With all the ghost noise about Banks pushing to lowering the assessment rate........

euro73 · 18th May, 2019

Pay down debt. Thats the new maxim.

Lucki · 19th May, 2019

Some good thoughts from all you guys as usual, thanks very much

Lucki · 19th May, 2019

So with the liberals winning, would their tax offset in the 18-19 tax return of up to $1080 have a positive impact on servicing for people right on the line? Would lenders even incorporate this offset in their calculators soon enough to benefit potential borrowers? What has usually been the trend with changes such as these?

tobe · 19th May, 2019

Lucki said: ↑

So with the liberals winning, would their tax offset in the 18-19 tax return of up to $1080 have a positive impact on servicing for people right on the line? Would lenders even incorporate this offset in their calculators soon enough to benefit potential borrowers? What has usually been the trend with changes such as these?
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Banks update their calculators with the new tax rates closer to the EOFY. Odd they assume current job and tax rates etc when calculating a 30 year commitment, but there you go.

Rolf Latham · 19th May, 2019

tobe said: ↑

Banks update their calculators with the new tax rates closer to the EOFY. Odd they assume current job and tax rates etc when calculating a 30 year commitment, but there you go.
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new downsides like increased Hem etc, get incorporated quite fast, because there is a regulatory need.

July 1 they need to usually update their tables anyhow.

As an aside, if my borrow ca were that tight - id be looking for a new lender or strategy.

ta

rolf

Rex · 20th May, 2019

euro73 said: ↑

None of those are non banks. They are mortgage managers. Just like Aussie... another mortgage manager who people think are a non bank. They are not. Here's how Aussie and other Mortgage Managers work. They get their money on a wholesale rate from a real funder. They rebadge it as their own, and sell it to you . Let me use a couple of examples that are well known brand names.

1. Aussie. Aussie used to get its money from Origin ( which was ANZ's wholesale arm back in the day. It isnt any more- its owned buy Columbus Capital now) and from PUMA ( Macquarie's wholesale arm) stick their logo on it and sell it at a retail rate. They are then responsible for all after sales service such as issuing mortgage statements, dealing with your enquiries etc... It creates the impression that Aussie is lending you the money. But if you look at your mortgage documents you'll see otherwise. These days they get their money from their new owners- CBA. They do the same with credit cards and car loans. Next time you see someone with an Aussie credit card, flip it over and take a look at the issuer name. It will be ANZ or Westpac. Similarly, next time you meet someone with an Aussie car insurance policy....read it closely and you'll find its CGU. Virgin Money used to issue Westpac credit cards as well. Woolworths Money uses Macquarie for credit cards .... see how it works?

2. Wizard. Remember them? Another mortgage manager. They got all their money from GE Money back in the day. The GFC came along, smashed GE Money badly, and they pulled all money out of all non US markets so they could plu all the leaks in the US... and it left Wizard ( amongst others) high and dry... so Aussie John sold 49% of Aussie to CBA to raise the cash to buy the Wizard business on the cheap and its franchisees were given two choices.. FIFO. Fit in or F Off. Most moved to Aussie - they had no choice really. He owned their businesses wholus bolus . It was a ruthless business deal by John and he made squillions....

So with regard to Reduce and Pacific, what you have to understand is that they are both Mortgage Managers putting their brand on someone else's money . If you look on the Reduce website it explains that they get their money from other lenders . Specifically their website says "Our funding is powered by wholesale lenders such as Bendigo Adelaide Bank, Bank of Sydney, Origin MMS, Pepper Money, LaTrobe, Sintex and BC Funding. They enable us to access competitive alternatives through a process called Securitisation"

My understanding of Pacific is that they are funded by NAB's wholesale arm, who also fund UBank and ljhooker and loanmarket and choicelend and others....

loans.com.au is a little different. It is wholly owned and funded by Firstmac , who are an actual non bank lender. ie They have their own funds. Their team is in the same building as Firstmacs team on Queen Street, Brisbane. In fact, Firstmac owns the building as well.. Besides the logo, the products are exactly the same. Because of that, loans.com.au uses the firstmac calc, which will be the best of that bunch - except for whatever product Reduce uses Pepper funding for. If Pepper if providing funds for one of the Reduce products, you can be sure it wont be for the low rate products ...

So hopefully that helps you understand the difference between non banks and "non banks"

In the end, if you want to test your absolute max borrowing capacity, you need to speak to someone about running your numbers with Pepper, Liberty or Bluestone, taking into account what I have outlined above. That information above is pretty well the A-Z of things. I didnt forget to include some non bank lenders I didn't leave anything out
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So do mortgage managers assess serviceability in line with the standards used by their wholesale funders? Or do they just do their own interpretation of APG223?

Sorry for all the questions, but without being in the industry it's all a bit of a mystery.

Peter_Tersteeg · 20th May, 2019

Rex said: ↑

So do mortgage managers assess serviceability in line with the standards used by their wholesale funders? Or do they just do their own interpretation of APG223?

Sorry for all the questions, but without being in the industry it's all a bit of a mystery.
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Mortgage managers are a bit of a mystery unto themselves for everyone.

They tend to use the lenders serviceability calculator (with their own branding), or they might just use the mortgage insurer's calculator (which tends to be worse).

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With all the ghost noise about Banks pushing to lowering the assessment rate........

euro73 Well-Known Member Business Member

Lucki Well-Known Member

Lucki Well-Known Member

tobe Well-Known Member

Rolf Latham Inciteful (sic) Staff Member Business Plus Member

Rex Well-Known Member

Peter_Tersteeg Mortgage Broker Business Member

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With all the ghost noise about Banks pushing to lowering the assessment rate........

euro73 Well-Known Member Business Member

Lucki Well-Known Member

Lucki Well-Known Member

tobe Well-Known Member

Rolf Latham Inciteful (sic) Staff Member Business Plus Member

Rex Well-Known Member

Peter_Tersteeg Mortgage Broker Business Member

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