Frequently Asked Questions (FAQ)
1.Why is it better to use a mortgage broker?
Using a mortgage broker in Australia can streamline the mortgage process, offer access to a wider range of lenders and products, provide expert guidance, and potentially save you money. Their expertise and industry connections can be valuable assets when navigating the Australian mortgage landscape. Researching and comparing mortgage options can indeed be a time-consuming and intricate task. Mortgage brokers step in to alleviate much of this burden, taking on various essential responsibilities such as paperwork, communication with lenders, and the submission of mortgage applications. This not only spares you valuable time but also streamlines the entire process, making it more straightforward and manageable.
Does it cost more to use a broker?
It doesn’t cost you anything to use a Mortgage Broker. We are paid by the lenders so the majority of our services are free of charge. The potential long-term savings they can help you achieve through favourable mortgage terms and interest rates. Overall, using a Mortgage Broker can be a cost-effective way to find the right mortgage product, as their expertise can help you navigate the mortgage market and potentially secure a better deal.
How many lenders do you compare?
Loans and Mortgages are accredited with over 30 of Australia’s leading lenders The specific number of lenders a broker compares may depend on various factors, including the broker’s expertise, the client’s financial situation, and the complexity of the mortgage requirements.
What areas do you service?
Loans and Mortgages services in Australia. It’s great to know that you offer remote assistance for clients across the country and also offer the option for face-to-face meetings in specific areas like the Sydney Metropolitan, Northern Beaches, Hills District, South West Sydney and Western Suburbs. This flexibility in service delivery can accommodate various client preferences and needs.
How to Schedule a Meeting outside business hours?
Loans and Mortgages regarding their availability for meetings outside of regular business hours. Mortgage Broker understands the need for flexibility and may offer appointments during evenings or weekends to accommodate clients’ schedules. Meetings can be conducted remotely via phone or video.
Who uses Mortgage Broking services in Australia?
mortgage broking services in Australia cater to a wide array of clients, including mortgage broking services in Australia cater to a wide array of clients, including homebuyers, investors, self-employed individuals, and businesses, who seek expert guidance and assistance in securing mortgage financing tailored to their unique financial situations and objectives
What is the lowest home loan interest rate?
Interest rates for home loans can fluctuate frequently due to various factors, including changes in the economy, monetary policy, and the lending practices of financial institutions. To find the current lowest home loan interest rates in Australia consulting with a mortgage broker who can provide you with the most up-to-date information and help you find the best home loan rate for your specific needs and circumstances
How do I apply for a home loan in Australia?
Brokers will start by discussing your current financial situation and understanding your specific needs and preferences for a loan. They will then provide advice on the best loan options available to you. Once you’ve chosen a loan and a lender, your brokers will handle the application process on your behalf. They will inform you about the necessary documentation you need to provide and explain all the terms and conditions associated with the loan. Your brokers will structure your application to maximize your chances of approval and will act as intermediaries with the lender, keeping you informed about the progress of your application throughout the process. Upon approval, they will manage all the final settlement requirements, ensuring a smooth and efficient loan process for you.
What is the First Home Owners Grant
The First Home Owners Grant (FHOG) is a government incentive program in Australia that provides financial assistance to eligible first-time homebuyers. It is designed to help individuals and families purchase their first residential property by offering a one-time grant or financial contribution. The grant’s availability, eligibility criteria, and grant amount can vary between Australian states and territories, as it is administered at the state or territory level. First Home Buyers Assistance Scheme which provides exemptions or concessions on transfer duty (Stamp Duty).First Home Buyer Choice which allows you to choose between upfront stamp duty or annual property tax.
What other costs are involved in Australia apart from the cost of the property
there are several other costs that you should consider. These additional costs can significantly impact your budget, so it’s essential to be aware of them when planning your property purchase. Stamp Duty, Lenders Mortgage Insurance, Legal / Conveyancing fees, Pest & Building Inspections, Land Title Registration, Building & Contents Insurance, Utilities, Council Rates. Some of these costs can be included in your loan amount
What is Lenders Mortgage Insurance
Lenders Mortgage Insurance (LMI) in Australia is a financial product designed to protect lenders (such as banks and mortgage providers) is a fee paid where you borrow more than 80% of the property value. All loans are secured against the property itself incase you default on your loan however if property values decrease and the value of your home is less than the amount you owe, the lender will use this insurance to make up the balance.
What are the tax benefits of an investment property
Investing in property in Australia can provide several tax benefits for property investors. However, it’s important to note that tax rules and regulations can change, so it’s advisable to consult with a tax professional or accountant for the most up-to-date and tailored advice.
