In the current economic environment, most lenders are now requiring applicants to save a minimum 5% deposit over a minimum period of 3-6 months. This requirement is checked through bank statements, and 'one-off' large deposits are usually excluded from savings history. Equity in another property will qualify as a 'saved deposit'.

 

Generally to avoid this requirement a minimum 15/20% deposit will be required eg, sale of assets, a gift, and/or the First Home Owners Grant.

 

If you are planning to purchase a property in the next 6/12 months, it is advisable that we meet now to start planning for that purchase.

 

 

Absolute Lending Solutions is generally a 'fee free' service, as we are remunerated by the lenders we use for the introduction of your business.

 

In some cases...Bridging Loans (we not paid by banks) and some complex Commercial transactions we may charge a fee to cover the cost of our time, but these fees will always be advised and agreed upon prior to proceeding with any loan application.

Mortgage Insurance is commonly confused with Mortgage Protection Insurance.

 

In Australia, most lenders are restricted to a lending ratio of a maximum 80% of the value of their residential property. We are however able to access loans to 80.1% to 95%, and when this happens the loans need to be Mortgage Insured. There are only two major insurers in Australia - QBE LMI and Genworth Financial and they charge the bank's premiums dependant on the overall LVR (loan to value ratio). The higher the ratio the higher the premium.

This is a once off premium that the bank will pass the cost on to the client (it can be capitalised to many loans now), that does benefit the client by allowing them to borrow in excess of the 80% of their property, but is for protection for the lender should the property ever be sold and insufficient funds from the sale be received to clear their debt, the Mortgage Insurer will pay the bank any loss incurred.

There are many reasons to use a Finance Broker.....over 40% of all loans written in Australia are now introduced by brokers.

Many people now don't simply have the time to "shop around" when looking for a loan, and of course if they only use their own bank they are subject to that lenders specific products and policies. By using the services of a Finance Broker you generally gain access to in excess of 40 lenders and their relative policies, and the broker does all the research for you.

 

Please ensure that you deal with a broker that does not charge a fee for their service, and that they have accreditation with either the MFAA (Mortgage & Finance Association of Australia) and they hold accrediation of a Certificate IV in Financial Services.

 

As at 1st January, 2011 all finance brokers will also have to be licensed by ASIC to enable them to trade....if they cannot produce this licence or evidence that they are a Credit Representative of a licence holder the person you are dealing with is not able to trade as a Finance Broker.

As a general rule if you wish to purchase a commercial/industrial property and secure the loan with the property being purchased you will need in the area of 30-35% deposit plus legal and borrowing fees.

 

Most lenders will accept equity in a residential property as security for the loan as well and usually offer slightly better rates for the portions of loans secured by these securities. Generally commercial loans secured by residential security can be accessed to 80% of the residential security value.

The answer is one that cannot be simply answered without some investigation into your personal circumstances.

 

Most loans in Australia are written on a variable rate basis (the rate can fluctuate with RBA rate movements), with borrowers choosing to hedge their bets that rates will even out over a loan term.

Some however are not in a personal position to cope with excessive rate rises, so therefore fix their loan for a specified period (usually 1-5 years) to safeguard against being placed in a position where the house/investment cannot be retained.

 

A popular choice with many borrowers who are unsure as to go 'fixed or variable' is to split your loan ...this basically means you have some of your loan on a variable rate and some on fixed. This way you get the comfort of knowling what most of your repayments will be (fixed) and the flexibility of still making additional payments as you wish (variable).

 

If you are unsure as to whether you should go fixed or variable we would be happy to discuss with you.

The simple answer to this question we believe is - pay more principal as often as you can.
Many people now like to use a Line of Credit Facility where all their income goes to the Line of Credit and you live off you credit card (repaying the debt from the Line of Credit when you receive the statement). We believe this is suited to a limited amount of clients as the temptation to ""redraw"" back to your limit hinders repayment of the debt.

 

Two simple ways of paying your mortgage back quicker is to (1) make half a months payment every fortnight, this generally will take 6/7 years off a 30 year loan term, some people may wish to do this on a weekly basis for a slightly better benefit (2) every time you receive additional cash, a bonus or something to that effect pay it off your loan, it is a straight principal reduction.

 

With most varibale rate loans any additional funds paid can redrawn at a later stage in need, however it has to be understood that this process will once again extend your loan term.

 

We have many views that can assist you, please contact us if you require more information.