Question 1

How long does a loan application take?

Accepted Answer

Typically between 2-5 days, but it depends on the lender. We're always pushing your file forward and update you at every stage.

Question 2

What is ‘servicing’ and ‘borrowing capacity’?

Accepted Answer

Servicing is bank terminology for the repayments they deem you can make each month. Borrowing capacity is the maximum loan a bank will lend to you based on your servicing.

We can improve your servicing in a number ways - closing credit cards, paying out and closing personal, car and HELP loans, getting you a lower interest rate, borrowing over a longer period of time.

Different lenders assess income and expenses in different ways, meaning some will treat two people making $100,000 a year differently.

Your position is unique, and the best strategy for you should be created in context to your position and your future goals.

Question 3

What deposit will I need?

Accepted Answer

20% of the purchase price + gov. and legal fees (costs) is ideal. Eligible first home buyers need just 5% + costs.

If you take out Lender's Mortgage Insurance (LMI), you need 8-12% + costs.

Question 4

Can I use equity in my home for my deposit?

Accepted Answer

Yes, if you have enough. Lender's allow you to borrow up to 80% of your homes value before charging you LMI.

I.e. Your home's worth $1M - you can borrow up to $800k without LMI. If you owe $500k, then that's $300k available for your deposit.

Question 5

What's a pre-approval? Should I get one?

Accepted Answer

A pre-approval is when a bank conditionally approves you for a loan subject to finding a suitable property to buy.

They last 3-6 months, however they aren't all the same.

Some pre-approvals are fully assessed, others are not. The latter are re-assessed when you buy a property, so if there are any changes (rates go up), your original approval might not be valid.

Most people should get pre-approved. The reason you might not is if you're spending significantly under what you can afford to buy.

Question 6

What costs are involved in buying a home?

Accepted Answer

The standard costs are Gov. Fees (incl. Stamp Duty), Legal Fees and bank fees, and these will vary depending on if you’re a First Home Buyer or not, investing or buying your own home etc.. A simple estimation of the costs to buy your home in QLD is this: Gov. Fees 3.9% of purchase price, Legal & Miscellaneous Fees $5,000, Bank Fees $500.

Question 7

What if I’ve been told I’m don't qualify for a loan?

Accepted Answer

Getting a “no” and even a decline, does not mean you’re ineligible. Your position is unique, and every bank has different lending policies. What sets us apart is our ability to find the right lender for your position... or we'll tell you exactly how you can become eligible!

Question 8

Why should I use a broker instead of going straight to the bank?

Accepted Answer

A good broker creates solutions for your unique circumstances, opening up opportunities for you to achieve your goals today. We do this by looking at lending policies from multiple banks.

We'll then compare dozens of lenders, ensuring you get the best outcome for your needs.

The Big 4 banks have all announced that brokers are costing them profit, that they make more money if borrowers go direct. There’s nothing wrong with going straight to your bank, but it'll usually cost you more.

Question 9

Does it cost money to use a Mortgage Broker? How are you paid?

Accepted Answer

Mortgage Brokers are paid a bigger upfront and smaller recurring commission by the bank for writing your loan. The bank pays this to brokers instead of employing their own sales rep and covering their overheads.

Some brokers charge a fee for their service, often because they're providing substantial value delivering a unique solution to you.

This stands in contrast to brokers who focus on ‘the cheapest interest rates’ - all brokers have access to all the same products.

At the Home Buyers Club, we’ve found our clients care more about getting approved to buy their dream home, than they do saving 0.1% on their rate but missing out on the home.

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