Q: What is the difference between fixed and variable interest rates?
A: Fixed rates do not change for the duration it has been fixed, so your repayments will stay the same for the period you have ‘fixed’ your loan for. The difference between fixed and variable rates is that variable rates are subject to change at any time which will effect your fortnightly or monthly repayments… You can fix your loan for initial periods like 1,2,3,4,5,7,10 or 15 years but no longer in Australia.
Q: How much can I borrow?
A: This will vary from lender to lender based on their unique lending policies and calculation models. Unfortunately there is no standard policy or acceptable borrowing amount across different lenders. We can generally determine your borrowing ability using the policies of the top 3 or 4 lenders in the market and we can use a software modelling technique to compare all the lenders available to us. If your borowing need is very close to the maximums allowed, then we need to get more specific about your budget and income to provide you an accurate quote and lending solution. Have a look at our calculators section.
Q: Which lenders do you deal with?
A: We deal with the major banks, regional banks, non banks and some building societies and credit unions. It is most likely we deal with your usual savings bank, and can negotiate with them on your behalf, as well as deal with many other lending alternatives. There are over 30 lenders available to us. Unfortunately you are unlikley to receive any special treatment for being a saver with your bank for so many years.
Q: How long is my mortgage for? What is the loan term?
A: You can generally choose a loan term that you desire, although 30 years is the most common length of time used for home mortgage financing. You can choose 5, 10, 15, 20, 25, 30 and now even 40 year home loan terms. Note that over 30 years your repayments per month are likely to be much more comfortable than over 5 years ! Some lenders will let you do the years in between these ones also, although it is not very common. The 40 year loan term is still relatively new to the market but the rest have been around for some time.
Q: What is the best mortgage type?
A: There are many mortgage options available for a borrower today. Based on your needs and your interest or desire for certain loan features and/or flexibility, we can source the best options available in the market at the time you call or email us.
There are many “best rate” advertised loans, that don’t provide the features you may want or need. They may not provide the service you want, or the financial strength you want to see in the organisation you are dealing with. There is no need for a mortgage lender to have all your accounts, be it savings, cheque, internet accounts etc. In fact you rarely receive any benefit from a bank for having your accounts managed in this way.
Q: How do I know which type of mortgage is best for me?
A: There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture, your need for flexibility and how long you intend to keep your property. We can help you evaluate your choices to make the decision that is right for you. A mortgage is a very personal thing – so the best rate, or the mortgage your friend has, is not necessarily the one for you, or one that will meet your needs now and into the future.
Q: What does my mortgage payment include?
A: For most homeowners, the monthly mortgage payments includes the principal portion, being the actual gradual repayment of the amount borrowed; the Interest portion, being payment to the lender in return for the amount borrowed, and any fees for managing the mortgage process which can be monthly or annual fees or no fees at all.
Q: What can a broker do for me, that a bank cannot?
A: Brokers add value to possibly the most criticial financial decision of your life. How?
- A broker like Aussie Finance and Property can negotiate with knowledge between different lenders. A lender will listen to informed comment about better rates or conditions on similar products available at other lenders and sometimes alter their rate or fees before they make you an offer. Since a broker has at his fingertips the latest various offers from various lenders, and a knowledge of their credit policies he can be the most effective in this negotiating role.
- Inform you about what is really going on in the market right now. You may have an offer from your long-time savings bank partner, or your best friend may have that loan for themselves – and it sounds like a good one, however how do you really know if it’s right for you? Who has time to seek out all the options at other lenders, contact them all for the details, terms and conditions of their loans, and then request them to calculate if you meet their lending criteria and will lend you the precise amount you need and more? A broker can do this and summarise your options usually within 48 hours.
- Assess your borrowing ability. One internet calculator designed to show you what you can borrow generally, will not reveal what you can borrow specifically, at the lender of your choice/the lender with the best deal. Each lender has a different calculator of their own ! brokers will apply the specific relevant calculations when assessing all your options. The amount you can borrow is different at every lender!
- Do the legwork for you. A broker also gets paid because he will persevere through all the bureacratic, credit-checking, question-asking, administrative, frustrating questions and processes created by banks to take a loan application from the start, to a settled and paid loan at the finish, usually 6 weeks later. This is not something the average person can quickly and easily understand or be comfortable with, especially considering one does it pretty rarely.
- Anticipate and offer solutions. Sometimes property purchases do not go smoothly. The vendor may be restrictive or the property valuation may give a poor result, throwing in jeopardy your application or even resulting in a decline of your application regardless of your credit history or income. A broker can anticipate some of these issues, and provide alternative solutions, or switch lenders where appropriate, to find you the funds you need to complete your purchase in a fast and effective way. This may be difficult to achieve in practice if you are acting for yourself.
Q: How can I apply or get more information?
A: Contact details: please email: firstname.lastname@example.org or call one of the numbers below on the website footer.