Frequently Asked Questions

This Months Hot Topic

Recommended iPad and iPhone apps?

How do I check my credit file?

How much can I borrow and how much will I have to re-pay?

What if I have bad credit history?

Am I eligible for the First Home Owners Grant (FHOG)?

What if have no deposit but I can afford the repayments!?

What happens after I apply for a loan with Strategy Loans?

Why don't I just go direct to my bank for a loan?

How do we meet up?

What is the term LVR?

What is the term LMI?

 

Call today 0423783341 to find the more answers or complete our Contact Us and we can communicate via email

 

 

Recommended iPad and iPhone apps?

I recommend some iPad and iPhone apps as my calculators are in Flash and don't work on apple devices.

Commission - This calculator by Alex Robinson works to calculate the commission charge for selling your property in Queensland under a standard REIQ commission agreement. With this calculator you enter your sale price and it will calculate the commission costs. You can always use the method of adding 18000 to the sale price and dividing by 40. Then times 1.1 for GST. - e.g. Commission charge = (400,000 + 18,000)/40)*1.1 = $11,495.

IncTaxLite - This app by CCH Australia Limited calculates the tax on gross income. Enter your name, enter your annual salary from your employment contract e.g. $55,000 annual base salary, then enter any tax offsets. Confirm your private health, HECS or HELP debt & relationship status, then hit 'calculate' at the top of the app. You will see the charges, on a basic situation, and your net income will be displayed.

My Mortgage - By Vow Financial Group, this app will assist you with how much you can borrow and other mortgage related calculations. I mainly use this app for 'Stamp Duty' and 'Home Loan Repayments'. You can enter your loan amount, interest rate, term, repayment frequency and your repayment will be displayed. The main purpose is to get a feel for repayments and this will assist you in budgeting for your next purchase.

 Back to Top

How do I check my credit file?

If you are unsure whether you have any marks on your credit file, I recommend using www.mycreditfile.com.au, which is a report the lenders will also search. This report is available free -if you are prepared to wait a few days - or for a fee they will generate the report faster. To access the report follow this link, provide your details, and a report will be emailed to you. Then is you need assistance reading this report I am available to discuss and explain any issues you find. The report will show any credit enquiries, for example a store purchase you did 12 months ago. Lenders will compare this report with what we advise in the loan application and be looking for any outstanding credit issues we may have overlooked. For example, a car lease with Toyota Finance, the lender may want to confirm repayments are up to date before they approve your home loan.

 

Back to Top

 

How much can I borrow and how much will I have to re-pay?

Internet calculators are a good start, but are also very basic. They can’t understand your full financial position or offer advice to increase your borrowing capacity. To find out exactly how much you can borrow email me directly and we can arrange a time to meet and discuss the many options available.  In a basic scenario lenders are looking at lending around five (5) times your base income.

Repayments can also be changed to suit your individual requirements; you could reduce your risk and maintain a fixed repayment for many years with a fixed rate or you could also look at interest only for a short period to assist in cash flow during the first years of the loan.

 

Back to Top

What if I have bad credit history?

If you have a concern that your credit file may have an unpaid debt raised against your name, it is imperative that it be explained to the lender before we submit the loan application.  Today you can receive a free report from mycreditfile.com.au direct to your email which will detail all your credit history and if any unpaid debts are still on your file.  If you have a recently paid overdue debt, lending is will still be possible. Don’t take one lenders knock back as the only alternative to securing your home loan.

 

Back to Top

Am I eligible for the First Home Owners Grant (FHOG)?

To see if you are eligible for the First Home Owners Grant (FHOG), you can visit the Office of State Revenue (OSR) in your state. In Queensland the basic criteria is never owning a place of residence in Australia and being over 18 years old.  I can assist you in completing the First Home Owners Grant Form as an approved agent for the OSR and ensure the grant and concessions are available at settlement of your property.

Back to Top

What is LVR?

The term LVR is an acronym for “Loan to Value Ratio”. LVR is simply the amount you are borrowing from a lender expressed as a percentage compared to the security or purchase price. For example, if you are buying a property which has a purchase price of $400,000 and you are borrowing $300,000, then the LVR would be 75% or another way to look at it is you are borrowing 75% of the property's value with 25% equity.

LVR is a simple calculation; (loan amount then divide the security)*100 - e.g. (300,000 / 400,000)*100 = 75%

LVR has three main consequences:

(1) How readily lenders will approve your home loan application. Generally speaking, the lower the LVR, the easier you will find it to get the approval of the lender.

(2) Whether or not you will have to pay Lenders' Mortgage Insurance (LMI). As a general rule, LMI is payable on full doc loans when the LVR is above 80%.

(3) Due to the recent overseas financial concerns and being in a slow property market, some lenders are offering larger discounts for larger equity in property. Lenders will discount the rate further if you have more than 25% deposit or up to 75% LVR.

Back to Top

What if I have no deposit but I can afford the repayments!?

If you have no deposit many options are still available to purchase a home. Most lenders require genuine savings which can be defined as 'a borrower’s demonstrated savings pattern over a minimum 3 month period'. I have included a more detailed explanation to how genuine savings is achieved below, including the unacceptable forms. Although some lenders will accept as little as 5% deposit with a non-genuine policy. A non-genuine policy would allow you to purchase your home sooner as funds could come from, sold items such as a second car or a non-repayable & non-refundable gift.