The following expenses can normally be claimed on tax for your investment property:
- Real Estate advertising for tenants
- Property management fees
- Accounting fees
- Borrowing costs ie: loan establishment & registrations fees as well as valuation fees
- Interest payments and ongoing loan fees
- Stationery, phone costs, book keeping fees
- Travel relating to the property
- Council rates, body corporate fees, land tax and strata fees
- Property maintenance & repairs
- Insurance premiums
- Pest control, cleaning and gardening
- Utilities that are paid by you ie: electricity, gas and water
- Depreciation of both the property and contents such as fridges, stoves & furniture
What is Refinance Your Home?
Refinancing in Australia is a financial process where a borrower replaces their existing home loan or mortgage with a new loan, often from a different lender. The primary goal of refinancing is to secure better loan terms, reduce monthly mortgage payments, access home equity, or achieve other financial objectives.
How much deposit do I need for a Home Loan in Australia
In Australia, the amount of deposit you need for a home loan can vary depending on several factors, including the lender’s policies, the type of loan you’re applying for, and your individual financial circumstances
- Most lenders typically offer owner-occupied home loans with a maximum loan-to-property value ratio (LVR) of 95%. This means you can borrow up to 95% of the property’s value, and you would need to provide a minimum deposit of 5%.
- Some first home buyers may be eligible for specific government grants or incentives, such as the First Home Owners Grant (FHOG), which can help increase their deposit.
- It’s also possible for some borrowers to purchase a property with a higher LVR, such as through a family guarantee, where a family member provides their property as additional security against the loan.
- For investment property loans, most lenders typically offer a maximum LVR of 90%. This means you can borrow up to 90% of the property’s value, and you would need to provide a minimum deposit of 10%.
How much Loan can I borrow
The amount of loan you can borrow in Australia depends on various factors, including your financial situation, income, expenses, credit history, and the lender’s lending criteria. Lenders in Australia typically assess your borrowing capacity to ensure that you can comfortably manage your mortgage repayments without financial stress. equity you have in an existing property and any potential rental income from investment properties. It will also vary from lender to lender.
I am a business owner with complicated finances; can I still get a loan?
Yes, as a business owner with complex financial circumstances, you can still potentially qualify for a loan in Australia. However, obtaining a loan may be more challenging compared to individuals with straightforward income sources and financial histories. Be prepared to explain any fluctuations in income or any other complexities in your financial history. Keep in mind that each lender has its own lending criteria, so shopping around and seeking advice from professionals experienced in working with business owners can help you find a loan that suits your needs.
17.Can I get a loan if I have a default or credit impairment?
Yes, it is possible to get a loan in Australia even if you have a default or credit impairment on your credit history. However, having a default or credit impairment can make it more challenging to secure a loan, and it may result in higher interest rates or stricter lending terms. you may need to provide a detailed explanation of the circumstances surrounding the default or credit issue. Additionally, be prepared for the possibility of higher interest rates and stricter terms.
How can I get a Free Credit Report
Your credit history is checked every time you apply for a credit facility. Prior to putting together a loan application, you Loans and Mortgages Mortgage Broker will provide you with a free copy of your comprehensive credit report. In Australia, you have the legal right to obtain one free credit report per year from each of the credit reporting agencies: Equifax, Experian, and Illion.
What is the difference between a fixed rate and variable rate loan
Fixed Rate –Interest rates on fixed rate loans stay the same for the loan’s entire repayment term. This means the cost of borrowing money stays constant throughout the life of the loan and won’t change with fluctuations in the market.
Variable Rate- A variable rate home loan has an interest rate that fluctuates so can increase or decrease at any time.
Who has access to my personal information
This policy outlines the specifics of the personal information we gather during the loan application process and how we handle and use that information.
What is Stamp Duty
Stamp duty (or transfer duty) is a state-by-state tax that applies when you buy or acquire a property. Duty applies to properties bought for both owner-occupier and investment purposes. It also applies to properties that you receive as gifts or as part of trusts.
How do I get a home loan pre approval
conditional pre-approval is not a final loan approval. It’s a valuable step in the home-buying process that helps you understand your budget and demonstrate to sellers that you are a serious and qualified buyer. Once you find a property and make an offer, the lender will typically conduct a more comprehensive assessment, including a property valuation, before granting the final loan approval.
what is the eligibility for a first home owners grant
- At least one of the applicants must be an Australian citizen or have permanent residency in Australia. New Zealand citizens permanently residing in Australia who hold Special Category Visas may also apply.
