Stop looking for the LOWEST interest rates

Discussion in 'Loans & Mortgage Brokers' started by Property Twins, 1st Sep, 2019.

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  1. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Diamond wrapped in gold

    Ta
    rolf
     
  2. MWI

    MWI Well-Known Member

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    Totally agree with you ladies, so many get stuck on minor details instead of seeing the larger major picture. :p
    Personally to me I don't mind paying a higher interest rate, having a larger portfolio, it is much more relevant to me to have flexibility and portability, access to greater equity, longer terms, less security provision, etc...
    If I can obtain more equity I don't mind paying a higher rate!
    So it should depend where one is travelling in their investment journey and what are the real priorities!
     
  3. sash

    sash Well-Known Member

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    It is simple it getting the lowest rate should be a number one or 2 priority....any broker who says otherwise needs to find another profession.

    Sure there are other features...which need to be considered but a good rate is also important.
     
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  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Life Skill..........

    Majoring in the Minors

    the price of being right is often way to high, but our lack of teachability and pride get in the way of logical progress

    ta
    rolf
     
  5. MWI

    MWI Well-Known Member

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    I just don't understand why others don't get it. What's the point say of getting a lower interest say by 0.5% if I get only $300K whereas I am able to get say $500K with a higher interest rate?
    I always instruct my broker on my preference criteria, not to X-Coll, having the longest IO terms or flexibility to extend after each 5 years, portability to pull out from each separate IP, etc....
    Perhaps this is only relevant with many IPs, I don't know? These factors are much more important to me.
    Imagine getting the best interest rates but not being able to buy the car of your dreams, instead an older or lesser model at a lower interest rates, or none at all, really?:eek:
    It's like once a dear friend said to me, "Don't you hate dealing with agents and checking all those statements each month, and the mistakes they make, etc...."
    It's weird how some of us look in other ways.... as my reply was, "No I don't mind at all, all those minor details as I look at my major goal, my asset base and how much my portfolio grew, how I would be unable to save that after tax money from incomes". I really prefer to see the big picture, and I choose to treat all those distractions/obstacles/issues as part of doing my business, that's all.
    Perhaps being in business and as my mentor JR, taught me, no point changing and complaining about the circumstances, I need to change myself.
    He also said:
    - Learn how to separate the majors and the minors. A lot of people don’t do well simply because they major in minor things.
    - Let others lead small lives, but not you.. Let others argue over small things, but not you.. Let others cry over small hurts, but not you.. Let others leave their future in someone else's hands, but not you.
    - Success is nothing more than a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day. It is the accumulative weight of our disciplines and our judgments that leads us to either fortune or failure.
    - There are some things you don’t have to know how it works – only that it works. While some people are studying the roots, others are picking the fruit. It just depends on which end of this you want to get in on.

    So I change my set of sails when the winds blow....cannot change the wind (well at least not yet, some may think otherwise?).:)
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    On whats important..........

    we leave that to the borrower and often ask them to rank their prios


    Able to lend the cash I want based on Servicing
    Able to lend the cash I want based on LVR
    Able to lend the cash I want based on my income mix
    Rate
    Fees and Charges
    Capacity to active debt recycle
    Cash out rules, now and and on refi
    Upfront vals
    Choice of valuer
    Security Property type flexibility
    In House DUA for LMI
    Neg gearing for IPS
    Where does this lender sit in regards of the capacity for my portfolio, should I use them early or later
    Structures - Unit Trusts, 3rd party guarantees, HDTs etc
    Family Guarantees
    No gen savings
    Bridging Capacity
    Term Loan or short term Bank Bill


    Loans aint loans

    ta
    rolf
     
  7. kierank

    kierank Well-Known Member

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    Love reading JR quotes.

    One of my favourite Anthony Robbins’ quotes (in this subject area) is:

    “Success in life is the result of good judgment.
    Good judgment is usually the result of experience.
    Experience is usually the result of bad judgment.”​

    I found this quote incredibly powerful and valuable, especially if I read it just after I had made a major stuff-up.
     
