Frequently Asked Questions
Why use a Finance Broker?
Australians used to go to their local bank for their finance requirements and were limited to that particular bank’s products and credit assessment policies. We now have many more options when it comes to finance. Finance Brokers offer a whole range of advantages over a particular bank such as:
Faster service
A personal service
A comparison of interest rates between most of the lenders
A large range of finance products not limited to a single lender.
A finance broker will represent you and present your mortgage application to the lender that is willing to give you the best rate and mortgage terms. A finance broker's priority is getting you the mortgage that is in your best interests. This is an important distinction when compared to a Bank’s Loan Officer who serves the best interests of their bank and not your interest.
What is the LVR ratio?
As a general rule the banks will lend up to 80% of the property value.
This means that a minimum deposit of 20% is required.
The percentage of the Loan to the Value of the property is called the LVR Ratio.
What is Lenders Mortgage Insurance? (LMI)
LMI is an insurance to cover the bank against any loss from a default on the mortgage.
When the LVR is over 80% the bank requires the loan to be mortgage insured. The banks can fund the loan up to 90% of the property value.
The mortgage insurer charges a one-off premium for the loan above 80% LVR and the premium is payable by the customer. In most instances the premium can be added (capitalised) to the loan.