Frequently Asked Questions

1What are the benefits of making extra payments?
Being able to make extra payments is a very important component of any Home Loan; of course you can simply pay the minimum payment and then in 30 years time you will own your home. But there are other options:
  1. Make fortnightly payments instead of monthly payments; just doing this will take 6 years off the loan and save a huge amount of interest.
  1. Use the loan as a savings account, this means putting all your spare money into the home loan rather than a savings account, the interest on your loan is calculated daily on a reducing balance, so the more money you can put into the loan, helps you pay it off faster, and you pay less interest.
  1. You can direct your paymaster to pay all your salary directly into the home loan, you then use the redraw facility to withdraw money out of the loan for living expenses, doing this can really help you payout the loan faster and saves an incredible amount of interest. Every day an extra $1.00 is in your home loan it is bringing down the balance, so that you pay less interest and pay the loan off faster.
  1. Make lump sum payments whenever you can, like tax return cheques, selling a car or boat, cash gifts or inheritances can really reduce the balance of the loan and help you pay it out faster.
2Should I consider a Fixed Rate of Interest?
A Fixed Rate is one where you can fix the interest rate so that it won’t change for a certain period, usually from 1 to 5 years. The benefits of this, is that you know exactly how much your payments will be during the fixed period, and you can adjust your living budget accordingly, and if the interest rates go up you may be paying a cheaper interest rate. The disadvantages are:
  1. The interest rate is usually higher than the variable rate.
  2. You usually cannot make extra payments.
  3. You pay “Break Costs” or a penalty if you payout the loan during the fixed period.
  4. You end up paying the lender more interest.
3I have seen cheaper Interest Rates advertised, what is the difference?
Yes there are loans with cheaper interest rates around, but they are basic or limited loans, where you usually are only able to make monthly payments, and cannot make additional payments, and they do not have any special features, like redraw facilities or direct salary crediting and they usually have monthly administration fees. So the end result is it takes longer to pay the loan out and you pay the lender more interest.
4What is a honeymoon rate?
These loans are designed to be attention grabbers, where the lender displays a really cheap rate for the first 6 or 12 months of the loan, which then increases to a much higher rate for the remaining term of the loan. The payments at first appear to be affordable and can become a real burden when the interest rate increases, and you end up paying more interest over the term of the loan.
5What do I need to do, to find out how much I can borrow?
The first thing we need to do is find out how much you earn, we need this information to put into the computer, and it will tell us exactly how much you can borrow, we can do this right now and it will only take 5 minutes. We need to confirm this information, and will need copies of 2 recent pay slips, and copies of your last 2 years group certificates or tax returns.
6What do I need to do, to get a loan Pre-Approval? (PAYG)
We need to complete a loan application form which we can do right now, and you will need to supply us with copies of the following information.
  • Copies of 2 current pay slips.
  • Copies of group certificates or tax returns for the last 2 years.
  • Copies of savings accounts showing 3 months history.
  • Copies of term deposits held longer than 3 months.
  • Copies of share certificates held longer than 3 months.
  • Copies of driver’s licenses.
  • Copies of medicare cards.
  • Copies of birth & marriage certificates for first homebuyers.
7What do I need to do, to get a loan Pre-Approval? (self-employed)
We need to complete a loan application form which we can do right now, and you will need to supply us with copies of the following information.
  • Copies of last 2 years tax returns for individual and business.
  • Copies of last 2 years profit and loss statements and balance sheets.
  • Copies of last 2 years tax assessment notices.
  • Copies of savings accounts showing 3 months history.
  • Copies of term deposits held longer than 3 months.
  • Copies of share certificates held longer than 3 months.
  • Copies of driver’s licenses.
  • Copies of medicare cards.
  • Copies of birth & marriage certificates for first homebuyers.
8What do I need to do, to get a loan Pre-Approved? (Construction Loan)
We need to complete a loan application form which we can do right now, and you will need to supply us with copies of the following information.
  • Copies of 2 current pay slips
  • Copies of group certificates or tax returns for the last 2 years.
  • Copies of savings accounts showing 3 months history.
  • Copies of term deposits held longer than 3 months.
  • Copies of share certificates held longer than 3 months.
  • Copies of driver’s licenses & medicare cards.
  • Copies of birth & marriage certificates for first home buyers.
  • Copies of fixed price tender from builder.
  • Copies of floor plan for the building.
9How long will it take to get the Pre-Approval?
As soon as we receive all your information we will be able to lodge the application, and we will get an answer within 48 hours. We will receive a copy of the letter of “Pre-Approval” and will immediately notify you that your loan application has been accepted. You will then be in a position to seriously make offers to buy a property.
10I am only paying a 5% deposit, what do I do?
We can arrange a deposit bond for you. A deposit bond is a guarantee that takes the place of a cash deposit, whereby the deposit bond company puts in the deposit for you and charges a nominal fee of 1.18% of the amount of the deposit. This can be for 1 month or 6 months, and the fee remains the same.
11When do I start making payments?
Your first payment is not due until 1 month after the settlement date. If you have decided to pay fortnightly the first payment of 1 full monthly payment will be taken out of your bank account 1 month after the settlement date, and from then on the fortnightly payment will be taken out every 2 weeks. You can increase your payments and nominate the amount you want taken out of your bank account; otherwise the minimum payment will be taken.
12What happens if I have all my salary go straight into the loan?
You will receive your access code and password within 2 weeks of the settlement date, you will then be able to used the telephone and internet banking to make redraws and additional payments, you will also receive instructions of how to use the system.
13What can I do to pay my loan out faster?
The loan that you are getting is the best one for you, as it has all the features to enable you to pay it out faster, and paying it out faster takes years off the loan and saves you an incredible amount of interest, and here’s how you do it. Set a budget and stick to it. Understand what your living costs are, and budget for the things you want to buy. Put all your expenses down on paper and estimate your weekly living expenses for, food, and petrol, medical and entertaining. You will also need to make allowances for expenses that do not occur every month like, rates, insurance for the house and motor vehicles, registration fees and telephone accounts. You should then be in a position to work out a weekly budget for your immediate living expenses; your other expenses like telephone accounts, insurances registration and rates are usually quarterly or yearly expenses. If this money is saved into your loan rather than a bank account, it comes off the balance of the loan so that you pay less interest, and it helps you pay the loan out faster. You can always use the redraw to get the money out when it is time to pay your accounts. Make your payments fortnightly. Your interest is calculated daily on a reducing balance, so by making your payments fortnightly you are bringing the balance of the loan down faster, and this saves interest and helps you pay the loan out faster. Use your salary smarter. It is in your interest to have your salary paid directly into your home loan, by doing this all your income is working for you, coming off the balance of the loan, the more money that you put into the loan the lower the balance, the less interest you pay and the faster you pay out the loan. Every day an extra $1.00 is in the loan it is bringing down the balance, and you pay less interest, the redraw facility is absolutely free with unlimited access, and can be accessed by telephone or internet banking, and the money is transferred into your bank account within 24 hours Make lump sum payments. Whenever possible make lump sum payments, like tax returns, cash gifts, inheritances selling a car or furniture will bring the balance of the loan down and help you pay it out faster. Paying a little bit extra. Chances are your income will increase over the course of the home loan; when this happens allocate a percentage of your increase to your loan payments, this will come directly off the balance as principal reductions, and will really help pay the loan out faster. Take a close look at your credit cards. The interest that you pay on credit cards and store cards is much higher than the interest that you pay on your home loan. If you have to use a credit card look for one that gives you an interest free period, and make sure you pay it in full every month.

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