Got Questions?
Loan FAQs
While these answers provide a helpful starting point for Australian borrowers, every financial situation is unique. These are general insights to guide your journey, but David is available to provide tailored advice specific to your goals and borrowing capacity.
Mortgage Basics FAQs
How much deposit do I really need?
In Australia, most lenders prefer a 20% deposit to avoid Lenders Mortgage Insurance (LMI). However, many borrowers start with as little as 5%. I can help you weigh up the cost of LMI versus the benefit of entering the property market sooner.
How is my borrowing capacity calculated?
Lenders look at your income, existing debts, and living expenses using a 'serviceability floor' rate. This ensures you can still afford repayments if interest rates rise. I can provide a more accurate figure based on your specific situation.
Fixed vs Variable: Which is better?
Fixed rates offer certainty with set repayments, while variable rates provide more flexibility and features like offset accounts. Many Australians choose to 'split' their loan to get the best of both worlds.
What grants are available for first home buyers?
Depending on your state, you might be eligible for the First Home Owner Grant or stamp duty concessions. There are also federal schemes like the Home Guarantee Scheme that allow you to buy with a smaller deposit without paying LMI.
How does an offset account work?
An offset account is a savings account linked to your home loan. The balance in this account 'offsets' your loan principal, meaning you only pay interest on the difference, potentially saving you thousands over the life of the loan.
What is stamp duty and how much is it?
Stamp duty is a state government tax on property purchases. The amount varies significantly between states and property values. I can use a local calculator to give you a precise estimate for your target suburb.
How long does the home loan approval process typically take?
In most cases, we see approval times of 2 to 5 business days, though this can vary depending on the lender's current backlog and the complexity of your application. We'll always keep you updated at every stage.
What is pre-approval and how long is it valid for?
Pre-approval gives you a clear idea of what you can borrow, allowing you to bid with confidence. Generally, Australian lenders grant pre-approvals for 90 days, provided your financial situation doesn't change significantly in that time.
What documents do I need to provide for my application?
Standard requirements include recent payslips, bank statements from the last 3–6 months, proof of identity, and details of any existing debts. For self-employed borrowers, we'll typically need the last two years of tax returns.
How does the property valuation process work?
A valuation is conducted by the lender to ensure the property is worth the purchase price. This can be an automated desktop valuation or a physical inspection. It's a key requirement before formal approval is granted.
What happens if my loan application is declined?
Don’t panic. We first work with the lender to understand the exact reason—whether it’s valuation, credit history, or servicing. From there, we can look at alternative lenders or adjusting the application to better meet requirements.
Optimise Your Loan
Thinking about switching lenders? Refinancing can be a powerful tool to reduce your monthly repayments or access equity. Here's what you need to know about making the move.
When is the best time to refinance?
We recommend an annual health check. If your current rate is higher than what's available for new customers, or your financial situation has improved significantly, it's worth exploring your options.
What are the typical costs of refinancing?
Costs can include discharge fees from your current lender, application fees, and government registration costs. However, many lenders offer cashback incentives that often cover these expenses entirely.
Will I be charged a break fee for switching?
Break fees generally only apply if you are currently on a fixed-rate loan. If you are on a variable rate, you can typically switch lenders at any time without incurring significant break penalties.
What are the main benefits of switching lenders?
Beyond a lower interest rate, benefits include better loan features (like offset accounts), debt consolidation to reduce overall interest, and potentially superior customer service or digital tools.
Still have questions?
If your specific situation isn't listed here, David is ready to provide tailored advice to help you proceed with confidence. Get in touch to clarify your options.