Some of your important questions answered…
The finance world is often quite complex. My job is to make things easy so you can make the right decisions for your circumstances.
Of course, we are always on the other end of a phone to give you the information, clarity and a step by step description of everything you need to know at EVERY stage of the application process, but for now however you may find at least some of the answers to questions you may have below.
Do I need a deposit to get a loan for a home and if so how much?
Every lender / bank has different requirements and policies but predominately you will need a minimum 6% deposit. If you can do a family guarantee, a deposit is not required but it’s always good to have some savings. One lender we have access to requires only a 3% deposit but their lending requirements vary.
Am I better off going straight to my bank?
Your bank may lend you the money to purchase your new home, but they won’t tell you if another bank has a better deal. As I stated before every bank has a different lending policy which you have to fit.
What does a mortgage broker do?
My job is to get you a home loan that suits you. I work with you to find out what you are looking for in a loan, explaining the various options available and talking you through the whole process. I make it as easy and stress free as possible.
What are your fees?
I get paid by the lenders for your loan, there is no cost to you for my fees. They do not charge or penalise you at all.
Am I entitled to the first home buyers grant and where do I get this from?
I can help you with the first home buyers grant and a call to the office of state revenue may be necessary depending on your situation.
What is Lenders Mortgage Insurance, do I have to pay it and how much is it?
LMI (Lenders Mortgage Insurance) is a one off fee that you pay if you don’t have a 20% deposit. You can add this to the loan, every situation is different though. The fee varies from lender to lender and the cost will depend on how much deposit you have. LMI can also be avoided if there is a family guarantee.
Do I need a pre-approval before I put in an offer for a property?
Not usually but everyone is different. Meet with us to go through what you are looking for and we will advise if you need one or not.
In some cases where there are a few offers for a seller to consider, having pre-approval may be more attractive than another offer that doesn’t.
In some cases where there are a few offers for a seller to consider, having pre-approval may be more attractive than another offer that there is no pre-approval.
How long does the whole process take?
Once your offer has been accepted, you usually have 21 or 28 days for finance then 21 or 28 days for settlement. These times vary depending on how long a bank is taking to review your file which can be anywhere between 48hrs and 3 weeks depending on the lender. You will be required to provide some paperwork which will also contribute to the length of the process.
What are redraw and offset accounts; do I need them?
Redraw is when you have paid extra into your variable rate home loan and you wish to take that money back out. An offset account is a separate bank account that you use as a transaction or savings account, whatever money you have in this account will offset against the interest in your mortgage making your interest less for the time it’s in the account. This is mainly for variable rate home loans as predominantly you cannot offset 100% on a fixed rate loan. Everybody’s financial situation is different, for some people it’s a must and others it’s not really viable. Your mortgage broker will / should speak to you about these and other features of home loans.
My friends have an investment property and they didn’t have a deposit, how did they do this?
If you have enough equity in your current home you can use your home to purchase another property. You don’t have to put any money down but you must have enough equity. It’s best to have a meeting with a broker and they can go through your current situation to see if this is possible for you.
I didn’t pay stamp duty on my first house, do I need to pay it this time?
If you are buying an investment property you will have to pay stamp duty even if this is your first house you are buying. You only have a concession on stamp duty if it’s your first house. (Conditions apply depending on values)
Do I have to stay with the same lender/bank I’m with now or can we look to see if there is a better deal out there?
If Lenders Mortgage Insurance is involved it may be inadvisable in some cases to move to a different lender if you already have a home loan. Every situation is different so we would review it with you. We can always try and negotiate a better rate with your current lender as an alternative.
I’ve heard people mention negative gearing on investment properties, what is this and can I do it?
Can I only pay the interest on my investment property?
Currently you can just pay the interest on your investment property, but investment loan interest rates are higher at the moment and generally if its interest only they are higher again. It’s always good to pay down any loan including investment properties, but speak to your accountant first on this as well. We can structure the loan to best suit your current life style and goals.
I want to build an investment portfolio, I have my own home and one investment, can I use the equity in these properties as security?
As long as there is enough equity we can use them, valuations will determine their value and you can always put in some extra cash if you have some.
I want to build an investment portfolio as my retirement fund, should I purchase these investment properties in my superannuation fund or a trust.
Everybody’s situation is different, we cannot advise on this though, you would have to speak to your accountant and or financial planner. We can structure the loan based on their recommendations.
My current properties are just in my name, but now I want to purchase this investment with someone else, can we do that?
If you are using cash to purchase it then yes of course, if you are using property with a debt on it, it becomes a little more complicated. If the person is your defacto partner then yes but not all lenders will accept this. So definitely speak with a mortgage broker on this. You could always take cash out of an existing mortgage / property as long as there is enough equity in there of course, and doing a valuation will determine this.
Should I use the same bank to purchase all my properties?
Everyone’s situation is different and in some instances it’s better to stay with the same lender, but you know the saying…don’t keep all your eggs in one basket.
Speak to your broker about your future plans and you can work together to achieve your goals & dreams.
If I decide to go to a different lender what are the costs for me to move?
You would need to ask your current lender as it will depend on what type of loan you have. Refinancing a fixed rate loan could be extremely costly, but a variable loan is generally just a discharge fee. Every lenders fees vary but generally $350 admin, $165 to discharge a mortgage and $165 to register a mortgage (government fees). We usually advise approximately $700 for one property.
