Home Loan Info Centre

All our frequently asked questions and home loan info for every stage of your home loan journey from an experienced Perth mortgage broker.

Mortgage Broker Perth

We’re here to make sure your mortgage is a good fit for every life stage.

Got Questions. We’ve got Answers.

A part of our job as an award winning Perth mortgage broker is to empower you with knowledge and home loan info so you can feel confident you’re making informed decisions. Whether you’re needing a first homebuyer loan, need a bridging loan, want to access equity or a top up loan for renovating, separating from your partner, looking for a guarantor loan to help your kids buy a home, buying an investment property, or simply looking to refinance your home loan, there will always be questions you need answered. Here’s some of our most frequently asked home loan and property questions. If you have one of your own to add, please contact us and ask away.

What does a Mortgage Broker do?

A mortgage broker is someone you engage to help guide you through the home loan process. They spend the time with you upfront to get an accurate picture of your home loan needs, and then they match that with the most suitable option from over hundreds of options from 50+ lenders. From there, the mortgage broker will work with you and submit the loan application on your behalf, acting as a liaison between you, the lender, the real estate agents and settlement agent, to ensure all the details are taken care of. 

A good mortgage broker will also stay in touch for years to come, ensuring that you continue to receive a competitive deal on your interest rate and the loan features are compatible with your ever changing needs.  

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I’m a first home buyer

This is the number one question that people want to know. And for good reason. This is crucial information to know BEFORE you start your property search. It’s important to understand your budget to ensure you’re not wasting time and energy looking at properties you can’t afford (yet!!)
We can give you an approximate idea of how much you can borrow over the phone after you answer a few questions. You can expect us to ask questions about your occupation, age, annual income, if you have any dependents, and any liabilities and expenses you have like credit cards, personal loans or a car loan. From there, we can give you an idea of your borrowing capacity. 

Before you apply for a home loan, you need to be prepared with a cash deposit. The deposit covers a percentage of the purchase price, while the home loan covers the remaining amount. 
Most home loan lenders will lend up to 80% of the property value, meaning your deposit would need to be 20%. For example, a property of $400,000, would require a cash deposit of $80,000. You may still be able to secure a home loan with a minimum of 10% deposit. There may be other options available to you depending on your circumstances. Get in touch with us to discuss your home loan deposit options.

In some cases, lenders will allow you to borrow up to 95% of the property’s value. So depending on the lender and the home loan product, you may be eligible to come up with a smaller deposit from as low as 5%.
However, this increases the risk associated with lending to you. If interest rates rise or you have some unexpected expenses arise, then you are a risk for defaulting on your loan repayments. To protect themselves against this increased risk, the lender will likely require you to pay what is called Lenders Mortgage Insurance if your deposit is less than 20%.
You can pay your LMI as an upfront cost or, depending on how much LMI you have to pay, you can add it to your home loan amount.

The first home owner grant (FHOG) is a one-off payment of $10,000 designed to assist first home buyers to buy or build a new residential property for use as their principal place of residence. 
If you are a first home owner, you may qualify for the grant if you are purchasing or building a new home. A home that has been substantially renovated may be considered a new home. The grant is not available for the purchase of an established home or for renovations to an existing home.
There are eligibility requirements that you must satisfy in order to receive this grant. Get in touch with us today to find out exactly what the requirements are and if you are eligible. Alternatively, you can find out all the detailed information here. 
First home buyers may also be eligible to have their stamp duty waived on a purchase of any home valued up to $430,000. Discounted or concessional rates of stamp duty apply for homes valued between $430,001 and $530,000 for your principal place of residence.
 

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I want to refinance

The main reasons people may refinance their home loan are to:
• Lower repayments
• Lower their interest rate
• Change structure (e.g add offset account)
• Change product (change to investment loans)
• No longer satisfied with current bank
• Increase facility to invest or for renovations
• Access increased equity
• Fixed period or interest only period expiring
• Increase borrowing capacity
• Consolidate loans and debt

There will usually be some costs associated with refinancing but they are highly variable depending on your circumstances. The costs of these different fees and whether or not they are even charged at all will depend on the lender. Using a broker will increase your chances of having some (or even all) of the fees waived. 
Of course, if you’re refinancing we would sit down with you and go through all the various scenarios and any associated costs vs savings before proceeding. 
However, it is important to understand some of the fees to be aware of and enquire about include Discharge fees, Application fees, Valuation fees, Land registration fees, Lenders Mortgage Insurance (LMI), Ongoing fees, and Break fees.

Be organised and ready to refinance. Otherwise, you might find your lender automatically reverts your mortgage to their standard variable rate (which may or may not be competitive). It’s a good idea to be proactive, to be ready to change lenders or home loan products depending on your situation. It’s likely that things have changed significantly depending on your fixed term, and your financial goals and plans have probably changed too. 

A fixed home loan is a type of mortgage loan where the interest rate remains fixed for the length of the term agreed. This is different from variable interest rate home loans, which can change as a result of market conditions and the cash rate set by the Reserve Bank of Australia (RBA).
There is no absolute right or wrong answer here, and it is very dependent on your needs and situation for the foreseeable future. 
By taking out a fixed interest home loan, a borrower may be able to avoid rising interest rates and enjoy greater financial security and stability, allowing you to budget more accurately with set mortgage repayments (for the fixed term).
However, some of the ‘cons’ of fixed rate loans include less flexibility, not impacted by rate cuts, that the term will end, and there may be break costs involved if you refinance out of the specified term. 
We can help you decide whether it is the right thing for you at this point in time by going through all your options. 

