How much of a deposit do I need?
Generally speaking, a lender will want you to have a deposit of at least 5 – 10% of the purchase price. The more money you have in savings, the better placed you will be to argue for greater home loan discounts. If your deposit in less than 20%, you may be required to pay Lenders Mortgage Insurance. You can pay the Lenders Mortgage Insurance as one lump sum or capitalise it into your home loan. Your local broker can talk you through exactly how Lenders Mortgage Insurance works and how much you may be required to pay.
Do I need a pre-approval?
Pre-approvals are not mandatory when it comes to buying a property, but there are several benefits to having one. They establish your financial position and let you know how much money you can borrow and what you can afford to buy. A pre-approval also proves to a real estate agent that you are a serious buyer. They are free and are valid for three months.
What does this service cost?
There is no fee for finding the right loan for you – it’s a free service to you. We, Kowloon, gets paid a commission from the lender.
What does a mortgage broker do?
A mortgage broker acts an intermediary between you as a borrower and a number of lenders. The broker’s role is to assess your personal circumstances, find a suitable loan product for you and then negotiate the successful approval and settlement of the loan.
How much income do I need to qualify for a home loan?
This will depend upon your circumstances, what loan product you are looking for and the purpose of the loan. We analyse and identify your needs and then look for the best solutions for your individual needs and circumstances.
What is mortgage insurance?
Mortgage insurance covers the lender in the unlikely event that you default on your loan. It does not cover you, the borrower. Our consultant will advise you if you require mortgage insurance and the costs involved. We may be able to structure your loan to avoid, or minimise the need for mortgage insurance.
Can I still apply for a home loan if I’m expecting a child?
If you are expecting a child, you are still eligible to apply for a home loan, but it may affect how much money you will be able to borrow. You will need to complete an income, assets and liability test with a lender to prove you are able to service a loan. Your chosen lender will then assess you on your savings, how much parental leave you intend to take, your financial history, and work arrangements.
How long does it take for my loan to be approved?
After you lodge your loan application, it can take weeks for it to be formally approved by your chosen lender. The time it takes is influenced by a variety of factors, including the availability of supporting documents, the complexity of the application, the volume of mortgage applications being assessed, and the time of year. Before you apply for a loan, you should always make sure you have all the necessary documentation ready as this will help speed up the process. To find out exactly what documents you will need to apply for a loan, click here. Your mortgage broker can help you lodge a home loan application and ensure your home loan is formally approved before your property’s settlement date.
What’s the difference between fixed and variable rates?
With a variable rate loan, the interest rate you pay can change at any time, either up or down, in line with official interest rates set by the Reserve Bank of Australia. Market circumstances and competition between lenders can also lead to interest rate changes, which can affect the interest rate of your loan. The interest rate of a fixed rate loan is just that – fixed (or set). It remains unchanged, for a specified period, often a number of years, regardless of changes to interest rates generally.
Should I choose a fixed or variable interest rate?
This depends on whether you think interest rates will rise or fall in the coming years. If you think interest rates will rise in the coming years, you may want to fix your rate at today’s lower rate. Be aware though, predicting future interest rate levels is very uncertain. You may fix a loan at today’s rate, only to see future interest rates fall – in which case having a variable rate loan, whose interest rate would also fall – would have proved to be the better option.
How do I know which loan is best for my needs?
This is best answered by meeting one of our mortgage consultants. Through the website you will see there are many factors to consider which is best for your individual needs.
What is a split loan?
A split loan is where one part of the loan is at a variable rate, and the remainder is at a fixed rate. It may be split 50% variable/ 50% fixed, or some other ratio such as 60/40. This type of loan effectively takes an “each way bet” on which way future interest rates are considered likely to go by the borrower.
What is an investment loan?
An investment loan is a type of home loan that someone takes out to buy an investment property. It is a mortgage solution for those who want to buy a property and rent it out to receive income from it, but can’t afford to buy the property without a loan.
Many things about investment loans are different to how standard home loans work because they have stricter eligibility requirements. Investment loans often require a higher loan-to-valuation ratio (LVR), meaning investors need to raise a larger deposit before applying for a loan. They also have a slightly higher interest rate on average than residential home loans do.
Expenses that you make for your investment property can be claimed as tax deductions to reduce your taxable rental income while you’re renting it out, and your capital gains tax if you sell the property.
How does it work? What are the steps involved?
Determine How Much House You Can Afford
Get Prequalified and Preapproved for credit for Your Mortgage
Shop for Your Home and Make an Offer
Work with a Mortgage Banker to Select Your Loan
Have the Home Appraised
Coordinate the Paperwork
Close the Sale
Business loans
Choosing a business loan will depend on your business needs and strategy. Business loans can be used to pay for expenses including:
- Shop and office fit outs
- Office equipment
- Commercial vehicles
- Equipment and machinery
How much can my business borrow?
Business loans are generally sized according to the business turnover and they range from $5,000 to $500,000. These business loans can be suitable for small businesses or medium sized businesses.
What documents are needed to process a business loan application?
The process is simple and can be completed online. Simply complete the business loan Application Form and submit 6 months of bank statements, for business loans under $100,000. For business loans over $100,000, you’ll also need to provide financial statements and a snapshot of the business’ ATO portal.
Do you need money deposit for a business loan?
No. A secured loan will require some form of collateral (property or other assets) but no money from you. An unsecured loan does not require any collateral, so there’s no money down (deposit) to get a business loan. With banks tightening credit standards and some eliminating business loans that use residential property as collateral, more business owners have been turning to unsecured business loans. These loans have shorter loan terms (usually up to 24 months), so can help to meet short-term cash flow needs of some business owners wondering how to get a business loan.
How do you qualify for a business loan?
This will depend on the lender. With bank term loans, you will be required to complete a certain amount of paperwork. Many traditional lenders will want some form of collateral, usually residential or commercial property. Some other lenders can access your banking transactions and/or accounting records to make a lending decision. In addition to completing a short online application, checking your credit history to make a lending decision would be part of the necessary step . In addition to using artificial intelligence and machine learning, some lenders would analyse the financial performance of a business and make a lending decision.
Can I pay off my business loan early?
With most business loans, there is an option to pay off the loan early. However, with some lenders, you will pay the interest for the full term even if you pay the loan off early.
Is my business eligible to get business finance?
This will depend on a number of factors including your financial position, credit history and ability to make repayments. Business lenders will typically look at your cash flow, profit and loss statement and balance sheet. In addition, they will check your credit history to see what other debts you have and how reliable you have been in making payments. Some lenders will require collateral to get a business loan, while others offer unsecured business loans that don’t require collateral. Some lenders have minimum eligibility criteria before they will consider lending. In general, the minimum requirements include having an active ABN or ACN, being in business for more than six months, and having over $5,000 in average monthly sales.