While loan officers work solely for a lending institution and can only offer that institution’s products, an MFAA Approved Finance Broker is able to shop around for you.
Finance broker are paid commissions by lenders to match borrowers to the right products and can negotiate a very competitive rate on your behalf, which is why half of borrowers today turn to finance broker when it comes to finding a home loan.
It depends on the lender and different lenders have different policies but still there are few lenders who have lent 95% of property value. Further please note when you borrow 95% of the property value, 5% of your contribution should be your genuine savings.
Essentially Lenders’ Mortgage Insurance gives you the opportunity to purchase a property with a smaller deposit. Lenders’ Mortgage Insurance protects the lender (not you, the borrower) should you default and the property is sold for less than the outstanding amount on the loan. LMI premiums are payable by the borrower when the amount borrowed is above a certain percentage. Some lenders will allow you to add the LMI premium to your home loan; others require you to pay it up front.
The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation.
Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria.
Refinancing is when you change your current home loan to a new one that satisfies your current financial situation. It can either be done internally (with the same lender) or externally (with a different lender).
Refinancing can allow you to access the equity of your home to cover major costs such as school fees or a family holiday. It can also allow you to renovate your property which could in turn add to its value.
Equity is the difference between the value of the property and any borrowings on that property. It may be possible to use this equity as a deposit or to increase your borrowings. When you buy a property, costs such as establishment fees, solicitor fees and stamp duty add up to a few thousand dollars. Instead of trying to find cash to pay these fees, take them into account in your borrowings.
If you earn less from an investment property than it’s costing you, you’re said to be negatively geared. The motivation to be negatively geared is that it reduces your taxable income and you accept a short-term loss in the hope of a capital gain later.