FREQUENTLY ASKED QUESTIONS
Mortgage brokers act as intermediaries between you and potential lenders. They have a profound knowledge of the market and can analyse your financial circumstances to find the most suitable loan options. Think of them as personal finance consultants who simplify the complexities of loan applications, ensuring you find a tailored loan solution.
Mortgage brokers are often paid by the lenders they connect you with, not directly by you. Their compensation usually consists of an initial commission when the loan settles and a trailing commission during the life of the loan. This system incentivises brokers to find you the best possible loan options.
LMI might seem like just another cost, but it serves a significant purpose. It’s designed to protect the lender if you’re unable to repay the loan but also enables you to purchase a home with a deposit less than 20% of the property value. This can be particularly beneficial in allowing earlier access to the property market.
The comparison rate is a tool designed to help you understand the true cost of a loan by incorporating both the interest rate and any additional fees and charges involved. This rate provides a clearer picture, ensuring you can make more informed comparisons between different loan products.
A fixed-rate loan is a type of loan where the interest rate is set for a certain period, usually between one and five years. This means your repayments stay the same for that period, making it easier to budget. However, fixed-rate loans may have less flexibility and higher early exit fees.
A variable rate loan is a type of loan where the interest rate can change over time based on the lender’s standard variable rate. This means your repayments can go up or down. Variable rate loans often offer more flexibility and features than fixed-rate loans.
A split loan, or split rate home loan, is a mortgage that splits your home loan balance into multiple loan accounts with different interest rates. This allows you to enjoy the benefits of both fixed and variable rates.
Offset accounts can reduce the amount of interest you pay by offsetting your loan balance against the money in your account. Redraw facilities allow you to access any extra repayments you’ve made against your loan. Both tools provide opportunities to manage your loan more effectively, potentially saving money over the loan’s term.
Equity represents the value of your home that truly belongs to you, either earned through repayment of your loan or an increase in your property’s value. You can use this equity to secure additional funding.
Refinancing involves replacing your existing loan with a new one, usually with a different lender. People refinance to take advantage of lower interest rates, access equity in their home, consolidate debts, or enjoy better loan features.
A pre-approval, or conditional approval, is an indication from a lender of how much they may be willing to lend you. It’s based on a preliminary assessment of your financial situation. Pre-approval can be useful when house hunting, as it gives you an idea of your borrowing capacity.
A guarantor is someone who guarantees to repay a loan if the borrower can’t. This provides additional security for the loan, which can help the borrower get approved. Guarantors are often parents helping their children buy their first home.
The FHOG is a national scheme funded by states and territories to help first home buyers with the cost of buying a home. It’s a one-off grant that’s payable to eligible first home owners.
To apply for a mortgage or loan, you’ll need to provide personal and financial information to your broker or lender. This includes proof of income, employment details, credit history, and details about the property you wish to purchase.
Yes, it’s possible. Some lenders offer loans to borrowers with lower credit scores. However, these loans often come with higher interest rates to offset the risk. It’s best to discuss your options with a mortgage broker.
At Success Financial Group, we believe in giving back to the community. By sponsoring orphan children on behalf of our customers, we’re not only helping those in need, but also creating a positive impact that goes beyond our business.