AuthorStephen

“As a mobile mortgage brokerage service, I mean people are always welcome to come and visit us but generally we will go out and see clients, we will do that out of business hours, we understand that people are working. We visit clients in Melbourne during their lunch hour to put loans together and we’ll go and see people in their homes in an evening to put an application together.”

Well first home owners are a good example of why you should use a mortgage broker over going into a branch, examples of a young couple who had saved a small deposit to buy a property, they went into one main lender off the high street, that lenders they had not fitted within that lenders policy because they would only lend 90% unless they was an existing customer, so they had been told no, they’ve walked away thinking that they can’t get a home loan, then a friend of them have said why don’t you call a mortgage broker we’ve gone round and yes they couldn’t fit within that banks’ lending policy but being accredited with around 30 lenders we managed to place them with another lender who is lending policy was a little bit more were you have to declare that and the client signs to accept that they’ve been shown that all banks pay us a commission.

The Commission’s vary from lender to lender but we would consider never enough for us to put you with the wrong lender, they will have a selection of products to offer you but only their products, they will never offer you something else, so they will offer you the most suitable product that they have, and that’s all they required to do, yet you come to a mortgage broker and we will offer you we will look at all the lenders and we will find the most suitable product for you across all the lenders, it costs you nothing, we pay a commission by the banks that is how we get paid.

the big thing to know for the first time owners in Victoria they no longer get the first time home owners grant unless they are building a new property, and they do still get a fifty percent reduction in stamp duty, so with first home owners the biggest thing is deposit, because banks require you to have a minimum of five percent deposit plus costs for your First home owner normally it’s around about 3% issue costs, so what we normally say to a first home buyer is you need to have about eight % of what your buying, so with first home buyers I mean currently with spring 2016 if you wanted to buy, for a first time buyer normal buying a unit or a small house in lest say the Frankston area they will be spending about 400,000, for them the 8% deposit really means that they’ll need roughly around about $32,000 that’s the minimum the bank are going to need to see for them to be able to get in on a home.

Another question that comes up a lot with first-home buyers is you know the whole process what do they have to do and again this is what we speak to them about, the free conveyancing and how we handle it and make it all a little bit less stressful for them and sort of take the process away from them, so pretty much they pay the money and the deposit and they move into a house stress-free hopefully, so for your first time home buyer who’s looking to get into the housing market we will always advise them whether they feel they’re ready or not, speak to a mortgage broker, we will you go out and visit lots of people and we won’t do a loan for them for maybe two years that’s fine it’s part of our job, we will come out give you some independent advice as too whether you can ( A) get a loan, you have enough deposit you know for the area that you want to buy in.

If you’re there then obviously we will step through the home loan process and we would always advise first time buyers to get a pre-approval with the lenders, most lenders will write you a pre-approval they will assess you for lending, so what pre-approval means is that we will take an application from you but just without you finding a property, so they’ll assess your income your savings and your credit history, we will present that to the bankers on application, they’ll assess you as a person as to whether they’re willing to lend you that money when you find a property to live in, they will then issue you with a pre-approval which generally lasts three months with most lenders some will extend that to six months, so what that means is that you can then go out go to a home open or even go to an auction knowing that you’re good for that money from that lender, subject its always subject to the property being acceptable.

And there are exceptions to some banks will not lend on certain properties but generally in the metropolitan area and on Mornington peninsula there isn’t any of them around, so then you’re open to go and make an offer, once you’ve made an offer that you will be issued with contract by the real estate agent which is called a section 32 we then provide that to the lender for you and then your loan becomes unconditional, they send out a loan contract to you, you sign and then you wait, if you want to start the home loan process we always say to people what’s good to get together is your last couple of pay slips hopefully your last pay as you go summary that you received from your employer at the end of the year, it tells you what you earned and then pick up the phone give us a call we’ll come out and see you and we will take you through the home loan process step-by-step and any additional information that we need you to get we will let you know what it is

“So self-employed customers they can sometimes pose a little bit more of a difficult lending scenario, we have a wealth of self-employed lenders, but for someone who is self-employed some banks will ask for two years full financials, where other banks will only ask for a year, there are specialist lenders out there who will lend to clients who have been in business less or don’t have their financials in order, and we certainly have them lenders on our books but what the clients have to remember is that those lenders because there is an element of risk the more risk the more interest that they have to pay so we have a specialist lender who will lend to a client with their financials not in order, or who haven’t been in business for quite a few years, there is a slight more risk for the banks so they will charger a higher rate.”

