FREQUENTLY ASKED QUESTIONS
Our FAQ section should provide you with some of the most commonly asked questions. If you do not find something you looking please get in touch.
What will the Mortgage Broker do for me?
A mortgage broker is a financial intermediary who helps individuals or businesses secure mortgage loans from lenders.
Assessment: Mortgage brokers start by assessing the financial situation and needs of their clients.
Market Research: After understanding the client's needs, mortgage brokers research the mortgage market to find suitable loan options.
Recommendation: Based on their assessment and market research, mortgage brokers recommend mortgage products that best match the client's needs and financial situation.
Application Submission: Once the client selects a mortgage product, the broker assists with the application process. Negotiation: Mortgage brokers often negotiate with lenders on behalf of their clients to secure favorable terms, such as lower interest rates or reduced fees.
Communication: Throughout the mortgage process, brokers keep clients informed about the progress and any requirements or changes.
Closing: When the mortgage application is approved, the broker ensures that all closing documents are prepared accurately and assists with the closing process.
Follow-Up: After the mortgage is obtained, brokers may continue to provide support and assistance to their clients, such as helping with refinancing or answering questions about mortgage payments.
Overall, mortgage brokers help streamline the mortgage process by providing personalized guidance, access to multiple loan options, and expert assistance throughout the transaction.
Assessment: Mortgage brokers start by assessing the financial situation and needs of their clients.
Market Research: After understanding the client's needs, mortgage brokers research the mortgage market to find suitable loan options.
Recommendation: Based on their assessment and market research, mortgage brokers recommend mortgage products that best match the client's needs and financial situation.
Application Submission: Once the client selects a mortgage product, the broker assists with the application process. Negotiation: Mortgage brokers often negotiate with lenders on behalf of their clients to secure favorable terms, such as lower interest rates or reduced fees.
Communication: Throughout the mortgage process, brokers keep clients informed about the progress and any requirements or changes.
Closing: When the mortgage application is approved, the broker ensures that all closing documents are prepared accurately and assists with the closing process.
Follow-Up: After the mortgage is obtained, brokers may continue to provide support and assistance to their clients, such as helping with refinancing or answering questions about mortgage payments.
Overall, mortgage brokers help streamline the mortgage process by providing personalized guidance, access to multiple loan options, and expert assistance throughout the transaction.
What is the Maximum LVR for an investment loan and maximum interest only period?
While investment loans often have specific requirements and terms, such as a maximum Loan-to-Value Ratio (LVR) and interest-only options, these conditions can vary depending on factors such as the lender's policies, market conditions, and the borrower's financial profile. Here's a breakdown of the mentioned terms:
Maximum 90% LVR: LVR, or Loan-to-Value Ratio, represents the percentage of the property's value that the lender is willing to finance through the loan. An LVR of 90% means the lender is willing to lend up to 90% of the property's value, while the borrower is required to contribute the remaining 10% as a deposit. This is a common requirement for investment loans, but some lenders may offer different LVRs based on factors like the borrower's creditworthiness and the property type.
10 years interest-only option: Interest-only loans allow borrowers to pay only the interest portion of the loan for a specified period, typically ranging from a few months to several years. After the interest-only period ends, the loan usually converts to principal and interest repayments. A 10-year interest-only option means that borrowers have the flexibility to make interest-only payments for a decade before transitioning to full principal and interest repayments.
Maximum 90% LVR: LVR, or Loan-to-Value Ratio, represents the percentage of the property's value that the lender is willing to finance through the loan. An LVR of 90% means the lender is willing to lend up to 90% of the property's value, while the borrower is required to contribute the remaining 10% as a deposit. This is a common requirement for investment loans, but some lenders may offer different LVRs based on factors like the borrower's creditworthiness and the property type.
