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Best way to refinance
Topic Started: 20 Dec 2016, 07:54 AM (2,489 Views)
Fisho74
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Hi just wondering how most people go about refinancing? Use a broker or just go into a bank? Mortgage house are offering 3.9% on investment loan. Westpac are currently slugging us with 4.6%.
Any feedback appreciated!
Edited by Fisho74, 20 Dec 2016, 07:56 AM.
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Jimbo
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Fisho74
20 Dec 2016, 07:54 AM
Hi just wondering how most people go about refinancing? Use a broker or just go into a bank? Mortgage house are offering 3.9% on investment loan. Westpac are currently slugging us with 4.6%.
Any feedback appreciated!
Simple advice is to not be sucked in simply by the rate on offer. You are buying a whole package and there are many variables to consider.

You might be better off in the long run sticking with the 4.6% you are currently paying if the other deal has some unfavourable clauses.

The bottom line is how much will it cost you over the life of the loan, how much will it cost you if your circumstances change?

Read every word, don't sign unless you understand every word.

It's bloody minefield.



Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Nathan800
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I've done it twice with my current house, can gone directly to the bank both times.

Finder.com.au is pretty good in terms of explaining the pros and cons and fees, etc.
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Rufus
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Fisho74
20 Dec 2016, 07:54 AM
Hi just wondering how most people go about refinancing? Use a broker or just go into a bank? Mortgage house are offering 3.9% on investment loan. Westpac are currently slugging us with 4.6%.
Any feedback appreciated!
Whatever you choose to do, don't make multiple online applications, it will damage your credit score, and most lenders credit score. That means they won't even look at your application if you have too many recent enquiries - IE three or more. It's a lazy way of assessing loans.

If you have already made that mistake - one bank that doesn't credit score is Macquarie Bank, although they do check your credit file.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Rastus2
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Fisho74
20 Dec 2016, 07:54 AM
Hi just wondering how most people go about refinancing? Use a broker or just go into a bank? Mortgage house are offering 3.9% on investment loan. Westpac are currently slugging us with 4.6%.
Any feedback appreciated!
Adelaide bank were also pretty pathetic when we wanted to refinance... not much loyalty compared to the packages being offered by others.

Rufus had good advice, even if it does not make you look desperate and impact your ability to borrow, every application you start (even online) triggers a whole bunch of phone calls from the team... I filled out some details online as a general inquiry and had phone calls from the guys there for weeks. ... there are many, many good comparison websites, although some are clearly "select" in the range of lenders they compare with.

If a comparison website asks for any contact details prior to doing the search, find another comparison site.

We used Canstar, but steered away from those who magically only threw up 4 or 5 lenders on our searches.


Have to say, 3.9 is not a bad IP loan, assuming there are no ongoing costs... I notice yours has a (small) $10 monthly fee, and a $200 settlement fee ... quite common, although you can find loans without that monthly fee also.


Monthly Fee
$10

Package Fee
No package fee

Rate Lock Fee
No rate lock fee

Application Fee
No application fee

Valuation Fee
No valuation fee

Settlement Fee
$200

Discharge Fee
$450

Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Bardon
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I use a broker.
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Rufus
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Bardon
20 Dec 2016, 08:35 PM
I use a broker.
If your car breaks down you can buy a self help book and check on YouTube to see how others have fixed the fault, or you can go to a mechanic and get it fixed properly.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Rastus2
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Rufus
21 Dec 2016, 10:39 AM
If your car breaks down you can buy a self help book and check on YouTube to see how others have fixed the fault, or you can go to a mechanic and get it fixed properly.
Just make sure you use a mechanic who has the broadest range of parts and does not limit your choice, or get incentives by selecting a particular manufacturer, or, equally important, not offering a particular manufacturer, because they don't off the "right" incentive.

We talked to the Aussie Home loans broker, who told us the frequency that CBA products were sold through their company... now I wonder why that would be ;)
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Rufus
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Rastus2
21 Dec 2016, 11:52 AM
Just make sure you use a mechanic who has the broadest range of parts and does not limit your choice, or get incentives by selecting a particular manufacturer, or, equally important, not offering a particular manufacturer, because they don't off the "right" incentive.

We talked to the Aussie Home loans broker, who told us the frequency that CBA products were sold through their company... now I wonder why that would be ;)
The various banks all offer almost identical commission structures. I haven't heard of any broker choosing the commission rather than a suitable product, but I'm sure many will argue otherwise.

There have been studies done showing that the banks who got the most work from brokers aren't the ones offering the highest commission, but they are prepared for ASIC and aren't released to the media.

Some of the major considerations are:-

Interest rate
Features such as an offset account, construction, variable, fixed etc
Processing speed of the bank (important when purchasing)
Requirements of the bank to gain approval matching what the information that a borrower can provide.

Is it for construction, or purchasing existing, or refinancing
credit history
Is FHOG applicable
Unit or house
New or old
LVR
LMI cost
Ongoing fees
Borrowers preference
Lenders policy
any other relevant factors pertaining to that particular request.

No one in the industry has a very high opinion of Aussie Home loans, they are at the bottom of the barrel, but the CBA write a large % of home loans in Australia, Aussie would refer a high percentage of applications to the CBA regardless of any internal directions. Don't quote me but I'm sure the CBA write over 20% of all home loan deals.

Brokers are expected to provide the most suitable home loan, not the cheapest, and there are good reasons for that. The cheapest may not be a suitable product, or it may be unavailable for the purpose required, or there may be other factors involved peculiar to that transaction.

First time buyers look for the cheapest rate, experienced buyers look for a good rate but they also want features that save them time and money, and they are usually more prepared to pay higher fees to achieve that. Everyone's preference is different.


Edited by Rufus, 21 Dec 2016, 12:16 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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zaph
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I don't think a broker is essential for a 'model' borrower.

However, if there's anything slightly out of the white picket fence then they're probably useful...
Dodgy credit history.
Deposit issues.
Multiple loans trying to squeeze every last drop of credit out of the system.
A bad hair cut.
Not employed for long.
Contractor.
Self employed.
The list is endless.

Are there lenders that don't deal with brokers at all?

They appear to be very well paid and I'm not sure why lenders support that?
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