“So look when a self-improvement client comes to us for lending, myself come from a trade background and a self-employed background, so I understand sometimes it can be a bit daunting for people, but we will come out and see you look at your financials go through them see what’s required and then we’ll place you with a lender that suits you because all lenders have different lending criteria for self-employed people, some lenders will only require you to have a year worth of financials some two, it doesn’t really affect you too much other than you have less
choice when you’ve only got one year’s financials, ultimately if you’ve got two we will come out and see you and we have pretty much the whole market to choose from, if you’ve only got one year’s financials it’s fine we’ve just got a smaller pool of lenders to look at.”

“So for self-employed people to get the application started would always ask them to get their last year’s financials or the last two years if they’ve done them, so if they have submitted a tax return get that paperwork together and then give us a call and we’ll talk them through everything else, we will come out and see you look at your financials see which lenders best for you and then we’ll take you through the whole process advice.”

“So another option for the first time buyers is the guarantor loan and what this ultimately is if they’re struggling to get the deposit or they may have a 10-percent deposit but they’re not keen on paying the mortgage insurance which kicks in after 80%, mom and dad can come in and offer their property as a partial guarantee, so how that works is let’s say you’re buying your house in Frankston for $400,000 and you’ve managed to save yourself a forty thousand dollar deposit, and which is 10% you need another 10% to stay away from mortgage insurance, mom and dad can secure that 10% against theirs and that will remain their liability until the house increases in value or the mortgage is paid down.”

“The guarantor loan is becoming more and more popular now because of the cost of houses young couples are finding it increasingly difficult to go and save that sometimes they have to save $80,000 it’s incredibly hard for them, so mom and dad’s are more commonly kicking in now with a guarantor loan it saves mom and dad having to actually hand over any money, all they are doing is offering up partial security against their house, the children are still borrowing the money just that mom and dad are offering the security for it, we can sometimes take them to the same lender that mom and dad are with or some lenders will take a second charge behind the first lender and they’re happy to do that because it’s only a small portion that they’re securing against the property, mom and dad generally do have to have an income and they have to be able to service that portion of the debt so look if mom and dad don’t have an income and they’re retired the banks are very reluctant to then add an additional debt to mom and dad in their retirement.”

“Now what is a section 32 this is a contract that’s done up which is put together by the person selling the property, they’ll get a conveyance and put it together, it normally has details of the contracts, it will have history of the property, the title, any caveats that are placed on the property, or any restrictions, and it also have any special conditions, it will also include things like if there’s any strada fees or body corporate fees, so unconditional approval this is the final hurdle for lenders, so this is where they assess the whole application, if you’ve had pre-approval they’ve assessed you for your financial side of things then we’re adding a section 32 a property to the application, they assess the property and it’s acceptable though generally most lenders will send out a valuer to check that the property’s worth what you’re paying for it, and then you are issued with an unconditional approval that’s when the lenders saying we’re happy we’re going to give you this money to buy the property, that’s when they will issue you with a contract, we generally come out and see our clients when the contracts issued, sit down and go through it with them and get it signed up so this makes the process easier.”

“So what is an offset account, basically this is a bank account that the lender will give you with your home loan and any money that’s in this bank account will offset against the interest of your mortgage. So let’s say you have a $400,000 loan and what you’ve got is $10,000 in savings, that are sitting in your bank account. Now that $10,000 will offset the interest on your home loan, so essentially what you’ll be paying is the interest of a three hundred and ninety thousand dollar loan.”

“This saves you interest and because you’re saving interest and not making interest like if you had it in a savings account its non-taxable… let’s say you’ve got your $10,000 in the home in the bank account and that’s offsetting against your home loan and then you have some bills come in, the car needs rego, needs some fixing and you need new tyres etc. and all of a sudden you’ve got five thousand dollars.”

“That’s fine… it’s your money you can access it anytime you want, you can spend it most banks will give you an ATM card to operate the account. And then what happens is let’s say you’re left with $5,000 that you’re then paying the interest on a home loan of 395 thousand and that’s how it works.”

“Some banks will even offer multiple accounts so this basically is you generally have one account which you can operate through an ATM card, then you will have a series of other bank accounts which you can access via their banks online portal, and I’ve got customers that will save school fees in one, the holiday, any house renovations, new car fund that some banks will let you have up to 6 offset accounts, all the money they are saving in these accounts at any one time will be offset against the home loan.”