 

  • $357,000 Purchase price
    • $0 Stamp Duty concession/exemption for first home
    • $105 Mortgage Registration o $105 Land Transfer
    • $890 Solicitor
    • $1,100 Total Costs "
  • $358,100 Settlement required funds
    • $339,150 Max loan amount at 95% LVR (*see explanation below)
    • $18,950 Required to complete purchase ($358,100 - $339,150)
    • $9,584 LMI (*see explanation below) "
  • $348,734 Capitalised LMI (Total new loan amount)

(Total required $358,100 less your total contribution $18,950 = $339,950) (New Loan Amount $339,950 plus LMI $9,584 = $348,734)

In this example LMI which is *Lenders Mortgage Insurance can be capitalised or explained another way is the ability to add on the LMI charge to the loan.

*Lenders' Mortgage Insurance (LMI) A once-off premium paid per loan per security, usually when 20% deposit is not provided. In the event that the borrower defaults on the mortgage and the property is repossessed by the lender and sold to repay the loan, the lenders mortgage insurance covers the difference between the re-sale amount and the original mortgage amount. The insurance protects the lender only against the loss. Also importantly to be understood that the insurer may also seek compensation from you the borrower.

Who is insured with LMI - It is actually your lender, not you or any guarantor, who is covered by LMI. LMI should not be mistaken for Mortgage Protection Insurance, which is personal insurance to cover your mortgage repayments in the event of death, sickness, unemployment or disability.

Is the LMI premium refundable if the loan is repaid early? It depends on the circumstances - your broker can advise whether a partial refund of the insurance premium is applicable in your case.

Genuine Savings can be demonstrated through the provision of:

  • Personal savings (copies of bank statements or passbook savings; internet statements can be used as long as there is one original statement);
  • Term deposit (copy of statement, certificate showing funds held);
  • Sale of real estate (property must be held in the name of at least one of the borrowers; exception to this is property held in a company name with the loan in the name of the directors);
  • Sale of shares in publicly listed companies or units in a Managed Investment Scheme net of tax (copies of CHESS or issuer sponsored statements, share certificates or managed fund statements)

Unacceptable forms of Genuine Savings include

  • Sale of assets other than real estate or shares;
  • Government grants (e.g. First Home Owners Grant);
  • Loans or borrowed equity – excluding equity used from existing real estate assets;
  • Windfall gains (gambling, inheritance, compensation etc);
  • Advance payments of a personal loan;
  • Sale discounts on a property to prompt settlement;
  • Unconfirmed deposit sources;
  • Bulk savings deposits inconsistent with income;
  • Gifts; and
  • Superannuation Tax Refunds and Bonuses.

 

Back to Top

What other services can Strategy Loans Offer?

Strategy Loans is always available to assist you further. It may be in the way of loan insurance or further lending for an investment property or renovations. I can also re-value your property to get you the best loan possible and complete a market analysis which will show you recent comparible sales in your area. As a past Real Estate Agent, I can give you detailed information on purchasing or selling a property, including contract terms and negotiations. Again these services are at no charge.

 

Back to Top

Why don't I just go direct to my bank for a loan?

 If you go directly to a bank they may not understand your complete financial structure and make you fit into one of their products which in the long term is not the best option, but is all they have available. In fact setting up for the future, having the correct financial structure and being assisted throughout the entire process is invaluable. Long term finance solutions are looked at when we meet and issues like turning current home into an investment property later on, further advances to do renovations when children come into the picture are just some of the considerations which will be discussed at our interview.

 

Back to Top

How do we meet up?

Call text or email me on 0423783341, danielpowell@strategyloans.com, and we can arrange a time to meet to discuss the options available to you now and in the future.

 

 Back to Top

This Quarters Hot Topic!

Low Interest Rates - It's all anyone is talking about!

Daniel Powell from Strategy Loans suggests if you are thinking of buying a property and getting a home loan, there has never been a better time to do so than now. Interest rates at an all time low or will they go lower?

Most lenders Standard Variable Rate (SVR) is at 6.60%, basic loans are discounted to 5.91% and 1 Year fixed from 5.19%. The lower fixed rate on offer indicates the Reserve Bank possible further reductions, it would be a wise move to get into the market and secure a loan now. In fact, taking advantage of these low rates could save you thousands in interest repayments.

If you currently have a mortgage, now is also a good time to re-look at its structure. Have you got the best interest rate possible? Are you being charged a monthly account fee? Is your lender still competitive? He believes it is possible to better your current deal by negotiating with your existing lender or moving to a new lender.

If you are just starting out in the market or looking to get an investment property, we can discuss your strategy and options, including a comprehensive comparison of the major and second-tier lenders.

Daniel can help you understand LVR - Loan Value Ratio - what the banks and lenders use to decide whether they will approve your loan, and lastly take a look at your options should you have only a small or no deposit, but can show the ability to repay a loan.

Loan Structure and Scenario

Based on 30 year loan in the amount of $200,000 the monthly repayments at 6.80% (CR 6.94%) are $1,303 lower your rate to 5.91% (CR 5.91%) reduces repayments to $1,187 at a saving of $116 per month.

Note (The Fine Print): All loans are subject to the lenders normal terms and conditions. Loan qualification criteria apply. The "CR" or Comparison rate is the actual rate you are paying including account keeping fees and the original application charge. All CR's are calculated on the basis of secured credit of $150,000 over a 25 year term. Strategy Loans has an Australian Credit Licence No: 384250 which enable representatives to engage in credit activities. WARNING: Different amounts and terms will result in different comparison rates 'CR'. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

 Back to Top

 

Home | Calculator | Process | Types | FAQ | Contact Us | Email |