Frequently asked questions.
FAQ's
Frequently asked questions.
That’s the best part, our service to you is paid by the lender. The lender pays us a fee after settlement and an additional trailing commission to ensure we provide an ongoing service and continue to assist you so that you don’t need to deal directly with the bank.
Its great you’ve made this decision! The best thing to do would be to reach out so we can discuss if you have a property in mind are starting to look or want a better understanding of the process. The first thing we would want to do is look to establish your current borrowing capacity to help you buy the right property for you.
The standard process for buying in NSW is to get an understanding of your borrowing capacity to know how much you can borrow and are comfortable spending up to. Then the hunt begins for a suitable property once found the process varies if its up for Normal sale (Private Treaty) or Auction.
The two primary methods for buying property in NSW are Normal Sale usually advertised as a set price or a price range. or an Auction.
Normal Sale – Typically you find a suitable property that suits your needs. You then proceed by submitting an offer in writing to the listing agent. The offer outlines the price you are prepared to pay as well as the terms of the contract. When an offer is accepted standard terms are typically a payment of 0.25% of the agreed price as a deposit with a cooling off period given to the purchasers usually between 5 – 10 business days for the purchaser and 42 days (6 Weeks) until settlement(Key/money Handover). The cooling off period is only given to the purchaser ( The vendor can not pull out once contracts have exchanged) and this is time for the purchaser to complete a strata report of a strata property, Pest and building report to assess the structure and condition of the property, sufficient time for these documents to be reviewed by yourself and your conveyancer/solicitor and finalize your formal loan approval in writing from the lender. Providing you the purchaser are satisfied with the outcomes of these reports the cooling off period expires with you paying a 10% deposit sometimes 5% if agreed in the terms or sometimes a deposit bond (a certificate to support the deposit being paid at settlement) should you be dissatisfied you are able to request a reduction in the sale price through the agent or legal representative or rescind(cancel) the contract forfeiting the 0.25% deposit. Providing you proceed by paying the agreed deposit this is when the Sold sticker goes up and is usually 4 weeks roughly from this point until settlement (Key/Money Hand over).
Auction – An auction occurs when the vendor has elected to run an auction campaign. An auction may or may not have a price guide advertised (We can help by providing a property report of nearby sales and desktop valuation) the typical campaign goes for 4 weeks with the last day of the auction campaign being the auction date. The auction date is the date chosen to have the auction. Unlike Normal sale Auctions do not have a cooling off period and unless agreed prior to the auction should you be the successful bidder subject to the vendor reserve it is a contractual requirement to pay 10% on the day. Given this it is strongly advised that prior to bidding you have coordinated your finance, requested and reviewed the contract of sale and completed a review of any Strata reports and Pest and Building reports so that you can bid with confidence.
It is a certificate issued by the lender to the potential purchaser stating the loan amount they would be prepared to lend you under your current circumstances based upon the documentation you’ve submitted subject to valuation of the property you intend to purchase.
Depending on the lender and your circumstances some lenders will consider as little deposit of 5% + LMI (Lenders mortgage Insurance) some even less if you meet the current government grants available or have access to a family remember prepared to act as a guarantor for your application. Don’t write yourself off some lenders consider rental payments as genuine savings and accept gift deposits too.
Variable – A floating interest rate which fluctuates up down or remains the same depending on market loan market conditions. Benefits often include being able to make infinite additional repayments, discharge the loan without penalty and offset interest through redraw and offset accounts where applicable.
Fixed – A fixed facility usually 1, 2 , 3 or 5 years is where your interest rate is fixed at an agreed amount for the duration of the fixed term. Benefits include certainty around repayment amounts. Possible disadvantages include penalty for discharging early, additional repayments only up to a limited amount. Offset accounts only up to a limited amount also. These do vary between lenders which is why we make your options clear to you at the application stage.
Some lenders consider rental payments as a form of genuine savings, others consider gift money inheritances, proceeds of asset sales (such as shares or property). There are also family pledges or family guarantors who can assist. There are plenty of different options with different lenders it important we consider the right fit and outcome for you.
Most loan products and lenders have a redraw facility available. This is for any monies that have been made in addition to your minimum monthly repayment can be redrawn or drawn upon for spending.