10 years interest-only option: Interest-only loans allow borrowers to pay only the interest portion of the loan for a specified period, typically ranging from a few months to several years. After the interest-only period ends, the loan usually converts to principal and interest repayments. A 10-year interest-only option means that borrowers have the flexibility to make interest-only payments for a decade before transitioning to full principal and interest repayments.
Can i borrow up to 95% without been subject to LMI?
It's true that some professionals may be eligible to borrow up to 95% of a property's value without being subject to Lenders Mortgage Insurance (LMI). This is often referred to as a "professional package" or "professional privilege" and is offered by certain lenders as a benefit to specific professional groups.
Professionals who may qualify for this type of borrowing arrangement typically include:
DoctorsLawyersAccountantsDentistsVeterinariansPharmacistsSome other high-income earners with stable employment
Professionals who may qualify for this type of borrowing arrangement typically include:
DoctorsLawyersAccountantsDentistsVeterinariansPharmacistsSome other high-income earners with stable employment
Can i only put myself on the Loan and not my spouse even thou i am using their income for servicing?
Yes, it's possible for a bank to accept a spouse or partner as a "servicing guarantor" even if they are not listed on the title of the property being used as security for the loan, and they don't directly benefit from the property. Here's how this arrangement typically works:
Servicing Guarantor Role: The spouse or partner acts as a servicing guarantor, meaning they guarantee the servicing of the loan but do not have a legal interest in the property. This involves providing additional security to the lender, assuring that the loan repayments will be met even if the primary borrower encounters financial difficulties.
Income Consideration: The bank takes into account the income of both the primary borrower and the servicing guarantor when assessing the loan application. This can improve the borrowing capacity of the primary borrower by including the income of the servicing guarantor in the assessment.
Credit Assessment: The creditworthiness of both the primary borrower and the servicing guarantor is considered during the loan approval process. Lenders will assess factors such as income stability, credit history, and overall financial situation to determine the risk associated with the loan.
No Ownership Interest: Since the servicing guarantor is not listed on the title of the property and does not receive a substantial benefit from it, their role is primarily to support the loan servicing rather than to have ownership rights or financial stake in the property.
Legal Documentation: The arrangement may involve legal documentation, such as a guarantor agreement or consent form, outlining the responsibilities and obligations of the servicing guarantor.
It's important for both the primary borrower and the servicing guarantor to fully understand the implications of this arrangement, including the potential financial risks involved. Consulting with a legal advisor or financial expert can help ensure that all parties are aware of their rights and obligations before entering into such an agreement.
Servicing Guarantor Role: The spouse or partner acts as a servicing guarantor, meaning they guarantee the servicing of the loan but do not have a legal interest in the property. This involves providing additional security to the lender, assuring that the loan repayments will be met even if the primary borrower encounters financial difficulties.
Income Consideration: The bank takes into account the income of both the primary borrower and the servicing guarantor when assessing the loan application. This can improve the borrowing capacity of the primary borrower by including the income of the servicing guarantor in the assessment.
Credit Assessment: The creditworthiness of both the primary borrower and the servicing guarantor is considered during the loan approval process. Lenders will assess factors such as income stability, credit history, and overall financial situation to determine the risk associated with the loan.
No Ownership Interest: Since the servicing guarantor is not listed on the title of the property and does not receive a substantial benefit from it, their role is primarily to support the loan servicing rather than to have ownership rights or financial stake in the property.
Legal Documentation: The arrangement may involve legal documentation, such as a guarantor agreement or consent form, outlining the responsibilities and obligations of the servicing guarantor.
It's important for both the primary borrower and the servicing guarantor to fully understand the implications of this arrangement, including the potential financial risks involved. Consulting with a legal advisor or financial expert can help ensure that all parties are aware of their rights and obligations before entering into such an agreement.
I am buying a Land and then constructing on it. If this off the plan, home and land or land then then own builder?
Off the Plan:
Buying "off the plan" involves purchasing a property before it is constructed, based on architectural plans and specifications provided by the developer.
