Owner Occupied, Investment, Fixed rate, Variable rate, P&I, Interest Only, Offset, Equity loan, Foreign Income, Casual Income, Part time income, Bonus income, Strata title, Company title, Torrens title, Over 55s accommodation, Reverse mortgages, Lending to SMSFs, Lending to senior citizens, Lending to discharged bankrupts, First Home Buyers grant, Second mortgage, Servicing Guarantor, Security Guarantor…Owner Occupied, Investment, Fixed rate, Variable rate, P&I, Interest Only, Offset, Equity loan, Foreign Income, Casual Income, Part time income, Bonus income, Strata title, Company title, Torrens title, Over 55s accommodation, Reverse mortgages, Lending to SMSFs, Lending to senior citizens, Lending to discharged bankrupts, First Home Buyers grant, Second mortgage, Servicing Guarantor, Security Guarantor…
These are just some of the many, many permutations of what we see in our day to day interactions with clients. Sounds like a bad Billy Joel song doesn’t it?
If a client came to see us with any of the above, we’d not only steer them in the right direction but – thanks to our fantastic CRM system – we can tell them which of our twenty+ lenders will provide them with what they want and need and at what price…and we do this without charging the client and at the initial meeting.
You, looking for a mortgage yourself, is akin to doing your shopping at separate stores for each household item and groceries. You may get there eventually but you will take a long, long time and get yourself stressed. Worse, you may miss important finer details. Because of this most of us shop at a supermarket.
Think of us as the home loan supermarket.
So why do 48% of borrowers still try and do their own home loans directly with a bank?
No idea really.
By way of an example, a client who works for a large international bank – which recently decided to re-enter the broker market to offer mortgages – was declined for her staff home loan because her partner’s income is based on casual employment. The couple was obviously unhappy. They approached us. We received all their information by the Sunday morning. Two hours later they had pre-approval.
This couple had tried to shop themselves then decided a supermarket was a better option.
But here’s a couple of interest rate strategies deployed by some lenders that many of our current clients have been caught out by.
A bank will offer a terrific variable rate for a period of a few months. Many people looking for a loan at the time sign up. A few months later, the bank discreetly moves the rate up by 10 bps. A few months after that it does it again.
Or…
A bank will offer a special rate for a two year period. Say 3.85%. Then at the end of this period they move the rate up to their standard variable rate – say 5.35%. Now, anyone willing to pay 5.35% these days needs their head read.
Because moving a loan is perceived to be difficult, most people set the loan and forget about it. The lenders rely on this apathy to increase their margins. I call it “margin creep”.
Banks do this because of your lack of interest. They rely on it. They depend on it.
This apathy, is a staggering psychological mind-set that borrowers get into. On a loan size of $500,000 this lack of interest (in the second example) is costing them an extra $7,500 per year on an interest only loan. Slightly less on a P&I loan – but it would still cost an additional $145k more over the life of the loan.
Now most people that borrow $500k can’t afford to be paying that kind of additional interest. How about you?
The cornerstone of our financial system for the past 80 years has been confidence in our lenders. That confidence is still there but banks have been chopping and changing their product mix to either comply with APRA’s ongoing re-regulation of our banking system or just to minimize their risk exposure.
Some of these examples are:
- excluding foreign sourced income – this has had a tremendous impact on foreign buyers.
- No longer lending for over 55s accommodation – how do you sell a property like this?
- Increasing Investment loan interest rates• Increasing interest only interest rates
There are more but you get the idea. Whilst the above will not shake the foundations of our financial system, people that have been affected by these changes understandably have lost confidence in our banks.
The reason for making this point is that what banks may have offered you six months ago may have been withdrawn. Unless you’re working in this space daily, it’s almost impossible to keep track of these changes.
So, if you walk into a bank branch and are told you can’t do what you want, you can either visit another 19 banks and do the same or you could get in touch with us.
We know where to get what you want if it’s possible. And it won’t cost you a cent.