Frequently Asked Questions – Buying a Home
Most lenders generally allow you to borrow up to 95% of the value of the security property depending on the type of property, location of the property and size of the homeloan. In most instances where the loan amount is greater than 80% of the value of the property you will be required to pay the cost of Lenders Mortgage Insurance. In some instances Lenders Mortgage Insurance is not a requirement or payment of the premium by the borrower is not a requirement when borrowing up to 85% of the value of the property (to find out whether this may apply to you, contact us on 1300 448 911 or email us and we will contact you).
A number of homeloan lenders will permit you to add the cost of the Lenders Mortgage Insurance to your loan allowing you to borrow in excess of 95% LVR up to a maximum of 97% of the value of the property (97% LVR).
You will need to have sufficient funds (cash) to cover your deposit (at least 5%), transfer stamp duty, mortgage & title registration fees, proportionate amount of council rates & water rates, conveyancing/legal costs and property insurance. As a guide these costs will amount to a minimum of 9% of the value of the property. If you are borrowing more than 80% of the value of the property, you may need to have a bit extra to cover a portion of the Lenders Mortgage Insurance where the premium is more than 2% of the value of the property.
If you are a First Home Buyer you may qualify for the First Home Owner Grant of $7000 and a reduction in the amount of transfer stamp duty payable. To find out more about any First Home Buyer benefits that are available in your state, refer below to “Am I eligible for First Home Buyers Benefits” or visit www.firsthome.gov.au.
If you would like us to calculate the amount of money you need – call us on 1300 448 911.
Firstly, this will depend on whether your initial homeloan repayments are Principal & Interest (you wish to pay back a portion of the loan amount with each payment) or Interest Only (you wish to only pay the interest and not reduce the loan amount owing). You will also need to take into account the loan term, any interest only term if interest only payments are selected, repayment frequency (monthly, fortnightly or weekly) and the annual interest rate,
To work out your likely homeloan repayments please use one of our calculators or call us on 1300 448 911 and have us calculate a range of repayments for you.
When purchasing a property the value of the property will usually be the Purchase Price that appears on the Contract of Sale, alternatively the lender will arrange for a valuation assessment to be carried out on the security property to arrive at a fair value for lending purposes. This may involve a registered valuer conducting a detailed inspection of the property offered as security for the loan.
In a general sense, to be eligible for First Home Buyer Benefits including First Home Owner Grant (FHOG), State or Territory Stamp Duty Concessions and other Bonuses, either you and/or your spouse
- Will be an Australian citizen or permanent resident,
- Will be buying or building a home for the first time,
- Will have never received the First Home Owners Grant before.
Application Forms are available online at www.firsthome.gov.au and can be lodged direct with the applicable Office of State Revenue within your state or territory after settlement of your property purchase or if you would like the grant to be available at settlement, via your lender provided they are an approved agent for lodging First Home Owner Grant applications.
Each State Government or Territory charges stamp duty related to the transfer of property title. Stamp Duty on transfer is based on the value and/or purchase price of the property you are purchasing. If you are a First Home Buyer you may be exempt from paying some or all of the Stamp Duty on transfer.
To calculate how much stamp duty you may need to pay, visit the Revenue Office Website of your state or territory via the above link to the First Home Website.
It is advisable that you engage the services of a Conveyancing Solicitor or a Property Conveyancer to assist you with the purchase of any property. Your solicitor or conveyancer will attend to the exchange of property title on your behalf and other important matters relating to Contract of Sale, Local Council, Body Corporate (if applicable), Property Reports and Stamp Duty. It is sensible to have selected your Solicitor or Conveyancer before you begin the process of shopping for a property and to have established what their fee will be as there can be a significant difference between each of them as to what they charge.
Frequently Asked Questions – Refinancing
Actually there is no difference, as all of these terms refer to the same: ‘Property Refinancing’- the refinancing of your property from one homeloan lender to another usually to obtain extra funds and/or an improved homeloan. To be precise, you do not refinance a homeloan or mortgage; you replace a homeloan and/or mortgage with another homeloan and/or mortgage from another homeloan lender in the process of refinancing your home or your property.
When you are refinancing a property, generally most lenders will allow you to borrow up to 90% of the value of the security property depending on the type and location of the property as well as the size of the homeloan. Some lenders will allow home refinancing up to 95% of the value of your property especially when the refinancing relates to an investment property (conditions apply).
In most instances where the loan amount is greater than 80% of the value of the property you will be required to pay the cost of Lenders Mortgage Insurance.. In some instances Lenders Mortgage Insurance is not a requirement or payment of the premium by the borrower is not a requirement when borrowing up to 85% of the value of the property (to find out whether this may apply to you, contact us on 1300 448 911 or email us and we will contact you).
