Home loan experts

What does a mortgage broker do?

A mortgage broker acts as an intermediary between a lender and a borrower. We talk to you about what you are looking to do such as buying a new home and then work out which lender will give you the best rate, fees and type of loan for your situation.

Everyone's situation is different, and everyone's needs are different, so there is no all round "best lender" in the market. Because there are literally thousands of loans to choose from, finding the right loan is a very daunting task!

A mortgage broker makes the decision simple! By using our expertise you can find the right home loan in less than half an hour. We will even deal with the lender on your behalf making the entire process of applying for a mortgage as effortless as possible.

What are your fees?

We don't charge any fees for standard loans. We will only charge a fee for short term loans (less than 18 months) or some types of commercial loans.

How do we get paid? By the lender! Lenders pay Australian mortgage brokers for doing the work that would otherwise be completed by a bank manager. On average we are paid 0.66% as an upfront commission and 0.18% as an ongoing trailing commission. These fees vary between lenders and do not alter the cost of your loan as they are paid by the lender.

Which lenders do you deal with?

We can deal with all major bank and non-bank lenders. We have a strong relationship with the large banks such as the Commonwealth Bank, ANZ, Westpac, National Australia Bank, St George and we are accredited with most of the others. Unlike some other brokers we are not restricted as to the lenders that we can deal with. If a lender works with brokers then we can submit loans to them.

Why should I use you rather than going direct to my bank?

If you go to your bank direct you can't be sure that you are getting a good deal. All they will show you are the home loans and discounts that they themselves offer. With over one hundred lenders in Australia what are the odds that your bank is the best one?

We offer additional services not offered by the banks such as a free annual review to make sure that the lender is still giving you a good interest rate and that you are using your loan correctly.

After your loan has been set up we will also call you to make sure you know how to use the loan and to make sure that you have received paperwork from the lender with instructions on how to set up internet banking and how repayments are to be made.

How does applying for a loan work?

Applying for a loan is very simple. Simply complete a short application form and fax it back to us along with the documents listed on the checklist on page one of the form. We will assess your situation and call you to discuss which lenders will suit your needs. Once we know which lender is suitable we will send you the form to sign for that lender and lodge the loan online directly into their system.

Once a lender receives the loan application from us they will complete their assessment, order a valuation and mail you a loan offer to sign. When this is signed and returned the lender can then arrange settlement and advance your loan. We deal with the lender on your behalf so you can get on with the more important things in your life!

How much can I borrow?

When we receive your short application form and supporting docs such as payslips we will use the lenders own calculator to work out how much you can borrow.

Did you know that every lender assesses your borrowing capacity in a different way? For example one lender may consider overtime as part of your income while another may only use half your overtime and another may not include it at all! There are similar differences in the way lenders assess rental income, commission income, loan repayment expenses and even negative gearing benefits!

Our belief is that you shouldn't borrow money just because a lender says you can afford it. You should always make your own assessment as to how much you can afford to borrow taking into account that rates may rise or that your income or family size may change.

Are you a MFAA & COSL member?

Yes we are a member of both the MFAA and COSL.

The MFAA is the mortgage industry association comprised of banks, non-banks and mortgage brokers as members. The MFAA helps us maintain high ongoing education and training standards, compliance with government regulations and keeps us up to date with industry news. The MFAA has the power to expel brokers that they believe have breached the code of conduct, ensuring that only professionals continue to practice in the industry.

COSL is an independent dispute resolution service for the mortgage industry. Any of our customers that have a complaint that we have not been able to address can lodge a complaint with COSL. COSL can then hear their complaint and if we are found to be at fault can fine our business for its misconduct. To date we have not had any complaints lodged with COSL.

What is LMI?

LMI is an acronym for Lenders Mortgage Insurance. If you are borrowing over 80% of the value of a property then your lender will probably require that your loan is insured due to the increased risk. This insurance protects the lender, not you. If you were to default on the loan and your lender was to lose money then they can claim on their LMI policy to recover their loss. The two main LMI providers in Australia are Genworth Financial and PMI.

The insurance premium for LMI is charged at a sliding scale depending on the loan amount, lender and percentage of the property value you are borrowing. The lender will pass this premium on to you as a once off fee when your loan is advanced.

For low doc loans LMI is often charged if you borrow over 60% of the property value. Some lenders will pay your low doc LMI premium for you and will charge you a higher interest rate to compensate.

Did you know that the LMI premium can vary significantly depending on which lender you use? Often people do not check the cost of LMI when shopping for a loan and think that the lender with the cheapest rate is best when in actual fact they could end up paying several thousand dollars more! We always check to make sure that the lender you are using has a competitive LMI premium AND interest rate for your home loan.

