| FAQ |
| All your questions answered |
 What costs are involved in the purchase of a property? There are a range of costs that may apply. These include statutory fees (stamp duty & registration fees), legal, bank and other disbursements. A "ball park" figure for fees associated with a purchase is in the order of 5% of the purchase price. Contact us for an estimation of the costs associated with your individual situation.
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print FAQ's |
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a printable version of this page is available here more |
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How much deposit do I need? Depending on the purchase price, most lenders will provide a loan to 95% of a property's value for owner occupier purchases and 90% for investment purchases. As well as your contribution to go towards the purchase you also require an additional 5% (approx) of the purchase price to cover the associated costs.
In general you will be required to have genuine saving of your own of at least 3% of the purchase price.
How much can I borrow? Your borrowing capacity is determined by looking at your income and expenditure. When looking at your income a lender will use 100% of your base income in the assessment. Other income such as bonuses and commission are treated differently from lender to lender and may not be fully used in the assessment.
Other factors considered include the number of dependants, the size of credit card limits and other loan payments.
The amount you can borrow will also be determined by the size of your deposit.
Contact us for an assessment of your borrowing capacity. |
What documents do I need to provide to obtain a loan approval? Lenders require evidence of income, rental income, deposit, identity, ownership of existing property as well as repayment history on existing loans and credit cards to assess your loan application.
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check list |
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a complete check list for you to print here more |
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What is the loan application process? There are number of different phases in the loan application process. They can briefly be described as follows:
- Interview and data collection
- Lender/Loan selection and completion of application
- Lender assessment and valuation of property
- Approval
- Preparation of loan offer documents
- Applicant sign up of loan documents
- Lender preparation for settlement
- Settlement
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the process |
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for your convenience, a printable page of this list here more |
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Do I qualify for the First Home Owner Grant? (FHOG) If you are Australian citizens and have not previously owned a property in Australia you could qualify for the FHOG.
How much is the FHOG? The FHOG is $7000. Additionally, if your purchase price is under certain limits you may qualify for a rebate or reduction of stamp duty.
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FHOG |
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for more information see the FHOG government website more |
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How much does it cost to arrange a loan through SMS? Nothing. Our services are free to our clients as we are remunerated by the lenders.
Does dealing through a broker make any difference to the pricing of the product I get? No. The products we source for our clients are the same products that are available should you deal direct with the lender and there is no variation in the pricing. The benefit is that we give you a much wider selection of products and take all the leg work and hassle out of the process.
I have substantial equity in my home and am interested in investing but have no cash. Can I use the equity in my home? Yes. Subject to your ability to service the loan you can use the equity you have built up in your home to raise funds for investment. This can be done using an equity style loan.
What type of loan facility are available? There are a range of loan styles available but broadly they fall into two categories, variable and fixed. The following is a brief description of the products available:
- Introductory - Initial low rate period between 6 and 24 months. Reverts to higher variable rate at the end of introductory period.
- Basic - Basic loans are variable without the frills of standard variable style products. They offer on-going lower interest rates and are suited to customers who are rate sensitive.
- Standard variable - The most commonly used facility. These variable rate loans usually have all the features available such as redraw, offset deposit accounts and the ability to make additional repayments without condition.
- Line of Credit - This is on ongoing source of low cost finance. They offer maximum flexibility and give clients the ability to deposit and withdraw funds up to an agreed limit at any time just by writing a cheque. A Line of Credit is interest only with no principal repayment deadlines.
- Fixed rate home loan - As the name suggests, these loans lock in an interest rate for a specified period of time. Most commonly, this would be three or five years but can be fixed for other terms with 10 years being the maximum. They are ideal for customers who are rate sensitive and are wanting the security of knowing what their loan repayments are going to be for a set period of time.
Fixed rate products offer little flexibility and early repayment penalties may apply if the loan is paid out early. The loans also have a maximum amount of additional principal that can be paid per annum. This can vary between $5000 and $15,000 per annum.
- Fixed rate, interest in advance - These are available for customers who are looking to maximise their tax position. Clients are able to pay interest in advance for the next financial year and claim the tax deduction in the current financial year. These are for investment purposes only.
- Bridging loans - These are generally for use by people who have substantial equity in the existing home and are purchasing their new home before selling their current home. These days they are available at standard rates.
- Low Doc loans - Low doc loans are available for both self employed and PAYG applicants who are not able to fully evidence their income. Applicants are not required to provide the normal evidence of income, instead a declaration of affordability is usually all that is required. These facilities usually carry a higher interest rate and require the applicants to contribute at least 20% of the purchase price.
- Credit Impaired loans - Over recent years there have been a number of niche lenders who have established themselves in the market offering loans to people who have had a history of defaults or judgements. They provide facilities to applicants who may otherwise have been unable to source finance. The products are priced based on the credit history and can be significantly more expensive than standard loans.
- Professional packages - For a number of years some lenders have attempted to attract premium business by offering professionals discounted loan packages. Over the last couple of years this has changed for most lenders and they now base their professional packages on the loan size. Discounted packages currently see interest rate reductions in variable rates of up to 0.7%. Additional benefits such as fee discounts on credit cards and transactional accounts are also available. An annual fee is payable on most packages.
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