A number of homeloan lenders will permit you to add the cost of the Lenders Mortgage Insurance to your homeloan allowing you to borrow in excess of the 90% LVR.
When you wish to change your home loan lender by refinancing your property, your current lender may charge you an early payout fee (sometimes called a Deferred Establishment Fee) along with the standard mortgage discharge fee. Early pay out fees, generally only apply within the first 5 years of the home loan term.
Some lenders may appoint an external settlement agent to handle the mortgage discharge on their behalf and therefore pass on the costs of that agent to you. To fully understand what fees/charges you are liable to pay, refer to your copy of the loan contract.
Provided the borrower/s and title holder/s related to your current home loan are the same as the borrower/s and title holder/s related to the replacement home loan, no state or territory stamp duty charges should be applicable.
Of course there may be fees and charges associated with the processing and set up of your new home loan, please refer below to ‘What fees & charges do I have to pay?’
If you would like us to give you an estimate of your refinancing costs – call us on 1300 448 911.
It is relatively straight forward and easy to refinance your property or properties with another homeloan lender.
You commence the refinancing process by having Community Best Home Loans assist you with the selection of your preferred homeloan lender and preparation of your Credit Application to be submitted to that lender.
Community Best Home Loans has a simple 5 step Application Process where we do all the work while keeping you fully informed all the way. You can relax in the confidence of knowing you are dealing with a knowledgeable and truly professional MFAA accredited mortgage broker/planner business who offers one of the most thorough and informative customer service focused Credit Application Processes available.
Our Pledge: If we are at fault in you receiving a less than satisfactory experience with our Credit Application Process we will donate to a charity of your choice all monies, fees and/or charges that we receive for the submission and/or processing of your Credit Application.
We do this because we are 100% committed to supplying one of the most knowledgeable and informative Credit Application Process available today and at all times we will work hard for that to happen!
WE WANT YOUR CREDIT APPLICATION PROCESS TO BE AN ENJOYABLE EXPERIENCE!
Frequently Asked Questions – Homeloan Products
We offer a range of homeloans (in excess of 150) from approx. 30 homeloan providers including banks, building societies, credit unions, mortgage managers, corporate and private funders. Homeloans are available to cover a multitude of purposes including mortgage refinancing, home equity release, home and investment property purchase, home improvement, vacant land purchase and construction as well as debt consolidation. We also cater for self employed, small business and seniors’ equity release.
We will only conduct business with homeloan providers that we believe offer a minimum grade of financial products & services which will qualify them to be included on our Approved Lender Panel. From that panel we then select the lenders and/or credit suppliers who we believe consistently offer an overall superior level of customer service and products to form our Recommended Lender Panel. A copy of our Approved Lender Panel and Recommended Lender Panel is available on request.
Our Recommended Lenders are always amongst the most competitive in the market.
Each Principal and Interest (P&I) loan repayment consists of the amount of interest that you are required to pay as well as an amount of loan principal which will result in you paying back the complete amount of money you borrowed (loan principal) gradually over the term of the loan (usually 25 or 30 years). At the end of the homeloan term you will have successfully paid back the entire amount of money that you borrowed.
An Interest Only repayment only caters for the amount of loan interest that is due and payable and therefore does not reduce the loan principal. Your loan balance will always remain at the amount of money you borrowed for as long as you have interest only repayments.
As it is a requirement that a loan must be paid back in full by the end of the loan term, lenders will generally only allow interest only repayments for a period of 5 – 10 years within the loan term of usually 25 or 30 years. At the end of the interest only period your homeloan will convert to Principal & Interest repayments for the remaining term of the loan ensuring that you repay the loan principal by the end of the loan term.
The benefit of interest only is that the loan repayments are lower which enhances your cashflow during the interest only period. The down side is that the resulting principal & interest repayments at the end of the interest only period are much higher than the standard loan repayment. Regardless of this, interest only repayments can be a very useful tool in the successful management of your homeloan and are very popular with investors who are usually planning to sell the investment property or renegotiate the homeloan at or around the end of the interest only period.
At Community Best Home Loans (CommunityBE$T) we strive to make available for you a collection of what we judge as the best home loans and best mortgages on offer from the best lenders which will result in you paying the least amount of interest possible over the term of the loan. This in effect means that our Approved Lenders collectively offer a highly competitive range of products, services, fees and interest rates.
We are not a financial services business that offers homeloan products as acceptable products based on interest rate alone, as what is currently the lowest interest rate is not necessarily the interest rate that results in you paying the lowest amount of interest over time.