What does LVR mean?

LVR is an acronym for Loan to Value Ratio. This is a term used by lenders to describe the percentage of the property value you are borrowing. It is calculated by dividing the loan amount by the value of the property or the purchase price, whichever is the lesser. For example if your home was worth $1,000,000 and you decided to borrow $500,000 then your loan would have an LVR of 50%.

The LVR is used as part of the loan assessment process to determine the risk to the lender and also to determine if your loan will require Lenders Mortgage Insurance (LMI) or not. As a general rule lenders are more flexible with their approval guidelines if your loan has an LVR below 80%.

Do I need a deposit?

First home buyers can often borrow 100% at normal home loan rates without having to pay any deposit. This is because the first home owners grant can often cover the cost of the Lenders Mortgage Insurance (LMI) premium and other costs associated with buying a property such as conveyancer's fees.

If you are not a first home buyer then you may need to borrow using a 106% loan so that you have enough money to cover any stamp duty, conveyancing fees and the LMI premium.

If you have a guarantor who will let you use their house as additional security for the loan then you can often borrow as much as 110% of the purchase price without paying any LMI at all! Often lenders are happy to take a second mortgage as security for a guarantee so it may be ok if your guarantor already has a loan on their property.

For those of you that already own a property there are loans that will allow you to use the equity in your current property as security for your new loan, allowing you to borrow the full amount you need to buy more real estate without the aid of a guarantor.

Do I need a loan pre approval?

Strictly speaking you do not have to get your loan preapproved before signing a contract to buy a home. However in our opinion you would be taking a huge risk by committing to buy a property without knowing if you can obtain a loan! If your loan is preapproved then you can shop around for a house comfortable in the knowledge that you will have little trouble obtaining finance.

Most good properties sell quickly, no matter what the market conditions are like. If several buyers are all after the same property it is usually the one that has their loan approved that can sign the contract first and secure the property. Any buyers that are not preapproved often have to wait for their lender to give them an approval before they can go ahead and buy. Depending on the lender this may take some time so may mean that you lose the perfect home!

Getting a preapproval is very simple. Just talk to us and we will guide you though the entire process.

What is the process of buying a home?

The first step of buying a home is to work out a budget and maximum amount you are prepared to spend. This also includes talking to us and applying for a loan preapproval, there isn't much point buying a home if you don't know if your home loan will be approved! You should also look for a conveyancer or solicitor to help guide you through the legal procedures of buying a home.

The next step is to research the area you are interested in, speak to local agents and find a suitable property. When you find a property that you are interested in you can then make an offer. Depending on which state you are in and if the property is being sold at auction the exact process can vary somewhat. Sometimes you will have a cooling off period or a finance clause allowing you time to arrange a pest inspection, building inspection, strata inspection (for units or townhouses) and obtain your final loan approval.

Once you have completed your due diligence and your loan is formally approved you can commit to buy by giving the selling agent your deposit. This is usually 10% of the purchase price however you may be able to negotiate a smaller deposit or to provide a deposit bond instead.

Normally there are six weeks between when you sign the contract and when the property changes hands. During this time your conveyancer or solicitor will liaise with your lender, your mortgage broker and the vendor's (seller's) conveyancer or solicitor to make sure everything is ready for the contract deadline.

On the afternoon of the day of settlement you can pick up the keys to the house from the agent and move in! Your lender will have advanced the funds and will usually send you a letter to inform you when the first repayment is and confirming how the repayments are being made.

What is the difference between a conveyancer, solicitor & a settlement agent?

Solicitors are specialists who can give legal advice and prepare legal documents. This can include conveyancing which is the process of transferring a property's ownership from one person to another.

Conveyancers are specialised clerks that work only with conveyancing. Conveyancers may or may not have a legal background or legal training. Most states require that conveyancers hold a license, have the appropriate qualifications and that they are adequately insured.

In Western Australia settlement agents are used in place of a solicitor or conveyancer. Settlement agents are specialised administration staff that handle the transfer process, they do not usually get involved in the offer and acceptance contract between the buyer and seller which is instead handled by the real estate agent.

There isn't too big a difference between a solicitor and a conveyancer except that a solicitor is qualified to give legal advice whereas a conveyancer may be a little cheaper and may give better service.

What is settlement?

Settlement is the term given to when the purchase is settled or resolved. This is when the difference between the deposit already paid and the agreed purchase price is paid and the title is transferred to the new buyer.

In most cases the actual settlement is a meeting between the vendor's conveyancer, the vendor's lender, the purchaser's conveyancer & the purchaser's lender. At the meeting the purchaser's lender will advance the loan to the vendor or to the vendor's lender if the vendor had a loan on the property which needed to be repaid. The vendor or vendor's lender will then give the title for the property to the new lender as security for their loan.