- The applicant(s) or their spouse(s)/domestic partner(s) must not have previously owned a residential property anywhere in Australia prior to 1 July 2000.
- The applicant(s) or their spouse/domestic partner must not have acquired residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence continuously for 6 months.
- All applicants must occupy the home purchased or built as their principal place of residence for a continuous period of at least 6 months commencing within 12 months after completion of the eligible transaction.
- It is the responsibility of the applicant(s) to satisfy the Commissioner that they have met the residency requirements. Applicants may be required to verify this later by providing documentation supporting their period of occupancy (for example: electricity and gas accounts, bank statements, landline and/or mobile phone accounts and household contents insurance policies).
- Applicants who do not meet the residency requirements must contact Revenue SA in writing within 14 days of the date on which it first became apparent that the residency requirements would not be complied with, and repay the grant.
- Each applicant must be a natural person (not a trustee or company) except in the cases of legal disability.
- Each applicant must be at least 18 years of age at the time of making application for the first home owner grant.
- The property purchased or constructed has a market value of:
- $650,000 or less where the contract was entered into on or after 15 June 2023
- $575,000 or less where the contract was entered into between 17 September 2010 and 14 June 2023
What is positive & negative gearing
Negative gearing, on the other hand, occurs when the expenses associated with an investment property exceed the income generated from that property. In this scenario, the rental income is not sufficient to cover all the property-related expenses, including the mortgage interest. As a result, the investor incurs a financial loss from the property. The investor can deduct this loss from their overall taxable income, potentially reducing their income tax liability.
Positive gearing in Australia refers to a situation in which the income generated from an investment property, primarily rental income, exceeds the expenses associated with that property. These expenses include the interest on the property’s mortgage, property management fees, maintenance costs, insurance, and property-related taxes. When a property is positively geared, it means the rental income covers all of these costs, and there is a surplus.
What factors can affect my credit score?
In Australia, your credit score, also known as a credit rating, is a numerical representation of your creditworthiness. It is used by lenders to assess the risk of lending to you. Several factors can affect your credit score in Australia, and it’s essential to manage these factors responsibly to maintain a positive credit history. Here are some key factors that can influence your credit score:
- Late or outstanding debts – If your repayment on a loan or utility, including mobile phone bills, is overdue, it can be recorded on your credit file.
- Recurring late payments – If you regularly make late repayments on any form of credit, this will be recorded on your credit history and you can be considered a bad risk with future lenders.
- Court Judgements – If you have claimed bankruptcy or have a court judgement or court writ lodged against you, these will all be recorded on your credit file.
How Much Does It Cost to Refinance a Mortgage
When refinancing to a new lender in the Australia, there are various fees and charges to consider, and it’s crucial to have a clear understanding of these costs before proceeding with the refinancing process. Here’s an explanation:
Exit Fee (Early Repayment Charge): If you’re refinancing before the end of your existing mortgage deal, your current lender may charge you an exit fee, also known as an early repayment charge. This fee is applied because you’re ending the mortgage contract earlier than originally agreed. The amount can vary depending on your lender and mortgage terms.
Application Fee with the New Lender: When you apply for a new mortgage with a different lender, that lender may charge an application fee. This fee covers the administrative costs associated with processing your new loan application.
Mortgage Discharge & Registration Fees: When you pay off your existing mortgage and switch to a new lender, there are costs associated with discharging the old mortgage and registering the new one. These fees are typically paid to solicitors or conveyancers to handle the legal aspects of the transaction.
Q). Why do I need a mortgage broker
A). Whether you are buying a new home or investing or thinking about refinancing your current home loan, mortgage broker can recommend the loan that’s right for you.
Q). How much money can I borrow?
A). The answer for this questions is different for everybody as it is calculated using many factors including your current income, other current finance loans /credit cards, marital status, number of dependents. Each bank has its own version of a servicing calculator, we can run through this over the phone with you in about 5 mins to determine an estimate of your borrowing capacity.
Q). How much money will I need to set aside for stamp duty?
A). Stamp duty is a state government tax based on a property’s selling price. Each state or territory has different rules and calculations; some states offer discounts to first home buyers. Stamp duty can be a significant additional cost when buying property. Use our stamp duty calculator to get an idea of what you will need to pay
Q). Will my rate/fees be higher due to commission the bank pays the broker?
A). No, there is absolutely no cost to Utilize our services. All our business is generated via customer advocacy and word of mouth advertising. All that we ask is if you are happy with our service that you refer us to your friends and family or anyone who you think can benefit from our service.
