Where do I find a good commercial finance broker ?

 

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Today Simon Bowler from Smartline Personal Mortgage Advisers gave a presentation to his fellow Metro Networking Group members with excellent advice on Commercial and Home Loan finance.

 

What experience can Simon offer you?

 

  • Many years of experience in finance, not just home loans.
  • Worked at CBA in business banking in Sydney and Adelaide
  • Had my own furniture business.
  • Understand the high and lows of running a business.
  • Understand the importance of customer service

Commercial Properties loans

 

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General information

From 60 to 70% LVR. Few lenders will go to 75% LVR.

What is LVR? This is the percentage of the total value of the propoerty, and what  the banks will loan you.

Medico’s can get up to 90% to 100% LVR.

Top 4 banks offer 15 year loan terms with 2 to 5 years interest only

Other lenders offer 20, 25 and 30 year loan terms

Rates interest with most top 4 banks is risked assessed, which will determine the final interest rate.

Some lenders just offer rates, (like home loan rates are advertised) ING, Adelaide bank, Suncorp. etc

Fees; app 0.8 to 0.5% of the loan amount, valuation paid by clients, monthly loan fee,

Some lenders have no on going fees, and smaller app fees etc.

 

Commercial loans over loan terms.

Some examples.based on todays interest rates

 

15 year loan terms

  • $500k commercial loan (Bank)
  • Principal and interest payments.
  • Interest rate 5.5%
  • Monthly loan fee $20.00
  • Monthly payment $4,085.00

20 year loan terms

  • $500k Commercial loan
  • Principal and interest.
  • Interest rate 5.5 %
  • No monthly loan fee.
  • Monthly payment $3,439.00
  • Estimated saving $646.00 P/M
  • Plus the monthly loan fee.

 

Having a great broker on your side

 

Understand business finance.

Knows how to tailor a deal with lenders with minimum disruption to you

Deals with the Banks policies and questions they can ask.

Spends the time to understand your current and future lending needs to work on the best options.

Brokers are mobile.

Brokers work around the client life style to arrange face to face meetings – day or night.

Brokers offer choice of over 25 lenders and 100’s of products to choose from.

Banks can only sell their own products that may not suit the client.

Brokers do all the running around to find the best option for your loan.

Brokers liaise with the real estate agent and conveyancers etc. while the customer carries on with their life.

 

Why should I review my home loan?

 

  • Changes of life cycle.
  • Considering building your asset wealth.
  • Quickest ways to re-pay the home loan.
  • New loan types that may suit your current situations.
  • Restructure loans to suit tax and personal budgets.
  • No cost or fee to customers to review current lending.

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Urban myth’s

 

Offset accounts compared to basic home loans

With an offset account you need to ask yourself the following questions

I want an offset account: Why ?

Your answer might be. Because Everyone has one.

OK that’s possible.

Do you know how offset accounts work?  Your answer  Yes ish.

How much do you have in your offset account over a period of a month?? $XX

 

Scenario

In offset account on an average month you have “say”$4K sitting in the account.

Loan $350K x 30 year loan term and interest rate 5%. Monthly payment $1,879.00

In offset account on an average month you have “say”$4K sitting in the account.

Loan $350K x 30 year loan term and interest rate 5%.

You reduce the loan term by 8 months and save around $13K of interest.

 

What about the basic home  loan ?

No offset account.

Loan $350K x 30 year loan term and interest rate 5%. Monthly payment $1,879.00 and you increase your payments by $50.00 a week or $200.00 per month. To new payment of $2,079.00

If interest rate do not move for the next 30 years you will reduce your loan by 5.8 years and roughly save $71K in interest.

Simple and great way for people who are not very good with their money.

 

Home loans versus Investment loans

 

Home Loans

Lower interest rate.

Most lenders offer higher LVR.

Over 90% LVR or 95% LVR including (LMI).

Investment loans

Slightly higher interest rate to home loans

Some lenders will only go to 80% LVR or few will do a max 90% LVR.

Government and banks are moving policy on investment loan. Main reason due to high exposure to the eastern states investment market.

If you would like a broker who can offer you great service and knowledge contact Simon

Scan 18 Aug 2016, 9.50 AM

http://www.smartline.com.au/sbowler

 

 

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