Can you give me some tips for moving house?

Make sure you are organised well in advance of the settlement date of your purchase. Arrange a removalist or hire a truck and pack everything into boxes well before the moving date. There is nothing worse than waiting for the last day, running out of boxes and then having to cancel the removalist because you aren't ready.

Go through the transaction on your bank statements & mail received for the last six months so you can write a list of every company that you will need to notify of your change of address. You can usually google the name of the companies along with change of address and you should quickly find out if you need to call them or send them a letter for them to update their database. Go to Australia post and lodge a mail redirect form to make sure you don't miss out on any important letters.

Cancel any services such as pay TV, utilities and lawn mowing. If possible just take them to the new address with you! Don't forget that if you are changing between Optus and Telstra there may be a delay in connecting the new phone. Ideally you should contact your utility providers at least three weeks before moving.

When you are at your new address you can use google maps to search for local restaurants, pubs, shopping centres and other services.

How do I know if I will get the First Home Owners Grant (FHOG)?

The First Home Owners Grant (FHOG) scheme is a federal government initiative however it is managed by the state governments. Some states have their own additional benefits such as an extra bonus grant or an exemption from stamp duty. You should refer to www.firsthome.gov.au for a link to your state governments first home benefits website.

On the website there will be a contact number, fact sheet or eligibility guide which can assist you further. As a general rule of thumb you must be a natural person (not a company), buying your first home and you must be a permanent resident, Australian or NZ citizen. If your spouse or de-facto have already owned a home then you may be ineligible for the grant. Contact your state government for the full eligibility criteria.

Why do people refinance?

People refinance their home loans for a variety of reasons. Refinancing is the process of repaying your old home loan with a new home loan, usually from a different lender. An internal refinance is the term used if you are repaying your old loan with a new loan from the same lender. A mortgage broker can help you with both an internal and external refinance.

Refinancing to save money is the main reason why people refinance. If your lender is no longer competitive then you have little alternative but to move on. The difference between lenders can be stark and it quite common for our customers to save thousands of dollars just by changing home loans.

Other customers of ours refinance to consolidate debt. This is the process of paying off multiple debts such as your home loan, credit card, personal loan and HECs debt all into one home loan. The more expensive unsecured loans are paid out by your new loan which means that overall you will have a lower rate and longer loan term. This reduces the size of the repayments and reduces the amount of interest you pay.

There are many other reasons to refinance. These may include refinancing because your current lender can't approve a loan increase, refinancing to release equity or refinancing because your current lender has terrible service.

Why won't my bank match the offer from the lender you are suggesting?

Most lenders tend to offer you the world when you first apply for your home loan but then stop giving you a high level of service and good interest rate discounts when you have been with them for a few years. Banks know that if you have your home loan, bank account and credit card all with the one bank then you are unlikely to go to through the hassle of changing all your accounts. Because of this they often refuse to give you the discount they are giving new customers, even if you threaten to leave! The banks use the term "old money" for a current customer and "new money" for a new customer.

We review our customers loans annually to make sure they are given the new money discounts or else we recommend a new lender that will give them a better deal.

How do I repay my current lender?

When you refinance your loan the process of paying out your current lender is handled by us as your mortgage broker in conjunction with the new lender you apply with. We complete a discharge form for you to sign and fax to your current lender notifying them that they should prepare to calculate a payout figure for the proposed settlement date.

Your new lender will meet with your previous lender and hand them a cheque for the amount owing in exchange for the certificate of title for your property. You do not need to get involved in this meeting.

What is a rapid refinance?

A rapid refinance is when your new loan is advanced before your current lender in ready to be discharged. A rapid refinance may also be know as a fast refi, XRO or express refinance. The end result is that your new loan can be set up around one to two weeks sooner!

The new lender can do this by depositing the estimated payout figure for your current loan directly into your current loan account. They also withhold a buffer just in case the payout figure is incorrect. Once your new loan is advanced the new lender will chase up the old lender to obtain the certificate of title during the following two to three weeks. The buffer is refunded to you once the certificate of title has been received.

If I refinance do I need to switch my cheque accounts and credit cards to the new lender?

No you do not need to move all your accounts to your new lender. For basic home loans and fixed rate home loans there is usually no problem with keeping your current bank accounts.

For line of credit or professional package loans you can keep your current accounts if you want to however there are usually strong benefits associated with switching everything to the new bank. This is because for a line of credit all your transactions revolve around your loan account and for a professional package the bank will often give you a fee free credit card and cheque account.