Home and Land Package:
A home and land package involves purchasing both land and a house design as a combined package from a developer or builder. Land and Build:
Purchasing land and building a custom-designed home separately allows for greater flexibility and control over the construction process. Banks typically treat each of these property purchase options—off the plan, home and land package, and land and build—differently, as each involves unique considerations and risks. Here's a general overview of how banks may assess and treat these transactions:
Off the Plan:
Valuation: Banks may conduct a valuation based on the proposed plans and specifications provided by the developer. They may also consider market conditions and comparable properties in the area.Loan Approval: Loan approval for off-the-plan purchases is subject to the bank's assessment of the property's value, the borrower's financial situation, and the risks associated with the transaction. Banks may require a higher deposit and impose stricter lending criteria due to the uncertainties involved in off-the-plan purchases.Funding Progress: Banks may release funds to the developer in stages as construction progresses, rather than providing the entire loan amount upfront. This helps mitigate the risk for both the borrower and the bank in case of construction delays or other issues. Home and Land Package:
Valuation: Banks typically conduct a valuation of the land and house package as a whole to determine its market value. They may also consider the quality of construction and the reputation of the developer or builder.Loan Approval: Loan approval for home and land packages follows similar procedures to standard property purchases. Banks assess the borrower's financial situation, the property's value, and other relevant factors to determine eligibility and loan terms.Fixed Price: Banks may offer fixed-rate or variable-rate loan options for home and land packages, depending on the borrower's preferences and market conditions. Land and Build:
Valuation: Banks may conduct a valuation of the land based on its market value and potential for development. They may also consider the cost of construction and the borrower's proposed building plans.Loan Approval: Loan approval for land and build transactions involves assessing the borrower's financial capacity to purchase the land and fund the construction. Banks may require detailed building plans, cost estimates, and construction timelines as part of the loan application.Progress Payments: Banks typically release funds to the borrower in stages as construction progresses. They may conduct inspections at key milestones to ensure that the construction is proceeding according to plan before releasing additional funds.
A home and land package involves purchasing both land and a house design as a combined package from a developer or builder. Land and Build:
Purchasing land and building a custom-designed home separately allows for greater flexibility and control over the construction process. Banks typically treat each of these property purchase options—off the plan, home and land package, and land and build—differently, as each involves unique considerations and risks. Here's a general overview of how banks may assess and treat these transactions:
Off the Plan:
Valuation: Banks may conduct a valuation based on the proposed plans and specifications provided by the developer. They may also consider market conditions and comparable properties in the area.Loan Approval: Loan approval for off-the-plan purchases is subject to the bank's assessment of the property's value, the borrower's financial situation, and the risks associated with the transaction. Banks may require a higher deposit and impose stricter lending criteria due to the uncertainties involved in off-the-plan purchases.Funding Progress: Banks may release funds to the developer in stages as construction progresses, rather than providing the entire loan amount upfront. This helps mitigate the risk for both the borrower and the bank in case of construction delays or other issues. Home and Land Package:
Valuation: Banks typically conduct a valuation of the land and house package as a whole to determine its market value. They may also consider the quality of construction and the reputation of the developer or builder.Loan Approval: Loan approval for home and land packages follows similar procedures to standard property purchases. Banks assess the borrower's financial situation, the property's value, and other relevant factors to determine eligibility and loan terms.Fixed Price: Banks may offer fixed-rate or variable-rate loan options for home and land packages, depending on the borrower's preferences and market conditions. Land and Build:
Valuation: Banks may conduct a valuation of the land based on its market value and potential for development. They may also consider the cost of construction and the borrower's proposed building plans.Loan Approval: Loan approval for land and build transactions involves assessing the borrower's financial capacity to purchase the land and fund the construction. Banks may require detailed building plans, cost estimates, and construction timelines as part of the loan application.Progress Payments: Banks typically release funds to the borrower in stages as construction progresses. They may conduct inspections at key milestones to ensure that the construction is proceeding according to plan before releasing additional funds.