Frequently Asked QuestionsSmartline Mandurah
How much do we charge?
Our service is free. All banks pay us a fee from their profits, for giving them a loan. This fee is not passed on to you by the bank, thus whatever a bank can offer so can we. This in turn gives you so many more options and often a loan that suits exactly what you want.
What is the latest interest rate?
We can tell you on a given day, just call us. Interest rates change constantly within the 28 differing lending providers we have available to us, so to publish any rate would quickly be old news. Also a loan is not always about the rate. The best rate can come with many fees and costs of setting up the loan. Every bank is different. Please don’t just look at an interest rate – call us.
How much can I borrow?
There are some 200 differing points to complete in a finance application; these mostly are to do with how much you can borrow.
Firstly, you must have some deposit, or some hurt money or some fat in the game. OR you must have something to lose or some way the bank can get their money back should you stop paying back the loan.
Then your capacity to borrow is also calculated on your income and your current expenses, children, credit cards, current loans, etc.
Please call us regarding “how much can I borrow” and we will give you a fair indication on the amount.
How much deposit do I need?
Generally, a minimum of 5% of the purchase price. The more deposit you have the cheaper the interest rate.
Shall I fix the interest rate or stay on variable?
This is the hardest question we get and there is no sure answer.
If you fix the rate you will pay that rate for the period agreed on. Should you want to get out of the rate early there will be penalties to pay as you are breaking an agreement. Should the variable rate go down you will still pay the agreed rate; should the variable rate go up you will still pay the agreed rate.
If you don’t fix you are left open to the market fluctuations both up and down.
When a client is unsure, as we never have the answer, we say to fix half and keep half variable, as at least that way you have a bit in each camp.
How much do I need to earn?
This depends on your loan size, expenses and income. If you are reading this and want the answer please, fill out the enquiry form telling us how much you want to borrow, what other loans you have and how many children, then we will email back an indication for you.
What are my repayments?
How much does it cost for a loan?
Every loan and person’s circumstances are different. You will need a deposit, maybe an upfront fee, and money to pay insurances etc. Roughly you need 10% of the purchase price, but we did say “roughly”. Don’t get depressed if you haven’t got 10% – give us a call and we will work with you to put you in a position to purchase.
Can I get a pre-approval?
Yes, in fact it’s a fantastic idea. We will assess your borrowing capacity and even present your loan to the bank, so you can have formal approval to purchase, subject to the value of the property. A pre-approval is a fantastic bargaining tool when purchasing as it proves you have the capacity to purchase, you are serious, and any offer you put forward will have good strength.
What if a bank has declined my application?
We see this a lot. A client goes to a bank and their loan is declined. They come to us and we get it approved. Why is that?
- We have a vast amount of experience in our office. With our combined experience we have a lot more to offer than a bank officer.
- We have 28 different banks to work with. Each and every one has different rules. Some will decline you, others will love you. We will do our best to find the loan that is ideal for your needs.
- A bank person is on wages. They get paid whether you get a loan or not, while we only get paid if you get a loan. Who is going to work the hardest to get you a loan?
What is Lenders Mortgage Insurance? ( LMI )
LMI is an insurance that you pay that insures the bank against you defaulting. Although you make a one-off payment for the life of the loan it does not insure you.
If you are borrowing greater than 80% of the value of a property you will pay LMI. Or you will pay a much higher interest rate with a select few banks that have a very high lending criteria.
If you are borrowing less than 80% you will not pay LMI.
This is the biggest reason why it should be every potential home owner’s aim to own 20% of the value of their property.
I’m self-employed can I get a home loan?
Yes you can. It is a little harder because you are self-employed, but it is possible. You will need a minimum of 1 year’s trading and a tax return that shows 12 months of earnings.
The banks will look at your business income but it must be making money and have no tax debt.
Again there are just so many variables so please give us a call to discuss your situation.
What’s the difference between a loan with a redraw and one with an offset?
A redraw is access to funds you have paid over and above your normal repayments. There are home loans available that allow you to simply draw back or take out the amount you are in advance.
Because the redraw amount you are in front reduces the amount owed, your interest is less. In general, a loan with redraw will have a cheaper interest rate than one with an offset.
An offset account will have a credit balance where no interest is paid. The credit balance is effectively deducted from the balance of your home loan and then your home loan interest is charged on the lesser figure. Loans that have an offset account mostly have a higher interest rate. Often some $40,000 to $50,000 must be in the account to make it viable having an offset account. Plus you will more than likely be charged a fee for the offset account.
I always find it easier to spend money when I see a credit balance, so for us it’s a redraw type loan (but others are often stronger than I; just sayin’).