Q). If I have additional questions relating my banking following settlement, do I visit a branch or can the mortgage broker assist me with those queries as well?
A). We are available to assist at any time during the loan application process and following settlement. Our business is built upon a long-term approach. We want to be your point of contact for all matters related to your banking needs. If we cannot assist directly we can either put you in touch with someone who can or have that person contact you. We work closely with a range of industry partners to help ensure your query is answered promptly.
Q). What is Lender’s Mortgage Insurance (LMI) and How Does it Work?
A). A premium payable by the borrower (often capitalized/added on top of the base loan amount) in the case of a borrower not having sufficient funds of their own to contribute to the purchase price. LMI protects the bank against potential loss if the borrower is unable to repay the loan. The LMI premium is payable upon funding of a home loan and cannot be used to contribute to the purchase. There are many ways to reduce or even avoid this premium. Please give us a call as we would love to help work through the options with you.
Q). We don’t live in NSW. Can you still help us?
A). Our mortgage brokers help people all across Australia. We have approved loans for customers in every state and territory, We can even help people overseas who want to invest in Australia!
Q). My lender is charging me a higher home loan rate than I see advertised elsewhere. Can I change lenders?
A). This is exactly the reason why most people change lenders. There may be a penalty clause in your current home loan, meaning you may need to pay a discharge fee, but it could still be in your financial interests to change. When shopping around it is always important to look for the comparison rate of a product. A comparison rate is essentially the true rate, taking into account the fees and charges you will pay on the loan. So even though you see a lower rate it doesn’t mean the repayments are less. L & M brokers are able to take the hassle out of this for you.
Q). I have just come off a ‘honeymoon’ interest rate to a much higher rate. Can I move lenders or am I locked into my mortgage?
A). You can walk away from most mortgages, although penalty fees sometimes apply. To review your options, why not contact an L&M broker
Q). If I move my mortgage to a new lender, is there anything stopping that lender from increasing their rates in a few months time?
A). It depends what kind of product you have. If you’re concerned about rising rates, perhaps you should consider a fixed rate home loan, where repayments are fixed for a period from 1 to 5 years.
Q). Why do some lenders charge more than others for lending the same amount of money?
A). Banks and other lenders pay different amounts for the money they on-lend to you, they have different overhead structures and different profit expectations. All these factors affect how much they charge to lend people money.
Q). What does a mortgage broker do?
A). In short, a mortgage broker is a knowledgeable individual who can guide you through the mortgage process, and do so by shopping your loan scenario with any number of lender partners, instead of just one. Opinions aside, a mortgage broker is a middleman that works between the borrower and the bank to help the former obtain home loan financing. Instead of contacting a bank or mortgage lender directly, you have the option of enlisting a broker instead, who will act as your liaison and loan guide.
Brokers can help you apply for a mortgage and do most of the heavy lifting along the way, whether it be a home purchase loan or a mortgage refinance. If you’ve been denied in the past, or have a tricky scenario, a mortgage broker could be just the ticket to get that loan approval. They may also provide a more personal experience if you want a hands-on approach as opposed to say a call center or big bank.
Q). If the loans offered by the banks are the same as those you offer, what is the benefit of me getting my mortgage from you?
A). If you come to us to get your home loan you will receive a complete service. Firstly we can give you an idea of which lenders you will qualify for and then we can help you find the best mortgage offered by those lenders. This prevents you from tarnishing your credit record by applying at many lenders who subsequently reject your application. Once you decide on a loan we help you complete the application and compile the supporting paperwork required. We then send it to the bank and deal with them right up to settlement. This means you won’t have to wait on any bank telephone queues because we will do it for you.
Q). How can a split loan help?
A). A split loan facility lets you combine your home loan and investment loan under one umbrella facility. These arrangements allow for direct loan repayments to be made towards your home loan while allowing interest to capitalize on your investment loan. You can separate the non-deductible debt portion of your home loan from the deductible portion and you will receive separate loan statements for each split.
Q). How does a construction loan work?
A). The Construction loan allows interest only mortgage repayments for the land portion prior to construction and interest only repayments during the construction process. The funds will be paid to your builder in draw downs, after a body of work has been completed, ensuring you only pay interest on the portion of the construction loan you have drawn down rather than on the entire loan amount. Upon completion of construction, your construction loan will automatically revert to a standard variable rate home loan with repayments based on both principal and interest. You have up to 24 months to complete construction and draw down all funds from the loan. The total construction loan may be split between two accounts after construction is complete to assist in managing both personal and investment debt.