Frequently Asked Questions


1. How do I find the right Home Loan for me?
Many people are surprised to learn that there are literally thousands of home loan products available. Australia’s lending market is very competitive with a seemingly endless choice of home loans available from local banks, credit unions and specialist lenders. Depending on what is most appropriate for you and your borrowing power you can choose from standard variable loans, basic variable loans, discount variable/honeymoon, also known as introductory loans, fixed rate loans, combination/split loans, Line of credit/Equity loans, low documentation loans, no documentation loans and non-conforming loans.

 

2. How much will a Bank lend me?
This depends on a range of factors including your personal circumstances, the price of the property and any valuation that may be required (a bank valuation may not be the same as the purchase price).
Depending on the lender, they may be prepared to lend up to 95% of the valuation, depending on your ability to repay. It’s worth noting that loans of more than 80% valuation often require mortgage insurance, which the borrower pays for.

 

3. How do I choose the right Home Loan and the best rate?
It’s often difficult to know how to find the best home loan rate available. It’s surprising how many people simply walk into their local bank branch and accept whatever home loan rate the lending manager offers them without knowing what alternative options might be available.


Good brokers use specialized software to access and keep up to date with the entire range of loans on offer from their panel of lenders. Apart from complexity, with changes potentially occurring somewhere daily, it really does require the assistance of technology to analyse options effectively.

 

4. How do Mortgage Brokers work?
A Mortgage Broker offers loans from a panel of lenders, including banks and non-banks. In Australia now, there are literally hundreds of lenders with many, many more options than was traditionally available in the past. Competition for additional customers is fierce and new home loan products are available every day. Using a mortgage broker is now an essential part of scouring the market for the right home loan. In simple terms, brokers evaluate your situation against the lenders on their panel for the best deal.

 

5. How can a mortgage broker service be free?
Lenders work with mortgage brokers because they effectively give the lender a bigger “shop front?without carrying a traditional employee or “bricks and mortar?overhead. Some lenders have few or no branch networks and rely on brokers to represent their products. Other lenders like the major Banks have their own branch networks, but simply extend their access to new clients through the mortgage broker network. The lender pays the broker fees or commissions for your business. Just as if you were dealing with a bank manager or lender, these fees do not change the interest rate you pay on a home loan.

If you have any other questions, please do not hesitate to call or us or email us directly.


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