Frequently asked questions
You may be wondering…..
Q. Can I get approval for a home loan before I have found a property I wish to purchase?
Answer: Absolutely! In fact by obtaining a pre-approval before finding a property it can save time as the lender has already pre-qualified you and will just need to do a valuation on the property you have decided to purchase. It also gives you the assurance of knowing you have been approved for a home loan as well as knowing how much you can afford to spend on a home of you own.
Q. How much deposit do I need for a loan?
Answer: Due to recent the economic climate the lenders had tightened up on their lending policies however they are starting to relax somewhat and want your business! Most lenders now require a minimum 5% deposit to be paid, being made up of genuine savings over a three to six month period. Some lenders allow you to use the rent you have been paying over the past year in lieu of genuine savings however you’ll need to discuss this with me as conditions do apply in this situation.
Q. How many lenders can I choose from?
Answer: We currently can offer approximately 15 lenders on our panel to choose from depending on your personal circumstances. These lenders are made up of a mix of major lenders and non-bank lenders. With such a large range of lenders available most times we are able to find a lender to assist you with your situation as long as you have the ability to repay a loan.
Q. What does a lender look for when deciding whether to approve a loan or not?
Answer: Lenders look at how strong an applicant you are, assessing things such as your employment history, income and also your residential history over the past three years. In addition they assess your credit worthiness by carrying out a credit check, look at how many credit facilities you have, what your past repayment history is like, your level of debt and your affordability. If you are paying rent they like to see the past 3-6 months rental history as well. They also look at the location and condition of the property you own or are purchasing, most times carrying out a valuation to estimate the property’s value and ensuring it is in a good condition and is readily re-saleable.
Q. What fees are involved in applying for a home loan?
Answer: Fees that need to be considered include an Application, or Establishment fee, which is approx $600, government legal fees which can add up to approx $400 for registration of your mortgage and search fees. Lenders Mortgage Insurance is payable if you borrow more than 80% of the value of the property being used as security. This is paid at the beginning of your loan and covers the lender in the case of you defaulting. Depending on the lender chosen, you may have to pay the lender’s legal fees to prepare the mortgage documents as well as a valuation fee. It’s best to check at your interview to which fees would apply to you.
Q. Do these fees come out of my loan?
Answer: Any fees associated with the loan can come out of the loan on settlement however other payments due such as Stamp Duty are payable prior to settlement so it’s best to go through the funds required with us to ensure you have sufficient funds available
Q. Are you able to advise me on which loan will suit me if I want to pay off my loan quicker?
Answer: Yes, we certainly can! There are literally hundreds of products available that have different features and benefits. A variable rate in particular is best if you are wanting to pay your loan off quicker as there is no restriction on how much extra you can pay off in addition to the minimum repayment required. Discuss this with us if you’d like to explore this further.
Q. Is it a good idea to fix my loan rate at the moment or stay with variable?
Answer: This is a very debatable topic at the moment as some people feel rates will drop whilst others think they will increase! The main thing is to think about why you would want to take a fixed rate. If it’s to protect yourself from any future interest rate changes, which also locks your repayment helping with your budgeting, then locking now would be a great idea. Fixed Rates are currently at a historically average rate, so it’s a good time to consider your options. Bear in mind a fixed rate locks you into your home loan for that period of time. It may cost you to break the fixed rate term if your circumstances change and you need to discharge your loan.
Q. How long will it take to find out if I am successful in my loan application?
Answer: We aim to have your finance approved as soon as possible, usually within 5 business days. However this can sometimes take longer as it depends on your circumstances.