An offset facility is a separate account which is attached to your loan. Any money in the account will offset the relative interest amount on your loan. Lenders do vary some offset at 100% while others less and some product don’t have offset accounts at all so its important we consider this with your application.
This is often the primary question with most loan application. Most lenders have different pricing based on your LVR ( loan to value ratio) This means if you a borrowing 90% of the property value you are almost certain paying a higher rate than if you were only borrowing 70% this correlates with the risk to reward benefit to the lender. Although getting a lower rate may increase your borrowing capacity across other lending facilities as now your overall assessed loan rate and repayments are lower. This is why as the broker its critical we are clear on your best outcomes to maximize the return to you in this space.
Most approvals last 90 days but terms and conditions do vary between lenders and borrowers circumstances.
Lenders are offering a rebate/cashback if you refinance your home loan to them. Some of these cashbacks are as high as $4,000 per property security. These cash backs are also often paid at or shortly after settlement making the funds easily available.
This is a personal question for each potential borrower and one that should be discussed and reviewed. There are advantages or disadvantages to both outcomes. If you can afford to keep what you have and buy what you want then often it can be a great decision although if holding your existing home comes at the cost of having to settle and not get your ideal property this is something you must feel comfortable with. We’ve helped countless people navigate this space and with right factors considered we’re confident you’ll also make the right decision for you.
There are a couple of ways we can look to complete this option:
– A bridging loan where you’re given 6 months – 12 months depending on the lender to sell your existing property.
– An investment loan for the purchase/or changing your existing home to a rental and buying another home to live in.
These are the two primary methods we would assess and see what suits you best.
A debt consolidation is a great way to look to reduce monthly commitments and get back on top of your cash flow. In this scenario we are likely to refinance to another lender increasing your loan amount to discharge the arrears and current mortgage and make the whole process more manageable.
A guarantor/family pledge is where a family member provides a limited guarantee usually for the 20% deposit so that the borrower isn’t required to pay lenders mortgage insurance. This will often mitigate the requirement for substantial savings and reduce repayments and we are able to release the guarantor once there is adequate equity in the property.
A switch in security is where you keep your existing loan and facility, and the security (Current mortgaged property) is changed to a different property. The timing of these transactions are critical to ensure you’re able to still move without triggering a reassessment. If this is something that interests, you reach out so we can go through all the variables in depth.
Instead of having a single mortgage for the property we are able to split the borrowed amount into separate facilities. This could be where we have taken out a second tax deductible loan to buy an investment property or split our home loan mortgage into a fixed portion and a variable portion to take advantage of both loan products. Loans can be split multiple times and we ensure we are getting the right structure for you.
A debt consolidation is a great way to look to reduce monthly commitments and get back on top of your cash flow. In this scenario we are likely top up your existing mortgage or look to refinance out and take advantage of some of the cashback offers that are available.
A debt consolidation is a great way to look to reduce monthly commitments and get back on top of your cash flow. In this scenario we are likely to refinance to another lender increasing your loan amount to discharge the ATO debt and current mortgage and make the whole process more manageable.
An exit strategy is a proposal to the bank for borrowers whose loan term will fall within the eligible retirement age. The exit strategy will outline to the lender how you intend to make repayments should you choose to retire within the loan term. The strategy is important so that you have a plan in place to make the right lifestyle choices for you.
LVR (Loan to value Ratio) is the calculation of the loan size relative to the equity or deposit you are contributing. for example if you have a 10% deposit the LVR would be 90% as you are contributing 10% and the lender 90%.
LMI (Lenders mortgage insurance) is an insurance policy that the lender takes out for the borrower in most cases if they have less than 20% deposit. It is an insurance policy for the bank to mitigate their risk should you default on your commitment. The policy allows them to have the ability to make a claim from the insurer for certain loses and the difference between the 80% and your assessed LVR.
A significant number of lenders understand if you’re in a probation period or recently changed job most times if your time the same industry with a similar role this fine. If you’ve started in a new industry this is also ok though lender options will be fewer and something we are more than happy to discuss with you.
It sure is. Most lenders love casual workers and this shouldn’t be a drawback in getting you an approval.
Providing you’re in the same industry most lenders will still consider your application if you’ve been within the same industry for over 24 months some lenders may consider less than this. It well worth the discussion of looking at your options.