FAQ

Before I make any decisions about my home loan, what is the most important thing I should do?

• Research. You cannot do enough. It's going to save you money in the short and long term.
• Its also an education that is going to improve your welfare. You will be taking a key responsibility in your future.

I am concerned about borrowing too much money. What do I do?

• More people should ask themselves this very question. Your commitments should not exceed 40% of your pre-tax income.
• When you do your sums, always be conservative. Allow for unexpected expenditure e.g. an old fridge that is due for replacement etc.
• Your goal should be to repay the loan well within the time allowed and perhaps much sooner.

Should I go for a BASIC, STANDARD or PREMIUM home loan?

• The more features the loan has, the higher the interest rate.
• You have to be realistic and decide whether you want all the "Bells and Whistles".
• Most 1st Home Buyers don't. Some Investors or those who want to refinance have to have the extra features and are prepared to pay the extra 0.5%-1.0% pa.

What about the Line Of Credit home loan?

• This type of loan allows direct salary crediting.
• In the meantime you charge all your living expenses against your credit card;
• Then the loan sweeps the credit card just before the interest free period expires.
• Sounds good all right because you genuinely save interest and get some other benefits such as points for every dollar spent. But you need to be very financially disciplined and not get carried away with credit card.

Should I go VARIABLE, FIXED Rate of a mix?

• That's a hard one to answer but here are some guidelines.
• It depends on your economic outlook, your cash flow pattern, the size of your loan, your expectation for the life of the loan and the difference between the Variable and Fixed rates at the time of your consideration - just to name a few.
• As a matter of caution, it is advisable to lock in 50% of the loan as Fixed Rate for a term commensurate with your investment outlook.

Should I get a loan from a BANK, NON-BANK Lender or should I go through a Broker.

• Again it depends what you value most.
• Banks give you choice of their large product range. You may have a pre-existing relationship with them that compels you to work through them.
• Smaller institutions give you personalised service and invariably at a lower price
• Mortgage Brokers tend to have a closer understanding of the your situation when you need to apply for a home loan and we can offer a variety of Lenders to choose from or let us assist you. You pay no fee to the Broker because the Broker is paid by the financial institution on a commission basis. It doesnt matter if you go to the Mortgage Broker or the Bank you will get the same products,fees and features, however if you choose to go through a Mortgage Broker they will do their best to assist you and any person you may refer.

What fees am I to pay for a typical housing loan?

• Bank Fees, Government Fees, Valuation Fees, Legal Fees, Insurance Fees, Other Fees such as repairs, inspections, accounting reports etc.
• You must get a written quote for al the above and from each party before you sign any documents.

Is Negative Gearing attractive to everyone?

• It's only attractive to the individual who has a high enough taxable income. The higher the taxable income the better the returns. Get actual advice from your accountant prior to committing.
• In any case, you don't want your investment negatively geared forever. You want it to be positively geared as soon as possible. Don't forget that Capital Gains Tax is also applicable.

You must see your accountant for more information or contact us to refer you to one of our accountants.

How do I know that my Loan and other debts are under control?

• If you are paying as per the schedule then you need not be concerned.
• If you are making extra repayments now and then. You should change your repayment to weekly or fortnightly frequency
• Your expenditure is going to plan. You should review your budget annually or if your situation changes unexpectedly. Remember you do not want to default else your Credit Rating is ruined.

Please contact us and one of our staff members will contact you as soon as possible to assist you with any home loan enquiry you may have.