A comparison rate takes into account the actual interest rate being charged on the homeloan as well as other fees and charges that you will pay during the term of the loan. A comparison rate is an effective way for you to see and compare the actual cost of a homeloan as opposed to judging by interest rate only. It should only be taken as a guide as there are several other possible charges and/or costs that need to be considered in arriving at what may be the cheapest and/or best homeloan for you.
Fees that may be charged by lenders when approving and/or processing your loan application are application fee, settlement fee and loan processing fee. The settlement fee and/or loan processing fee usually relates to the drawing up of legal documents such as the loan contract and mortgage document. Other charges that are usually passed on by the lender are government fees relating to the registration and transfer of titles and mortgages.
In a competitive market you generally find that there are lenders who will waive the majority most of these costs. Remember though that homeloan decision making should not be based solely on the upfront costs and/or interest rate, it is about the overall cost of the loan coupled with the ease of use as well as lifestyle and financial benefits you may develop from the loan over time.
During the term of the loan you may also incur loan operation costs such as monthly or annual administration fees, redraw fees, rate or loan conversion fees.
Wherever possible, we will assist you to avoid any fees or charges relating to the set up or ongoing maintenance of your homeloans, however at times there are costs to be borne for the return of a greater benefit. We will always make sure that you are aware of this and discuss this with you at great length.
Your homeloan interest is calculated daily based on the interest rate and balance of your loan and charged/added monthly to your loan account. You can minimise the amount of interest charged to your loan by making more frequent repayments i.e. weekly instead of monthly, increased repayments i.e. add on an extra few dollars and/or extra payments from time to time when you have spare savings. Depositing your salary to your loan account or operating an offset savings account are other ways you can effectively reduce the amount of homeloan interest charged.
At Community Best Home Loans we specialise in assisting borrowers with effective interest and cost saving techniques and strategies. We are proud to say that Community Best customers pay less.
Repayments are traditionally made monthly via direct debit from a financial institution account held by the borrower/s with a bank, building society or credit union. Most lenders will allow more frequent direct debits i.e. fortnightly or weekly and for the direct debits to come from other financial accounts that hold BSB recognition. Most lenders will allow your salary and/or other remuneration to be directly deposited into the homeloan while others will allow you to access your loan via internet or telephone banking. The majority of lenders do not charge for these repayment services,
Please note that extra repayments may not be allowed and/or may incur extra charges when your homeloan has a fixed interest rate.
If you have made extra repayments to your home loan and your homeloan has redraw as a feature, you will be permitted to withdraw (redraw) those extra payments from your homeloan whenever you have another use for them. While the extra repayments remain in your loan account they will minimise the interest being charged and you will be able to get them back quite easily when you need them.
Most lenders do not restrict the number of redraws you can make or the frequency of the redraws however some lenders do restrict the amount you can withdraw at any one time with minimum and maximum allowances.
Generally you can redraw at no additional cost, as often as you like, as long as you have made additional repayments over and above your scheduled repayments as outlined in your loan contact.
Yes, you can repay your homeloan within the term of the loan. Generally there are no fees or charges associated with early repayment provided your homeloan does not have a fixed interest rate and/or you do not discharge the mortgage. If you wish to discharge the mortgage, lender’s mortgage discharge fees along with deferred establishment fees may apply.
For more detailed information on fees that are payable, refer to your loan contract or give us a call on 1300 448 91.
Yes, you are able to do this provided your homeloan has a feature known as ‘Portability’. Most lenders offer the portability feature with all their homeloans and at times you are also able to renegotiate the remaining loan term. Some conditions and costs may apply however portability does save you the costs associated with setting up a new homeloan.
A Deferred Establishment Fee (DEF) is generally charged by the lender if you finalise your homeloan and discharge the associated mortgage within the first five years of the loan term. To find out if your homeloan has a DEF, refer to your loan contract.
As part of the recently introduced National Consumer Credit Protection Act (NCCP), Deferred Establishment fees and Early Repayment fees are no longer acceptable for new homeloans but still may exist for some homeloans that were in existence prior to the introduction of the NCCP.
Yes you can. Homeloans sometimes called Equity Loans were specifically introduced to allow you to borrow money against your property for general lifestyle and/or varying financial purposes. You can use your borrowed funds to acquire other assets such as shares, an investment property, a motor vehicle or even a business. Alternatively you may wish to fund lifestyle choices such as a holiday, home improvement or education.
Community Best has Homeloans to suit all needs or purposes.
Frequently Asked Questions – The Homeloans Application Process
To apply for a home loan, for whatever purpose, either telephone ‘your Finance Centre’ at Community Best Home Loans on 1300 448 911 or go to ‘Same Day Pre-Approval’ and submit your details to us online.
