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Ask These 10 Questions Before You Apply for Finance

Table of Contents

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  1. What type of loan package will suit me? 

Make sure to review all the asset loan features. Check if you can redraw or even make extra payments. 

  1. What will be the interest rate? 

See if it is fixed or variable. This will allow you to determine how much you need to pay over the period of your loan. 

  1. How much money can you borrow? 

The answer depends on the lender. Ideally, you can  borrow up to 80 – 95% of the property’s value. However, you must consider your comfort level when it comes to paying every month. 

  1. How much deposit should I pay? 

In most cases, lenders will require a minimum deposit of 5%. If your deposit is less than 20%, you may be required to pay Lenders Mortgage Insurance. We recommend having a higher deposit to save you in paying Lenders Mortgage Insurance

  1. What are the up-front fees should I prepare for? 

Discuss everything involved when taking out a loan. These include loan application fees and government charges such as stamp duty, mortgage transfer, mortgage registration and Certificate of Title search fees. 

  1. What are the other fees that I should watch out for? 

Ensure that you fully understand all the fees and charges associated with the loan. A good example is learning whether there are monthly fees or charges to redraw your funds. 

  1. What is the overall loan cost? 

You can always check for the comparison rate for the loan you wish to apply for. Include all the interest rate and fees during the life of the loan. This will help you compare other loans better. 

  1. What are the benefits I could enjoy? 

Confirm with your Sydney Finance Broker if there are benefits when you take out a loan. In some cases, lenders can waive loan establishment fees, or they can even provide discounts on loans and bonus interest on term deposit rates. 

  1. Can I pay the loan off earlier than the original agreed term? 

There’s a big possibility that you would refinance your mortgage before the term is complete. Check with your lender if they will charge a penalty for this. 

  1. How will the repayments effect if the interest rates increased

Consider calculating how much your repayments will be if there’s a sudden increase

 

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of interest rate. As always, you should know your threshold and be able to pay off your loan comfortably.

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