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  8. sash

    sash Well-Known Member

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    Since there are some many quotes.....here's one ...if you look after the pennies...the dollars look after themselves.
    Not saying rates are the only thing to consider but definitely a consideration. Too many people...missing the point!!
     
  9. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Yes it does - and if you're buying the next property with LMI it can mean an instant decline before an assessor even looks at your application.
     
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  10. fwmonger

    fwmonger Member

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    @Peter_Tersteeg @Jess Peletier Are you saying that having a few credit enquiries without credit accounts can lead to a declined mortgage?
    You can't just buy something without knowing what's on offer, right? I prefer to get the actual offer from atleast a few lenders before I choose one. How can I do that if a credit enquiry is going to affect my credit rating?
     
  11. Madcatters

    Madcatters Active Member

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    What’s the importance of LMI in this situation? Is it because there will be multiple enquires under a LMI loan? (The bank and insurer)? Or, does credit score have more of an impact on the loan approval in a LMI application ?
     
  12. Lindsay_W

    Lindsay_W Well-Known Member

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    Simple - engage a good mortgage broker who can negotiate with multiple lenders on your behalf, you don't need to apply with a lender before they'll offer a discount...
     
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    That's exactly what I'm saying. My previous example really did happen and it was before lenders became conservative due to APRA.

    Put yourself in the lenders shoes. If you saw a few open credit enquiries on a borrowers account, you'd probably look at and think that they're shopping around. But at what point does it go from shopping, to the other lenders knowing something you might not and the enquiry being left in limbo?

    I've had someone who's unemployed come to me for a loan and I tell them that they need a job with a regular income to qualify for a loan. They ask how much income and I might say find a job that pays you $60k and you're good to go.

    They then ask can I create a payslip that looks legit? Not a chance, that's fraud and I could end up out of business. What if I get a friend who owns a business to create a payslip? Nope, still fraud and if you give me any payslip, I'm now going to want to see additional evidence that the salary is actually being paid (even though the lender probably won't require it).

    So then they go to the next broker. They get the friend to make up a payslip, the broker doesn't pick up on it and proceeds with a loan application.

    God help the broker if the loan later defaults, triggering an investigation. The broker might not have knowingly committed fraud, but they get investigated and if a pattern emerges, they can find themselves out of the industry (search Youtube for "Bangrove Lawyers if you want an example of what can happen to a broker).


    My point is that people learn from each conversation with a broker or lender and there are plenty of people who just want the loan (a lot of them on this forum). Your credit report tells a story and multiple open ended enquiries in a short period definitely sets off some red flags.

    If you want to know what's on offer, talk to brokers, look at lenders websites, ask questions here, etc. Don't make multiple enquiries.
     
  14. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Credit scoring is much tougher in LMI, and the smaller your deposit, the more it matters. Credit scoring is done automatically and if it triggers an automatic decline there's often nothing you can do to change their mind.
     
  15. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If you buy subject to finance you have the luxury of getting the best deal at the time. Even with multiple pre approvals, the rate you get might not be as good as what's currently on offer.
     
  16. Madcatters

    Madcatters Active Member

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    Ok interesting. We are starting to think about our next purchase but not sure to go LMI again or not, we always have so far. My credit score is 1058 at the moment so fortunate there.
     
  17. Angel

    Angel Well-Known Member Premium Member

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    Did you mean they do not have the luxury of getting the best rate?
     
  18. fwmonger

    fwmonger Member

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    But the lenders are going to make a credit enquiry before offering anything, no?
     
  19. datto

    datto Well-Known Member

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    Stop looking for lowest rate? lol

    Stop dictating what the customer wants.
     
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  20. # 1

    # 1 Well-Known Member

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    Rate is one of the most important things for me.
     
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