DO CREDIT CARDS AFFECT HOW MUCH I CAN BORROW ON A HOME LOAN?
Yes they do, sometimes it is necessary to cancel or reduce the limits on your cards in order to achieve the approval amount that you require.
SHOULD I PAY OFF MY CAR LOAN BEFORE I BUY A HOUSE?
This depends on how much deposit you have. It may be necessary to reduce or cancel the car loan in order to achieve the approval amount you require on a home loan. To find out more please contact us to discuss your circumstances.
WHAT IS THE MINIMUM DEPOSIT REQUIRED?
In some circumstances the deposit can be as low as 3% of the purchase price of the property. There are various factors that need to be considered before we can advise what deposit you need in your own individual circumstances. To find out more please contact us to discuss your circumstances.
WHAT IS MORTGAGE INSURANCE? DO I PAY THIS?
Generally, this insurance is taken out by the lender when the amount borrowed is over 80% of the property value. This insurance covers the lender in the event that the borrower defaults on their loan and the sale of the property is unable to cover the outstanding debt. Mortgage insurance premiums are usually paid by the borrower. There is no protection for the borrower.
SHOULD I APPLY FOR A LOAN BEFORE I FIND A HOUSE?
It is sensible to obtain finance approval prior to finding a property. This prevents possible disappointment (should you find a property and have your heart set on it and then have the loan declined). If you are attending an auction then you must have finance approval before you register to bid.
SHOULD I PAY WEEKLY OR FORTNIGHTLY INSTEAD OF MONTHLY?
By paying fortnightly or weekly, the average 30 year home loan term can be reduced dramatically. Check this option out on our loan repayment Calculator to see what a difference this can make to your proposed loan. We usually suggest that you pay fortnightly.
WHAT IS THE MAXIMUM TERM OF A LOAN?
Maximum term is 30 years with most lenders, some will allow 40 years depending on your age.
WHAT SORT OF PAPERWORK DO I NEED TO APPLY FOR A LOAN?
Please contact us for a checklist of documents required, as it can vary depending on your circumstances.
HOW LONG WILL IT TAKE FOR MY LOAN TO GET APPROVED?
After your loan application has been completed by the mortgage broker, and you have supplied all the required supporting documents it usually takes 3 to 5 days for approval. If a property valuation is required it may take longer.
HOW WILL MY DEPOSIT GET PAID?
In most contracts of sale there is a minimum deposit required of 10% of the purchase price, in some cases 5% can be paid. This is paid using your savings, however if your home loan is more than 90% of the purchase price then we are able to issue a deposit bond.
WHAT IS A DEPOSIT BOND/ HOW MUCH DO THEY COST?
A Deposit Bond is a guarantee that substitutes for cash deposit between signing contracts and settlements. Deposit Bonds can be issued for all or part of the deposit amount required, up to 10% of the purchase price.
The cost of a Deposit Bond is calculated at 1.3% of the deposit amount requested.
Example: Purchase price $400,000, requires a 10% deposit of $40,000 at 1.3% = $520.
DO I NEED A SOLICITOR?
When purchasing a home we always recommend you use a solicitor for your conveyancing. If you are refinancing you do not need a solicitor. Please see useful links for Canberra Based Solicitors we recommend.
WHAT IS SETTLEMENT AND WHAT IS THE USUAL SETTLEMENT TERM.
In most circumstances once you have exchanged contracts the usual settlement term is 30 days. However this can vary depending on the type of property you buy ie Off the plan purchase or delayed settlement.
Settlement is the day that you finalise payment of the property. Your Home Loan is activated and you have become the legal owner of the property.
AT WHAT STAGE OF THE PROCESS WOULD I PAY MY STAMP DUTY?
Stamp duty is usually paid in the week prior to settlement, your solicitor will advise when it is due.
DO I NEED TO GET A BUILDING AND PEST INSPECTION?
In Canberra it is compulsory that these reports be provided by the seller. If you purchase the property then you will refund the seller for the cost of the reports at settlement.
WHAT IS AN INTEREST IN ADVANCE LOAN?
Interest-in-Advance loans are similar to most standard fixed-rate, interest-only loans but with one key difference: depending on their individual circumstances, borrowers can pre-pay the next year's interest before 30 June and claim it as a tax deduction in the current year, where the underlying loan is used for income producing purposes.
You should consult your accountant or financial advisor before choosing any type of investment loan for taxation reasons.
