What Features Are Most Important in a Mortgage?

Nah - there's a few others.

I've been showing the love to Homeloans Ltd of late.

Cheers

Jamie

 

@Jamie Moore - see you in Queenstown?

Homeloans are pretty good to me - just note they credit score at every LVR so credit history will need to be clean without too many enquiries.

Cheers,
Redom

 

The pepper funded product - "acclerate prime" isn't scored. The "classic" - genworth insured is.

haha - no Queenstown for me. Don't think I'll be sending them that much - although did send 3 this week.

Cheers

Jamie

 

An investment offset account that has sub-accounts. I have this facility on my Suncorp PPOR home loan and it's quite useful for organising funds.

On an IP, I would probably have sub-accounts for the following - maintenance buffer, repayment buffer, transaction account ( rent payments going in, expenses ), equity.

This can be a mechanism for improving account security ( e.g. only the transaction account has facilities for transfer of funds to other individuals or banks ).

Edit - add to that - no LMI at 90% for professionals such as doctors, chartered engineers, etc, etc

 

2,4,5 for me.

 

So for example if rates are 5% they will calculate based on that (actual) rate, instead of calculating at (eg.) 7% to include a buffer?

 

More importantly they'll they'll calculate it on the actual repayment, rather than P&I over 25 years at 7.4%.

A $300k interest only loan at 4.5% has a monthly repayment of $1,125 / mth

Today most lenders will assess that loan using P&I repayments over 25 years at 7.4%. The repayments used would be $2,197 / mth

The difference of $1,072 is practically another $300k loan that you could theoretically afford. Lenders using actual repayments can lend almost double what a lender using adjusted payments can.

Realistically though, actual repayments isn't exactly appropriate when rates are so low. There are a few lenders that are taking actual repayments and adding a buffer of about 30% which I thing is a reasonable compromise. In this case the calculated repayment would become $1,462 / mth.

There are a few lenders who have managed to fall outside of APRA that still use actual repayments. This is great in the short term, but these lenders are still regulated by ASIC and the responsible lending laws. This is definitely a a responsible lending issue, these lenders will review their policies sooner or later, so I'd suggest that relying on these lenders is a short term band-aid solution at best. Better to work your strategy to a set of rules that are going to be more sustainable in the long term.

 

True - best solution with Homeloans is to go for Classic first though, much cheaper and great offering. The fees on Accelerate are touch high.

To get the Classic product, heaps of pre-APRA activity will cause issues. Have had a few come to me that have applied directed and got rejected by 4-5 banks, probably won't fly through the insurer.

Cashout is pretty good with Homeloans - so while i tend to agree with Peter (longer term band aid solution), if you still haven't got your money out and have it trapped due to servicing, you still have a window of opportunity to do it.

Cheers,
Redom

 

As Pete has said..actual repayments + a % buffer (20%-30%) is a very smart way to gain market share without being irresponsible.

The knee jerk reaction of many lenders going from actuals one day to P&I at 7.5% over 25 years is not a smart move by lenders who want any business from investors . With more than 3 properties you have to have a $300K + income to service.