F.A.Q

A Mortgage Broker works one on one with clients and acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses.

Mortgage Brokers assist individuals to find a lender that can provide the specific Home loan that suits their personal circumstances.

More than 69.5% of Australian Residential Mortgages written go through a Mortgage Broker.

As your mortgage is probably the biggest expense you will ever have it a great idea to have a professional mortgage broker to provide you with credit assistance and advice.
A professional Mortgage Broker can help you:
– Assess your financial circumstances
– Find a loan that is not unsuitable for your individual situation
– Manage the application process
– Provide advice at every step

A Mortgage Broker is going to provide you with the service and choice of home loan and lender that a bank simply can’t.

The key benefits to using a Mortgage broker are:
– We are professional and put your best interests first, our clients are important to us and we want to look after them throughout their financial journey
– We provide choice of Home Loan Products and Over 40 Lenders on our Panel
– We save you time and money and do the legwork for you liaising with the lenders, conveyancers, settlement agencies, real estate agents, accountants and builders.
– We educate and empower you to make an informed decision on your Home Loan needs
– The risk of decline is reduced as a Broker understands the different credit policies of lenders and tailor the application to your personal circumstances

Mortgage Brokers are not paid by the borrower. Mortgage Brokers are paid via commission, which is split into two components. An upfront fee from the lender which is based on a percentage of the amount you borrow. The other component is trail commission which is a payment for continuing to assist with the client’s ongoing loan administration requirements. The commission is paid by the lender to the Aggregator (or Australian Credit Licence holder), and then paid to the Mortgage Broker after aggregation costs and fees have been taken out.

To be able get a home loan you need a cash deposit, the amount depends on your personal circumstances.

Ideally lenders prefer a deposit of 20% on the value of the property. The benefits to having a 20% deposit are that you won’t need to pay Lenders Mortgage Insurance (LMI) to the bank. If your deposit is less the 20% of the value of the property you will need to pay Lenders Mortgage Insurance (LMI) as the bank sees your loan as a greater risk.

So this means you can get a loan if you have a deposit of less than 20%, some lenders will allow you to have 5% of the deposit plus costs. LMI can be paid upfront or added to the loan amount. This policy varies from lender to lender and is based on the individual’s circumstances.

There is also another option which is a guarantor loan to assist you in getting a home soon. This is where a family member can act as a guarantor on the loan.

A clawback of commission is charged when a loan is discharged up to 24 months after commencing. The clawback fees are charged by the lender to the Mortgage Broker. As it costs the banks a considerable amount of money to put a loan on its books and the lender has paid a commission to the broker they have no choice but to charge this fee.

Lenders Mortgage Insurance or LMI occurs when you are buying a property and you have less than 20% deposit. Lenders Mortgage Insurance insures the Lender against non-payment or default on your residential property loan. Lenders Mortgage Insurance protects the lender but it also allows purchasers to buy a home with as little as 5% deposit.

Demonstrated Genuine Savings behavior provides evidence to the applicant’s capacity to service the home loan repayments as well as their proven ability to meet regular commitment of home loan repayments. 5% genuine savings needs to be verified on all Lenders Mortgage Insured Loans where the base LVR (Loan to Value Ratio) exceeds 80%.

Examples of 5% Genuine Savings may be:
– Regular savings pattern building up to the required minimum 5%
– Savings statements showing the required 5% of purchase price have been held for a minimum period of three months
– Equity in real estate owned by applicants, where such real estate is offered as collateral security
– Other criteria may apply

Examples that can’t be used a 5% genuine Savings:
– Gifts of any kind
– Proceeds of a personal loan or other borrowings
– Builders rebate / Incentive
– First Home Owner Grant (FHOG)
– Funds held in a business/company trading account

Loan to Value Ratio (LVR) is the loan amount divided by the value of the property. Lenders require the borrowers to have Lenders Mortgage Insurance if they lend you more than 80% of the property.

If the LVR is over 80%, then Lenders Mortgage Insurance will apply and this can be added to the base loan amount.

A key thing to note is the value of a property is determined by the lender’s valuation and NOT the price you paid for it. There may a difference between the valuer’s price and the purchase price.

Your credit report holds information relating to your credit history and it can help credit providers, such as banks, financial lenders, telco and utility companies, get a clear picture of your credit worthiness when you make an application for a loan or credit contract.

If you’ve ever applied for a credit card, personal or home loan, store finance, mobile phone or an electricity or gas contract it is likely that you will have a credit report.

A credit report includes information such as:
– Personal details including your full name, date of birth, driver’s licence, gender and residential addresses and employer information.
– Consumer credit information. i.e Credit applications for personal use, Credit account information including type of credit account, the credit limit and the dates accounts were opened or closed. Monthly repayment history on credit accounts such as mortgages and credit cards. Details of overdue debts like payment default
– Publicly available information can also be included as part of your consumer credit information. This includes court judgements and court writs, directorship details, proprietorship details and bankruptcy, debt agreement and personal insolvency information.
– Commercial credit information such as Credit applications for credit for commercial purposes and details of overdue commercial credit accounts.