| What
is the role of a mortgage broker? If you walk into your local bank branch and enquire about home loans, you are more than likely to be advised that they offer the best home loan products with the best interest rates available in the market. At Lyan Finance, we have access to over 30 different banks, non banks and other financial institutions across Australia. We compare all their different offerings to ensure you obtain the most suitable home loan product with the most competitive rates that best caters to your personal requirements. |
| Do
you charge any fees for your service? No. There are many mortgage broking companies who do charge a fee for service. However at Lyan Finance, our services are complimentary, fee and obligation free. |
| What
is a Pre-Approval? Prior to commencing your search for a property, we highly recommend that you first obtain a Pre-Approval from a chosen lender to ensure we have satisfied your borrowing eligibility, capacity & affordability. After assessing your application, a Pre-Approval is an indicative approval from the bank confirming that they are happy to lend you the requested loan amount subject to confirmation of the security. Then, once you have confirmed a purchase, we request your application be assessed for Formal Approval. Most banks/lenders do not charge any fees for a Pre-Approval. |
| What
determines how much I can borrow? Your borrowing capacity is calculated by netting your income against your current liabilities. Income may be in the form of PAYG employment wages, commissions, bonuses, interest income, dividends and government FTB payments. Liabilities may include car loans, personal loans and credit cards. As all banks/lenders have different policies and appetites for risk, your borrowing capacity will differ across all the lenders. |
| How
much deposit do I need? At minimum, you would require a 5% deposit. For example, if the purchase price is $500,000 then you would need to have a deposit of $25,000 + stamp duty costs. |
| I
don’t have a deposit saved but my parents are happy to provide a gift of 10%
of the purchase price. Is this acceptable?
Yes. Provided the gift
is unconditional, there are several banks/lenders who will lend 90% of the
purchase price if you can evidence the gifted funds.
|
| What
is Lenders Mortgage Insurance (LMI)?
Mortgage insurance (LMI)
is a premium that you pay but it protects the bank. The bank requires you to
take out mortgage insurance if you borrow more than 80% of the purchase
price. The mortgage insurance premium is typically capitalised onto the loan
so it does not have to be paid in cash.
|
| What
other fees/charges should I budget for when buying a property? We recommend you set aside an additional $3,000-$4,000 to cover various costs incurred in obtaining finance and purchasing a property. Some of these costs include: bank application fees, government registration fees, solicitor fees, building & pest inspection reports and/or strata reports. |
| I
have a listed default. Will this impact my borrowing eligibility?
In short, yes. Any
listed default considerably reduces your chances of obtaining finance.
However it does depend on various factors behind the default including: the default
amount, type of default, when it was listed and when it was paid (or not
paid). Major banks/lenders can still consider your application if the listed
default is a small amount and had been paid. Alternatively, there are lenders
who specialise in lending to borrowers with impaired credit histories as well
as companies who specialise in removing the listed default from your credit
file.
|
| Should
I take a variable rate loan or a fixed rate loan?
A variable rate will
move up and down over time depending on state of the economy and financial
markets. A variable rate product will offer the most flexibility and allow
you to make unlimited extra repayments to pay your loan off faster. Those
extra repayments are also available to redraw back out should you need it
back in the future. With a fixed rate loan, you are locked-in to a
pre-determined rate for the chosen fixed term. Fixed rates are offered for 1-5,
7 or 10 years with some lenders. Fixed rates offer protection against future potential
rate rises and provide certainty of repayments each month. However they are
less flexible than variable rate products and disadvantageous if there is a
down-turn in the market and rates drop dramatically. A combination of fixed
and variable rate products is also an option. (Fixed rate 'lock in' fees may be applicable and 'break costs' may apply).
|
| Please contact the office for any clarification or additional questions. |