For More Information
07 5655 5669

Frequently Asked Questions

Got some questions? Find the answers here, or contact us, for a quick response.

For more information contact us

How long does it take to apply for a loan? What’s the process?

From first interview to final release of funds could be 3-4 weeks on average.

Our Process

Day One
Client interview

Day Two
Application, preparation and submission to lender

Day Five
Conditional approval

Day Ten
Unconditional approval

Day 20-30
Settlement day

What size deposit do I need?

The minimum deposit is generally 5% of the purchase price. This depends on your personal circumstances. i.e Employment situation, location of your property and the current real estate that you hold. We recommend a personalised assessment.

What is a preapproval and do I need one?

A preapproval is a loan amount you have been approved for by a lender, allowing you to go to auction or make an offer with confidence of finance behind you. It is usually valid for 3 to 6 months. We would strongly suggest a pre approval if you plan to purchase a property at an auction.

How do you (the brokers) get paid?

The Lenders pay us a commission, which we are required to disclose as soon as a loan product is selected. The commissions vary, depending on the lender.

What happens if a bank declines my loan?

Usually your conveyancer should have advised you to have a finance clause on your purchase contract. This will cancel your commitment to purchase the property. Always consult your conveyancer prior to signing a contract to purchase a property.

How do I get the First Home Buyers Grant (FHOG)?

A good mortgage broker should be able to assist you in applying for the FHOG. These funds can be made available on settlement to assist you with your first purchase.

How does a bank determine if a person is self employed?

A person that owns 20% or more in a business is classified as a self employed applicant.

What is a low-doc mortgage?

This is a mortgage that can be applied for without the usual financial documentation. These mortgages are designed for self employed applicants that have not submitted their latest tax returns.

Why do I need insurance?

Insurance is often needed most when it is too late to obtain. It is always a good idea to review your insurance when reviewing your finance. Insurance protects you, your assets, family and sometimes way of life, against events you simply cannot predict.

What is the difference between loan types?

Standard Variable Loan

Standard variable loans are Australia’s most popular type of home loan. The interest rate varies throughout the loan term. These loans generally offer excellent flexibility, low fees and often offer great features such as an offset facility, redraw facility, no limits on additional repayments and in most cases, no early pay-out penalties.

Advantages:

    • Flexibility
    • Lump-sum payments can be made without incurring a penalty.
    • If interest rates fall, your repayments will fall.
    • Often offer extra features.

Disadvantages:

    • If interest rates rise your repayments will rise.

 

Basic Variable Loan

Basic variable loans typically offer lower interest rates and fewer features than the standard variable loans. You often have the option to pay for any additional feature required. Interest rates and repayments will vary throughout the loan term.

Advantages:

    • Relatively low interest rate.
    • Lower repayments.

Disadvantages:

    • Many of these loans do not have the same features or flexibility as other variable loans.

 

Intro Rate ‘Honeymoon’ Loan

An introductory rate loan generally offers a guaranteed low rate for an initial period of time (usually 12 months) after which most will revert to the standard variable rate. The rate can be fixed or variable.

Advantages:

    • Usually the lowest rates on the market.
    • Some lenders provide offset accounts on these loans.
    • Opportunity to reduce the principal quickly during the ‘honeymoon’ period.

Disadvantages:

    • Payments will increase after initial introductory/’honeymoon’ period

 

Fixed Rate Loan

Under a fixed rate loan, the interest rate is fixed for a specified period, usually between one and five years. This loan gives you the certainty of knowing exactly what your monthly repayments will be and peace of mind knowing the repayments won’t rise. However you won’t benefit if rates go down during the fixed term.

Advantages:

    • Guaranteed rate, if interest rates rise your repayments won’t.

Disadvantages:

    • Reduced flexibility.
    • Extra repayments may incur a fee or be limited.

 

100% Offset Loan Account

A 100% offset loan is very similar to an all-in-one loan. Rather than putting all your salary and other income into your loan, it goes into an offset account that is directly linked to your home loan. Any balance in the offset account is 100% ‘offset’ against your home loan. This reduces the amount of interest you have to repay, making your money work harder for you.

Advantages:

    • Can save you substantial amount of interest if used correctly.
    • Operates like a normal transaction account and has a chequebook, ATM card, etc. attached.

Disadvantages:

    • May have higher monthly fees attached to the account.
    • May require a minimum balance in the account

 

Line of Credit Loan

A line of credit loan provides you with access to the equity in your home or investment properties up to a pre-approved limit. You access the funds as you need to. The interest rate on a line of credit loan is usually a variable rate and repayments are interest only.

Advantages:

    • You can use the money when you need it and pay it back when you can.
    • Rates are generally lower than a personal loan or credit card.

Disadvantages:

    • Unless care is shown it is possible to reduce the equity you have built in your home.

 

Low-Doc & Credit Impaired Loans

A low documentation (or no documentation) loan is suited to investors or self-employed borrowers who do not meet the ‘standard’ lending criteria. This may include; those with an impaired credit history, those who are unable to provide the required documentation in support of their loan application, or those who wish to borrow more than 100% of the property value.

Advantages:

    • Simple income declaration form.
    • No tax returns.
    • No financial statements.
    • Can have features such as redraw, line of credit, variable or fixed rates, principal and interest or interest only.

Disadvantages:

    • Generally a higher interest rate.

 

Construction Loans

If you are building your own home or investment property, a construction loan may be suitable for you. This loan requires a fixed price building contract from a registered builder. These loans are usually interest only for the period of building and then become principal and interest once building is completed. A construction loan allows you to draw money as is required whilst building. Also, with the usual necessary documents required when applying for a loan, construction loans also require a ‘fixed price building contract’ and ‘council approved plans’.

Advantages:

    • Competitive variable interest rates.
    • Facility to draw money when necessary whilst building.
    • Interest only payments during the building period.
    • Additional payments can be made.

Disadvantages:

    • Requires a fixed price building contract leaving little room for change whilst building.
    • Some lenders charge a fee for every time you draw money whilst building.
    • Given it is a variable loan; loan repayments will increase if interest rates go up.

Any other Questions?

Can’t find the answers here, please contact us we would be happy to help
Contact Us Today