Frequently Asked Questions

We believe that home loan products and loan features should be easy to understand. So we will answer all questions to ensure you have a full understanding.

Do you have more questions?

How much deposit do I need for a home loan?

The answer depends mainly on how much you want to borrow.

Ideally you should have 20% of the purchase price plus allow for other costs such as State charges eg; Stamp Duty and solicitor's fees.

Some lenders will lend you up to 95% of the property value. However you may need to pay what’s called Lenders Mortgage Insurance (LMI), which lessens the risk of the loan to the bank.

Schedule a call and we will help you determine how much deposit you require for your home purchase. Just click "Book Now" to book a suitable time.

How much can I borrow?

The amount you can borrow for a home loan depends on a range of things. When your bank considers your ability to pay back your loan, they look at many personal and financial details, which may include your:

  • income
  • expenses
  • living expenses
  • liabilities, including other debts and
  • existing assets, such as investment properties.

Lenders consider these things to make sure you can make repayments on the loan without placing yourself under financial stress.

You can estimate how much you may be able to borrow using our borrowing capacity calculator. This is just a general guide as your borrowing capacity will vary from lender to lender.

Give us a call 0401 388 153 and will review your borrowing capacity on the lenders calculator to get a more accurate figure.

Should I get a Pre-Approval?

It is always advisable to obtain a Pre-Approval before searching for a property. This way you will have a clear budget in mind and you will not be disappointed if you discover you have been looking at properties above your limit.

With a Pre-Approval you can confidently negotiate and sign a contract when you find your “dream home.”

Once you have been Pre-Approved by the financial institution you’ve decided to go with, we will contact you and you can start your search for your new home or investment property.

What is Lender Mortgage Insurance?

The lender may take out Lender's Mortgage Insurance (LMI) to insure itself against the risk that you may default on your loan. In most cases the lender only pass on this cost to you if you have less than 20% deposit.

The smaller the amount of deposit  you have, is deemed to be a higher risk. Each lender has its own policy about when it will require LMI. Depending on the type of loan you apply for and the lender’s own assessment of the risk.

Without LMI, a lender may be unwilling to provide funds for “higher risk” categories of borrowers (such as low deposit or high loan-to-value ratio loans).

The benefit of paying LMI is so you can buy a property a lot earlier than if you had to wait until you saved enough to pay a deposit of 20% of the purchase price. And by the time you have saved a 20% deposit, the price of the property may have increased.

How do I refinance my Home Loan?

You can start refinancing your home loan the same way you apply for a new home loan – request a callback and we’ll get in touch to guide you through the process.
Once you’ve requested a callback, we will establish if refinancing is the right option for you.

We’ll ask which type of home loan you want to apply for and answer any questions you have about the different products, interest rates and repayment types. 

We will also ask about the home loan you want to refinance – how much you still owe on the home loan and what the property is worth now. We’ll then give you an idea of what you could borrow by refinancing and arrange a valuation to confirm the property value.

Once we’ve confirmed a valuation and have your supporting documents, we’ll run a series of checks to prepare your application. If everything is in order, we then submit your home loan application to the lender for approval.

Once the lender has issued formal approval, the lender will issue the Loan Offer Documents for you to sign. After the lender receives the signed documents they then book settlement.

You are required to continue making your home loan repayments on your existing home loan as normal until the new lender as has completed the settlement process.

How do I calculate home loan interest?

We calculate your interest in two steps.

First we multiply the balance on your loan by your interest rate and divide by 365 days in a year. This shows your daily interest charges.

We then add together your daily interest charges for every day in each month, which produces the monthly interest charge shown on your statement.

If your loan balance was $500,000 with an interest rate of 4.93% p.a. and monthly repayments, the calculation might look like this:

  • 500,000 x 0.0493 / 365 = $67.53 interest per day
  • $67.53 x 30 days in September = $2,026 interest for September

 You can use our Mortgage Repayment Calculator to estimate repayments and interest charges over the life of a loan. You can also use the calculator to check the effect that extra repayments could have on your home loan.

What is equity and how do I access my equity?

Let’s start at the basics. Equity is the difference between the current value of your home and how much you owe on it. So, if your home is worth $500,000 and you still owe $200,000, your total equity is $300,000.

Borrowing against the equity you have in your home can be a smart way to make your money work for you and fund a variety of purchases, including another property. However, there are a variety of factors impacting what your equity can do for you.

Banks will typically allow you to borrow up to 80% of the value of your home.
The difference from the 80% and what you owe is the usable equity (subject to serviceability).
Based on the example above, let’s look at the numbers:
Value of your property $500,000
Value of your property at 80% $400,000
Minus your mortgage  $200,000
This means your potential usable equity would be $200,000.

Even if you have significant equity in your home, it is not guaranteed that you can borrow against it.

You will need to seek out advice from us as your financial specialist to understand the variables and how you can maximize your chances of using your equity to your advantage.

Factors such as income, additional debts, dependents, and loan history will all determine whether you can increase your home to utilize the equity in your home.

Why use a Mortgage broker?

A mortgage or finance broker acts as your go-between, communicating with banks and lenders on your behalf, in order to secure you the best deal for your circumstances.

Australian banks and lenders have different policies and loan requirements, and it is a brokers job to find a loan from one of these finance institutions that fit with your individual situation.

Mortgage Brokers can help find the right home loan for any situation, from purchasing your first home to buying an investment property all the way to refinancing your home loan to a better interest rate.

Your mortgage broker is responsible for negotiating with credit providers such as banks, to find the best possible loan for your circumstances. They can offer you a range of loan options and help you manage the process of buying your property. 

Your Home Loan Consultant provides a greater service, more than just home loans.

We pride ourselves on looking after our customers by discussing all the necessary products and services that we can offer you, including:

  • Solicitor/Conveyancer, if you haven’t already appointed one
  • Home Insurance cover to protect your property and contents
  • Financial Planners for superannuation & Life Cover
  • Loan Protection Insurance
  • Set up your essential services such as Electricity, Gas, Internet etc.

For more information contact Your Home Loan Consultant on 0401 388 153

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