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Author: Bob Lowcock

Top 10 things to ask your lender

One of our Central Coast mobile lenders, Bob Lowcock, answers the 10 questions that Your Mortgage Magazine suggests prospective mortgage holders should ask a potential lender.

Q1. How long will it take for my loan to be approved? Does the lender offer pre-approval to speed matters up?

The Greater can get you a formal approval in a week. It’s a great idea to get a pre-approval before you make an offer on a purchase. It speeds things up by a couple of days because with pre-approval we haven’t sent a valuer out to the property.

For those people refinancing from another bank or financial institution, our Fast Refi service cuts the time it takes to settle an approved refinanced loan to just a few days.

Q2. Can I pay bi-weekly or weekly if I desire? Bi-weekly and weekly repayments reduce the loan faster than a monthly or twice-monthly repayment schedule.

Yes. Paying more and more often is the best way to pay your loan back faster.

Q3. Does the loan offer a line of credit? And don’t forget, not all home equity lines of credit (HELOCs) are created equal. What is the miminum amount I can withdraw? What is the maximum number of withdrawals I can make?

Yes, The Greater offers a line of credit with no withdrawal restrictions. Line of credit loans aren’t as popular an option as they once were. To get easy access to money in a hurry, most people use a redraw facility or offset account nowadays.

Q4. If the loan includes line of credit, how are the withdrawals arranged? Some lenders require a written request each time a withdrawal is required; others, following the initial request, may grant access to funds from a bank machine or online transactions.

You can access a Greater Building Society line of credit loan via branches, ATMs, cheque book, as well as internet, phone and mobile banking. It’s as easy as accessing your everyday account.

Q5. Can I make additional repayments? Are there limits on how many I can make without charge? Again, is this done by phone internet, at the branch – how, when, where?

Yes, you can make extra payments on all our loans – even our fixed rate loans. A prepayment fee may apply to some extra payments on fixed rate loans but it will always be to your benefit to pay as much as you can off your loan. There are no limits on the amount of extra payments you can make. You can make payments at branches, online, over the phone and via mobile banking.

Q6. Does the lender offer personal service? A loan manager you can speak to in person can be an advantage if you have problems or queries.

Yes, we’re proud of our 95.5% customer satisfaction rating. We are a customer owned financial institution so we understand the value of providing personalised face-to-face service. We provide personal service through our branches, over the phone, or we have mobile lending managers who can come to you.

Q7. Does the lender have branch locations? And if so what are the opening hours?

Yes, The Greater has the largest branch network of any Australian building society. We are also open longer hours than most banks - Monday to Friday from 9am to 5pm and on Saturday mornings from 9am to 12 noon.

Q8. Can I access my loan online? Ask whether you can use the internet for additional payments and redraws, and ask how much it will cost you.

Yes, we offer free internet banking and mobile banking – including free, unlimited home loan redraws via internet banking.

Q9. Is the loan portable? Can it be transferred from one property to the next without incurring a hefty fee?

Yes, our loans are fully portable from one property to another for a $300 fee.

Q10. Can I switch from a variable to a fixed interest rate? And what will it cost me?

Yes, you can convert from variable to fixed interest rate for a $250 fee.

If you have a fixed rate loan, another important question to ask is what rate will the loan revert to once the fixed rate period ends? Don’t get caught in the revert rate rort.

What other questions would you want to ask?

Comments

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DavidBryde

Hi again Brian We welcome your scrutiny and feedback. Some non banks have passed on more than we have in the past 12 months but some will still have rates higher than ours. Our profits are modest for our size and necessary if we are to remain financially secure. That allows us to continue serving our customers well and support the community initiatives we're involved in. We'll announce our profits at our AGM at the end of November and publish them online.

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Brian

It's a shame the banks are mainly focused on when it comes to passing on the rate cuts. All institutions deserve scrutiny. There are plenty of "non-banks" who have passed on much more of the rate cut then the Greater - especially over the last year. It would be interesting to see how your profits line up with your argument....

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DavidBryde

Hi Brian Thanks for taking the time to comment on this blog. You raise some important issues. We’re passing on as much of the rate cuts to our customers as we can. The reasons we offer as to why we haven’t passed on more aren’t excuses, they are facts. The RBA’s September meeting media release did state "Australian banks have had no difficulty accessing funding, including on an unsecured basis" but it’s relevant to note that we aren’t a bank and don’t have access to all the funding sources that banks do. The Herald article you mentioned goes on to say... “Trouble is, lower [funding costs] they might be, but they're still higher than what the banks paid three or more years ago. As that old money is re-financed, the banks' average costs of funding must rise, even though at the margin rates are falling.” The most important point for our customers is that The Greater’s rates are still much lower than the major banks. Historically our borrowers have been better off in comparison to bank customers and we expect they will continue to be. (Thanks for noting that we’d left out the comparison rate disclaimer. We’ve since updated it)

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Brian

Aren't you required to display a warning and comparison rate schedule ? Also here's another handy chart* showing that the Greater standard variable rate movement since October 2011 has been less then all the banks listed in your charts. Your failure to pass on the full amount of the reserve banks cash rate cut shows your are fast becoming just like a bank. Your even using the same excuses citing " intense competition and high loan funding cost" despite the reserve bank stating in their last minutes "Australian banks have had no difficulty accessing funding, including on an unsecured basis". *http://www.smh.com.au/money/friend-or-foe-is-your-bank-getting-between-you-and-the-rba-20121013-27jnw.html

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