometimes, people have deeper specific needs and some that want peak safety, will choose an XC 90 over a Q7.
Long winded post to say .........we dont know what we dont know, because we havent done enough research on our real need..............and therefore our qualifying questions are not as powerful as they could be. Better questions usually result in better outcomes
We have assumed that if we need a 5 seater car, that a Mitsu Mirage will suit out needs, because all cars provide transport.
I could be wrong, i suspect you dont drive the cheapest car you could find.
Peeling the onion on someone's real, rather than stated needs on any untangible, and often tangible products reveals deeper real needs.
With 20 years experience, our clients usually arrive at a different needs hierarchy or decision tree than they initially thought, using a simple but not obvious guided discovery process.
Some CORE product need considerations other than rate and fees cost ( and the dreaded CCR model - yuk) are:
What will I be doing with this property in 5 10 or 20 years time
Have I explored my risk appetite for active debt recycling, where if properly implemented, rate can become close to irrelevant
How safe do I want MY money to be
If the rate market jumps, what fixed rate options do I have
Do I need a REAL offset, or will a redraw-offset do.
What are the IO roll over options
Do I need best of breed apps and online access
Then we have some specifics, which seem like they don’t apply to most people………..but often what wasn’t a consideration 5 or 10 years ago suddenly becomes one or several.
What is the portability/security sub process like
What is the Partial Release process like
What are the cash out rules like
Does the lender offer upfront vals
And as we go through that process, things come up that even surprise me, there are dozens more considerations and permutations
If none of those matter, then a basic lowest real cost product is the way to go.
Loans aint Loans
Surely they would have no problem telling Geeza that upfront then? Instead of wasting their time gathering all the data etc.
If you don't want to take the advice listed above by some very knowledgeable and experienced brokers and investors then it just comes down to two things,
Which of those lenders have 1. the cheaper rate and 2. the lowest fees
Simple decision surely??
Why is it for people not interested in investing? Can't a PPOR loaned with Tic Toc for example be transformed into an investment property?
Sorry, I really struggle to understand why it's not for investment, can you please give an example?
Some lenders may not provide offset accounts, some may provide accounts that look like offsets but are not (redraws disguised as offsets), or offsets that don't 100% offset (the "rip-off" offsets)
Some may not offer IO.
All of these become critical because people often want to use money they have used to "pay down" the loan to buy their new home - if they do this without the above, the interest will not be tax deductible.
The loan might be quite suitable for investing, but do you know that it is or isn't?
What's their policy on equity releases in the future? How do their other general policies match your other goals or needs? How does their servicing criteria align with your longer term goals? Do they have an offset account and if so, does it operate in a manner that is consistent with your needs both now and in the future? ...
So far the main criteria seems to be the cheapest rate or lowest cost. Certainly that's always important, but I know from very long experience that this is rarely the most important criteria for selecting a lender or product. Most people don't actually understand this.
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