The Online Same Day Pre-approval will take approximately 5 minutes to complete. Please make sure at the beginning of the information form, you include your email address and contact telephone number along with the most convenient time for contacting you.
All that is needed to begin your application, either online at ‘Same Day Pre-Approval’ or by contacting us on 1300 448 911, are brief details of your income, current credit accounts, assets, loan purpose and the amount you wish to borrow.
We can provide you with a Pre-Approval virtually straight away or within a few hours depending on your specific situation. Then depending on how quick you can gather the relevant supporting documentation and send it to us we could issue you with a Conditional Approval within 3 to 4 business days. Subject to the valuation requirements and location of the security property you could have your Unconditional or Formal Approval in writing from the lender with 7 business days from commencing your homeloans application.
Conditional Approval means that your homeloan is approved subject to certain lender requirements which generally are acceptance of the Lender’s Letter of Offer and a satisfactory valuation of the security property. Conditional Approval usually means that all your personal and financial details have been verified and only the security details need to be finalised.
A property valuation is a professional assessment /estimate of how much a property will fetch at sale within a period of 90 / 120 days based on a comparison to sale prices achieved for similar properties within the same area/region within the last 90 /120 days. All lenders require a valuation/assessment to be carried out regardless of the type and/or location of the property and/or loan amount, Lenders vary in the way they have the valuation/assessment carried out with either an onsite physical inspection or kerbside inspection by a registered valuer or an in-house statistical assessment based on archived real estate sales data being required.
A local Community Best Homeloans Consultant is able to meet with you in person, depending on your preferred meeting place being within their serviceable area. Due to our user friendly enquiry, interviewing and homeloan processing techniques, as well as our knowledgeable virtual homeloans consultants, we have found that we can deliver via telephone and internet the same satisfaction that you would typically expect from a face-to-face meeting and can do it in a fraction of the time that a face-to-face meeting would typically take. The result is, we are available 24/7 and can easily fit in with your work and lifestyle schedule, saving you precious time and adding value to the process.
Simple! You can use the internet and/or a touch-tone phone (similar to online & phone banking) to access your homeloan account. You will be able to check balances, make additional repayments, redraw excess funds or review recent transactions.
You also have unlimited access to Community Best Customer Service, 7 days a week at “your Finance Centre” for any assistance required or queries that you may have.
Lenders Mortgage Insurance (LMI) is an insurance policy that protects a lender against the possibility of loss from not receiving the complete repayment of a loan due to default by the borrower.It is typically required where the loan amount is greater than 80% of value of the security property/s. The cost of Lenders Mortgage Insurance is payable by the borrower as a lump sum premium at the time of settlement of the homeloan. However, in many cases you may be able to add the LMI premium to your loan amount negating any out of pocket expense.
Provided the replacement homeloan amount does not exceed the original limit of the homeloans your are refinancing and there are no changes to the original borrowers and names on the title deed, Mortgage Stamp Duty will not apply. However, rules and regulations are constantly changing therefore we recommend that you contact the Office of State Revenue in your State or Territory for further details.
5 Step Homeloan Application Process
Either complete our Quick Online Submission at ‘Same Day Pre-Approval’ or make a submission over the telephone – “your Finance Centre” on 1300 448 911. Refer to ‘What do I need to apply?’
Following contact with our virtual Homeloan Consultant and receiving your Homeloan Pre-Approval, you will receive a request to formalize your Homeloan Application by completing lender specific forms and supplying relevant documents supporting your application details. The quicker you finalise this request the quicker the application process.
On receipt of your Formal Documents and Forms your Community Best virtual Homeloan Consultant will verify all the forms and documents before submitting them to the lender for their Conditional Homeloan Approval. To assist with maintaining a fluent process, your documents and forms can be returned by email and fax as well as post. After receiving your Conditional Homeloan Approval your Community Best virtual Homeloan Consultant will contact you to explain any conditions and collect any further information (if applicable).
After the Lender has completed their valuation of the security property/s and provided the security property/s is deemed satisfactory they will finalise their internal verifications and issue you with a Formal Homeloan Approval (Unconditional Homeloan Approval) and provided you are ready to move forward instruct their internal Settlement Team or external Settlement Agent to issue you with the relevant Loan Contract and Mortgage Documents for signing.
When you receive your Loan Documents your Community Best virtual Homeloan Consultant will contact you to discuss the documents and assist you with the process for signing and return of the documents. Your new homeloan is not far away now, so the quicker you return your signed loan documents the quicker settlement will take place.
On receipt of your signed Loan Documents, Community Best and your Lender will follow up and align timeframes of all interested parties to effect a speedy and efficient settlement of your homeloan.