1. Are your service free?
Banks pay us by for introducing loan applications and for doing some work that would otherwise be completed by one of their staff. As a result we do not need to charge a fee for most loans. The lenders will not charge you a higher interest rate via a mortgage broker. In fact, we can usually negotiate a competitive discount rate for larger loans.
It is unlikely that we will charge any fees if
– Your loan is over $200,000,
– Your situation is not complex, and
– You are keeping the loan for over two years.
2.Why should I use a mortgage broker if I can go with a bank? Why should you choose from one when you can choose from many banks?
We work with a variety of lenders and can find the cheapest and best loan product available to suit your needs.
Free choice: Is your bank going to tell you if another bank is cheaper? Are they going to tell you if another lender’s products suit your needs better?
Free services: Most of our clients pay nothing for our services.
High service level: Did you know that mortgage brokers consistently outrank bank managers in customer satisfaction surveys?
Simple: We will take the difficulty out of applying for a loan. We’ll deal with the banks so that you don’t have to!
Expert: Our mortgage brokers have a much higher level of training and experience than bank lenders.
Specialized lending: Your bank cannot go outside of their lending policy but we can choose a lender that can approve your loan!
Periodic reviews: Did you know that the banks can change your rates after your loan is advanced? We will check to make sure that your loan is still competitive.
Many people approach their bank directly and either get their application declined or miss out on a more competitive discount. Don’t make the same mistake! Speak to a mortgage broker who will offer you more than just your bank’s own products.
3.What is a Comparison Rate?
A Comparison Rate reflects some of the costs of a loan into a single interest rate. The aim of the Comparison Rate is to help you make a more informed decision on the costs associated with a loan, and help you to compare various loans and services offered by financial institutions and mortgage providers. The formula for calculating a comparison rate is regulated by the Consumer Credit Code, and all Australian financial institutions and mortgage providers use this same formula.
4.What is the difference between a ‘Principal and Interest’ Home Loan and an Interest-only Home Loan?
A Principal and Interest Home Loan is where the principal repayment and the interest are repaid together throughout a loan’s term. Whereas an ‘interest only’ loan allows you to pay only the interest on the loan for a certain period of time.
5.What is a Self employed loan?
A Self employed loan has simplified paperwork and is designed for self employed applicants, who may have difficulty providing up-to-date financials to prove their income. If you are self-employed and apply for a loan, all you need to support your application is a signed Borrowers’ Declaration stating your income and the ability to make your repayments. Subject to meeting our lending criteria, there’s no need to supply financial statements or tax returns.
6.What is the Lenders Mortgage Insurance?
Lenders Mortgage Insurance (LMI) is insurance that protects the lender in the event the security property is sold and the funds from the proceeds are not enough to discharge the loan. The LMI then pays the Lender the shortfall .The rights to recover the shortfall from all of the parties on the loan ( borrowers) are then transferred across to the LMI who will pursue the shortfall.
The cost of LMI insurance is a one of payment at the start of the loan and is usually added to the loan amount and should not be confused with income protection insurance.
7.What are Genuine Savings?
Not all cash deposits are acceptable in applying for a home loan.
These days you can obtain a home loan with as little as a 5% deposit. That means a bank can lend you up to 95% of the purchase price.
If you are considering applying for a home loan with a deposit that is less than 20% of the purchase price then here are some of the things that you need to know. At least 5% of your deposit needs to be made up of genuine savings.
1. What exactly are genuine savings?
These are savings that are held or accumulated in a savings account for at least three months.
2. What other assets might be considered as genuine savings?
Other assets that can be considered as genuine savings are term deposits, shares, and equity in property that are held for at least three months.
If you have any debts, e.g. a personal loan, and you have been paying extra off your debt above the minimum requirement, you can use this extra repayment towards your genuine savings calculation.
If you are currently renting for 12 months or more through a Real Estate agent, you may be able to use those rent payments towards your genuine savings calculation as well. Please contact us to discuss your personal circumstances to see if you qualify.
3. What does not qualify as genuine savings?
Gifts from parents
Cash kept at home
We recommend that you place those funds into a personal savings account and hold them there for three months to qualify.
4. How much do I need for a home loan deposit?
You can obtain a home loan with as little as a 5% deposit. The major lenders may provide a mortgage up to 95% of the value of the property.
5. Can I buy a property if I don’t have genuine savings?
We have access to lenders where you can borrow up to 95% of the purchase price without having genuine savings. Of course you still need to come up with at least a 5% deposit plus funds to complete (stamp duty, legal costs etc).
8.How much stamp duty will I have to pay?
Depending on your circumstances and where your property is located, you may have to pay government fees in the form of stamp duty. Stamp duty payments are based on the value of the property you purchase. Check your state government’s revenue office website to work out how much you may have to pay in stamp duty. Or go to here