Your home equity is the difference between your property’s market value and the balance of your mortgage. If you’ve owned your home for a few years, you may have built up some equity in your property that can be leveraged for renovating your home or even purchasing an investment property.
The first step is to determine the amount of equity available in your property using the estimated market value of your home – commonly based on comparable sales within your area or a real estate agent valuation, less the balance of your current loans secured by the property.
From there you would work out how much money is required to achieve your plans. You may or may not be able to access the full amount of equity that’s available, and your servicing capability will still play a part in what’s possible. 
We can help put you in touch with real estate professionals or even organise a property valuation on your behalf to find out your current equity position. 

I want to buy my next home

You’re looking to buy your next home, which may mean you’re selling first, or perhaps you can use some equity in your existing home to buy an investment property.
As you can imagine, there’s a lot of different scenarios. We can give you an approximate idea of how much you can borrow over the phone after you answer a few questions about your occupation, age, employment status, income, family situation, and any liabilities and expenses you have like credit cards, personal loans or a car loan. That will give you an idea of what you can comfortable afford to borrow before you start looking for a new home.  
If you’re intending to keep your home as security for purchasing an investment property, we can help to arrange a property valuation in order to ascertain the current value of your home and therefore the usable equity. 
You might find it useful to read through our blog articles for detailed information including how banks calculate living expenses.

This will depend on your unique situation and, largely, your borrowing capacity, liabilities, and dependents. If you co-owned property with your ex-partner, an agreement would likely have to be reached with regards to that before you were going to move onto purchasing your own. 
While it is possible to continue to share the mortgage after divorce, it is generally not feasible long term. 
Some options that people find useful to consider in this situation include:
• Buying out the property share owned by your ex-partner
• 
Selling your property share to your ex-partner

• Selling the home and sharing the profits

There is no absolute right or wrong answer here, and it is very dependent on your needs and situation for the foreseeable future. Once we’ve looked at your unique situation as well as spoken about your short and long term goals, we can work out which option would be most suitable for you.

If you’re intending to keep your home as security for purchasing an investment property, we can help to arrange a property valuation in order to ascertain the current value of your home and therefore the usable equity. Whether it is possible or not will depend on factors including your income and liabilities which will determine if you can service another loan.

A bridging loan, or bridging finance, is a short-term loan that can help you with the purchase of a new property while you sell your current home.

Put simply, a bridging loan is a line of credit to cover the gap between purchasing the new property and receiving funds from the sale of the other property. 

Bridging finance may make purchasing a new home possible for some, but it is not the best option for everyone and it’s important to understand the pro’s and cons. You can read more about bridging loans here.

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applying for a home loan

As your mortgage broker, we’ll make sure you’re armed with knowledge and in a great position to have your first home loan approved for your first home. We’ve broken down the home loan application process step-by-step, so you can be confident you understand what’s happening and when, avoid delays and confusion and enjoy the process as much as possible!

01

Initial interview

At this meeting, we’ll talk about your goals and aspirations, as well as your current liabilities to determine how much you can borrow and how much deposit you will need before we match you with the most suitable home loan product and lender. It will help if you have access to all your current bank statements and have an accurate idea (along with proof if possible) of your current monthly outgoings.

02

Loan application submitted 

If you choose to go ahead, we will lodge your home loan application as soon as possible, along with all the required documentation which may include things like pay slips, tax returns and bank statements, and your full ID. We will outline everything that is required during or after your initial meeting. 

03

Loan approved or pre-approved

We’ll contact you as soon as we have any response from the lender. Your loan may be unconditionally or conditionally approved at this point, which means they may require more information from us or we may be clear to move to the next stage of the loan process. 
In the instance that your application is declined, we will be in touch to discuss your options and next steps. This could just mean that you need to save a bit more deposit or clear some exisiting debt. Every situation is different, and a “no” this time doesn’t mean it’s game over. 

04

Loan documentation

In the instance that your loan is approved, the lender will send out documents for you to sign. It’s important that you read and sign the documents promptly to avoid any delays which could impact your settlement. We will more than likely receive the documents on your behalf and arrange to meet with you again to go through them and help you to complete them correctly.

05

Arrange property insurance 

You may need to arrange insurance for the property you are purchasing with the lender listed as an interested party. Once you have organised this insurance (we can help you to obtain quotes if necessary) you should provide a copy of the certificate of insurance to your broker to pass on and enable you to proceed to settlement.

06

Funds to complete

Your settlement agent will be in touch to ensure that any funds required to complete settlement are received from you or that the lender has authority to withdraw it from your bank. If there is anything to pay, you would have discussed this amount previously with your broker. 

07

Preparing for settlement

When settlement occurs, you take full ownership of the property and the mortgage. We will let you know when your first mortgage repayment will be due, along with all the other essential information about your loan. If you have any additional questions at this point, we are here to answer them all and make sure you are happy and comfortable with everything. From there, we will continue to touch base with you from time to time to make sure everything is running smoothly for you. 

Do you have more questions?

As one of Perths best independent mortgage brokers, finding you the most suitable home loan is more than a one-off thing, we’re with you for the long haul so we understand your plans and can help you understand your opportunities. After an initial chat with you to understand your situation, we will find the most suitable home loan solution that helps you work towards financial freedom, so you can live your life on your terms. 

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