Home Loan FAQs
You are not the only ones who feel that way! We will guide you through your loan application by explaining what they mean to help you answer the form questions as accurately as possible.
For the purchase of a home you need as little as 5% of the purchase price, plus government costs such as stamp duty. Some states have government incentives to assist with a purchase as well.
We are there to hold your hand through the process, we can work out with you what amount you are able to borrow and then how to go about looking for a property and finally the process from putting in an offer to moving in.
Business Loan FAQs
We can assist you in getting finance for your car purchase through your business (subject to approval).
Equity from your home may be at a cheaper interest rate but it’s always important to consider your long term security. If you can’t make the repayments on an equipment loan they repossess the equipment, if you have borrowed against your home to buy the equipment and can’t make the repayments, they repossess your home. Consider also if you have borrowed against your home, these funds are not readily should you want to move somewhere else or upgrade your home.
Other Finance FAQs
The Australian Tax Office looks at what the equity(money) is being used for, rather than where it comes from. If you are using it for an income producing investment then most likely it’s tax deductible, however it’s always best to check with your accountant.
It depends in what context you are using them. In a scenario where you have a property that you currently reside in and you want to purchase a bigger property and move into that, whilst keeping the existing property as an investment property, they will affect the tax deductibility of the loans over the property in different ways.
Negatively Geared: This is where the borrowing / holding costs are greater than the rental income. So for example your rent is $700pm, but your rates, land tax, interest / gearing costs are $1000. This is said to be negatively geared by $300pm.
Positively Geared: Any property can be positively geared, it just depends how much cash deposit you contribute to it or how low the borrowings are against the property. So for example your rent is $700pm, but your rates, land tax, interest / gearing costs may be only $650pm, this is said to be positively geared by $50pm.
Positive Cash flow: This is where the income is greater than the expenses, regardless of gearing. Pretty much nearly every property has a positive cash flow if you don’t have any borrowings against it. Positive cash flow can be attained before tax or after. It basically means that there is a surplus of cash after expenses.
Negative Cash flow: This is where the outgoings are greater than the income [No gearing]. A term not often used, but a local example could be where the land tax, rates and maintenance exceed the rent, say like on an old property in Mosman that your retired Mum owns. So it is quite possible to have a negative cash flow property, but after Income tax is calculated the investment could become positively geared.
Desktop: is done via a computer and where the Lender uses the median price of the suburb combined with median security. No inspection is done on the property, this type of valuation is usually only used in capital cities.
Kerbside: Is when the property is inspected from the road, no one actually see’s the inside of the property and is usually when the security and price is median to the suburb.
Full Valuation: is just that, a qualified valuer appointed by the bank inspects the property and issues a written report complete with pictures and measurements. This is the most common and widely used form of valuation.
LMI is the insurance you pay to protect the lender from risks associated with granting you a loan of more than 80% of the property’s value. If you default on your loan and the property must be sold as a result, the insurance company pays the lender the shortfall if the property fails to cover the balance of the loan.
You may not have to pay LMI if you borrow 80% or less of the property’s purchase price but that is not guaranteed.
An SMSF can purchase Residential or Commercial property, with or without a loan but there are strict requirements around this.
The earlier you notify your lender the more options will be open to you. The lender will want to know why you cannot make the repayment, help you plan how to pay it and where the money will come from, and how they can help you continue to make repayments.
1. An offset account is an account that is linked to your loan account. The money you put into this account can offset the amount you own on the loan and you’ll be charged less interest the more money that goes into this account. 2. The main advantage is that is allows you to save money on the interest of your loan without actually paying the funds into the loan itself. You can also withdraw on this account at any time without penalty. However, offset accounts are usually only associated with variable loans that have higher interest rates or loans that have a lot of features, including extra fees.
The earlier you notify your lender the more options will be open to you. The lender will want to know why you cannot make the repayment, help you plan how to pay it and where the money will come from, and how they can help you continue to make repayments.
Yes, once the fixed rate has expired. If you are adamant that you want to change to variable then you will generally be charged a fee for breaking the fixed rate before it expired.
1. Extra repayments are an excellent way to pay off your mortgage faster so the answer is yes you can, but the terms and conditions may vary with individual products.
2. Making extra repayments can be as easy as setting up direct debit for a higher amount or you can make lump sum payments. However, with a fixed loan rate, there may be a limit as to how much extra you can repay.
3. Yes, but there may be fees involved with individual products.
Yes, but there may be minimum loan repayments associated with each account.
1. Firstly, it means that you know exactly how much you can spend on a home and all the uncertainty surrounding not getting a loan is non-existent. It also means that you can settle quickly, if it’s a possibility, and shows the realtor that you are serious about purchasing a home.
2. Pre-approvals are usually valid from between 3-6 months. If you have not found a property in that time, it is possible to get an extension with a few updated documents like recent pay slips.
1. It is not necessarily any harder than someone who has a company job. It can be slightly more paperwork but the main thing you will need is tax returns.
2.Definitely! And it is just a situation as this that Clever Finance Solutions excels for its clients. With almost a decade of experience, thinking outside the box to get unique clients the right loan is what Clever Finance Solutions prides itself on.
3. A Full-Doc loan is where the lender can verify your income from payslips, tax returns etc. A Low-Doc loan is for self employed applicants and is used where tax returns are not available, instead BAS statements and/or a letter signed by the accountant is used.
By law, this is a rate that all lenders must display next to their advertised interest rate and takes into account some of the fees and charges associated with the loan. It will give you a more accurate representation of the loan’s interest rate once the fees and charges are added.
