Mortgage Questions

[SJW]

Bara,

Interesting. Have you had a bad experience or do you work for a lender that competes with brokers?

A good broker works for free and you get a better loan than if you would have gone to a bank direct a majority of the time.

I do welcome your comments and post, most of what you said had relevance, with some obvious lack of available options. This is where broker helps. For the record, I am not a broker, but work for a lender that works with them.

I would suggest to Kitty that there are some lenders that will take the income 100%, so as long as the repayments are within the lenders capacity rules, then there is an approval available.

There are also lenders that offer self certified loans where you don't need to provide income evidence and can advise what your total income is ( including income not reported on tax returns ).

I agree that the deposit is the biggest hurdle, but there are also loans that offer specialised mortgage insurance products that only require 3% genuine savings and 10% gifted funds of which the FHOG can be part of.

There are also lenders that offer 100% home loans, however, I have covered these options off in a previous post.

These are the things that I am happy to advise of, because you don't get this information UNLESS you use a broker or someone that does not sell their own lending products.

So Kitty, sorry to use you as an example, but there are options available for you. As your solutions will be personal, feel free to PM as other members have done and I will discuss in more detail.

Bara, I also concede that not all brokers are ethical or have the customers best interests in mind. This is the same with any industry, but the majority do the right thing and offer a valuable service for clients.

[KittyKatSmack]

I do appreciate all the advice both of you have given.

Different points of view ultimately give a variety of information.

When I said other sorts of income, I meant that I will be entitled to pensions from Vet Affairs, MCRS and MSBS and well as partial pension from Centrelink. I will actually be better off that some poor buggers out there forced to live on the poverty line.

It does however depend on assessments that are being reviewed at this very moment and I can only cross my fingers and "hurry up and wait".

I will always declare all my income to the taxman, as I don't think I am clever enough to do dodgy stuff.

I am just getting sick of renting all the time, and would like to purchase a property with the long term goal of making it an investment property.

I want to take advantage of FHOG, and because I don't want to waste time trying to save (I am female, therefore I shop, and I have a car to rice, and Bruce needs the XR8 air induction and and and....) so saving is a bit out of the question for me... the more I earn the more I spend.... but it is my fault and I can admit to it. However, I am excellent at paying my bills on time and I don't default!

No deposit would be excellent for me, and would let me get what I want sooner.

I want off the rental roundabout and the sooner the better.

All the so called pensions that it would appear I will get will still have me above $50K a year, and my debt level will be a car loan and a couple of credit cards...

That's about the bottom line of it.

I am not really worried about whether or not it is PM or public discussion, because if it helps others, then I'm all for it.

No purchase is likely to take place until after Easter anyway... this is all information gathering at this point, which is what everyone who reads this thread will be after.

I, for one, appreciate the knowledge and information that is being shared here by everyone!

Thanks again to all of you!

Cheers!

[bara]

SJW, Firstly it's admirable that you started this topic for people to ask questions regarding finance.

Just to clarify, I wasn't having a go at anyone specifically and that wasn't the point of my previous post.

More relevantly it was in relation to the use of brokers in Qld where there is no specific regulations prohibiting any average tosser with no financial background to open up shop and call himself a finance broker. That I have an issue with.

Also the number of them that simply offer people an interest only, line of credit facilities as the answer to their servicability issues, where an interest only facility is really only suitable for investors trying to maximise their tax write offs, or for people (non-investors) who can stick to a budget without fail.

Obviously I work for a Bank. I don't see that as being so much as in competition with Brokerage businesses, as in conjunction with them, as most Brokers do not source and also fund the deal, rather simply as stated take info from the applicant and pass in onto a proper lender.

I've also done several years of debt collection. So better than most lenders out there, I can see when a deal should and should not be done, and the results of selling a loan to people who should never have had one in the first place.

I note you mention a "good" broker works for free. Ummm I don't think so. They have to make their money somehow. I'm yet to come across a Broker that doesn't want a commission or trail of some sort. While they may not bill the applicant directly, you can be assured there's a payment being paid by the lender to the broker.

Of course there are nearly always options for persons looking to obtain finance where they have bugger all savings and/or dodgey income, however I would think it obvious that this provision of finance comes at a much higher cost in the long run to the applicant. Although, again, the average fool who wants something right away without thinking of the possible consequences will not take this into consideration when signing on the dotted line.

I did briefly cover off on this when mentioning the prohibitive cost of LMI for someone with no dep bar FHOG.

As for lenders that provide finance on the basis of not having to provide evidence of income.....obviously they are therefore lending on a Security only basis, and as such, they are far more likely to sell someone up to cover their exposure, as opposed to a responcible lender who makes sure that the applicant can afford the repayments and commitment in the first place.

To state as you have that you do not get all the available options "unless you use a broker" is also misleading. People have the choice to also see other qualified financial advisers such as Accountants or Financial Planners to assist them in their funding choices.

These poeple are more often than not impartial as they are being paid openly and upfront by the client for their qualified advice, and they are often more qualified than a Banker or Broker due to their regulatory requirements to keep up to date with changes to Law and regulations through courses and practicle application.

So, yes options can be offered to people for finance attainment, but maybe it's actually better sometimes to tell people NO, rather than pander to them just to make a sale, then see them again in 6 months when they can't meet the commitments they entered into, or find they have an incorrect product for their needs.

Comments such as.....(I am female, therefore I shop, and I have a car to rice, and Bruce needs the XR8 air induction and and and....) so saving is a bit out of the question for me... the more I earn the more I spend.. Which are in direct conflict with...I want off the rental roundabout and the sooner the better. just enforce my previous rants.

As for Falcoon's comment...I wonder if you even know what premium you paid for the provision of your finance through the Broker as opposed to dealing directly with the lender who gave you the funds....

Or. Am. I. Speaking. Too. Quick. For. You?

[Mondie]

I note you mention a "good" broker works for free. Ummm I don't think so. They have to make their money somehow.  I'm yet to come across a Broker that doesn't want a commission or trail of some sort. While they may not bill the applicant directly, you can be assured there's a payment being paid by the lender to the broker.

l think it was obvious to everyone that SJW meant that their was no charge to the consumer for a brokers services (although they do have the right to charge a fee)

Morgtage brokers are the future of lending, but like everything in life there are good and bad brokers out there. Find yourself a good broker, one who knows about property/tax/structure/investing/trusts etc and you have many more options than dealing direct with a bank. There would be very few serious investors these days that would deal direct with a bank, why would you restrict yourself to a very small portion of all the options and loan products available these days?

l agree with falchoons comment

[SJW]

Mondie,

Absolutely, I know of some shockers who charge fees on top of fees etc.

The concept of a free service and receiving a commission from the lender creates some sceptical comments, but that's the way it works.

If you get a loan direct from the bank, you can also get the same loan from a broker with no difference in the loans at all. The broker will get paid by the lender and the customer wins because through a broker, they have a wider choice.

Bara, I do not argue with you except to say you miss the point about what a broker does and for what cost, hence my reply.

I acknowledge there are bad ones out there as well. I look forward to regulation to clean the bad ones up.