Frequently Asked Questions (FAQs)
- Why use a mortgage broker?
- There are so many mortgage brokers, why should I go to Pacific Home Loans?
- I have a good relationship with my bank manager, what more can you do for me?
- Does Pacific Home Loans ensure my confidentiality?
- What financial details do I need to provide when applying for a Home Loan?
- What other information will Pacific Home Loans require?
- What is Lenders’ Mortgage Insurance?
- Why should I get pre-approval for a loan?
- What is an interest only loan?
- What is the First Home Owner’s Scheme Grant?
- Do first home buyers receive any stamp duty concessions?
- Do I have to pay mortgage stamp duty if I refinance?
- When do I need to pay stamp duty or registration fees?
- How long does it take from application to settlement (or funding)?
1. Why use a mortgage broker?
One of the main advantages of using brokers is that they take the legwork out of the time consuming process of mortgage research. Mortgage brokers already have that information available to them and it is their job to know the latest and best products on the market. They are able to compare rates, features and terms and show you comparison tables as to the actual cost of the loan.
It doesn’t cost you any money. It is very rare to find a free service, so take advantage of it. Mortgage brokers are paid by way of up-front and trailing commissions they earn when you take out a loan from one of the lenders on their lending panel, so effectively it’s a “free service” to you.
Mortgage brokers are also aware of the criteria used when assessing loans and can help you “polish” your application by making sure you meet the lender’s requirement. The broker also has the ability to track and monitor the application and deal with all parties involved.
2. There are so many mortgage brokers, why should I go to Pacific Home Loans?
Pacific Home Loans will save you money by directing you to the lenders with the best rates and loan features to suit you. We also save you time by bringing the major lenders to you at once, instead of you having to go from bank to bank trying to make sense of it all.
Our mortgage brokers are mobile and will come to you, either at your home or workplace if you prefer. It often helps relieve some of the stress of the interview if it is done in familiar surroundings.
We explain the loan to you in plain English so you know you are getting a good home loan and we guide you away from the many potential traps of borrowing money.
You won’t be charged a fee for using Pacific Home Loans; there are no additional charges to your home loan at all.
Finally, we are an accredited member of the Mortgage Industry Association of Australia and as such we are bound by a stringent code of ethics. We act with honesty and integrity at all times, comply with all the Laws and Regulations relating to the Mortgage Industry and maintain total confidentiality in all our dealings.
3. I have a good relationship with my bank manager, what more can you do for me?
Individual bank managers do not have the power they did in the past. Assessment of loans is centralised and is simply a numbers game. We know the different discounts each bank is able to give depending on your situation. Also the banks view us as one big customer because of the large amounts of loans we put through them every month and they compete for our business. This means that we have access to discounts and special offers which an individual bank manager can’t offer.
4. Does Pacific Home Loans ensure my confidentiality?
Pacific Home Loans is governed by the Privacy Act 1988 which enforces the privacy of personal financial information. Your financial, contact or other personal details can only be conveyed to another organisation or individuals outside Pacific Home Loans (like the banks) with your express permission.
5. What financial details do I need to provide when applying for a Home Loan?
Depending on your circumstances you will need to provide the following information:
- details of your income
- details of your bank accounts
- details of your assets including shares, life insurance policies, motor vehicles and personal effects
- details of your liabilities including other loans, credit cards and store cards.
If you are self-employed you will need to provide up to date financial statements or income tax returns for the last 2 years.
6. What other information will Pacific Home Loans require?
As well as financial details, you may need to provide the following:
- Your current employer's details (address and phone number)
- If you have been in your current job for less than 2 years then please provide details of your previous employment
- Proof of identity (100 Points)
- Certificates of Title details
- Contracts for Sale (original not required)
- Full Rates Notices (original not required).
All documentation you provide must be originals (unless otherwise indicated). Your documentation is carefully handled and will be returned to you after funding.
7. What is Lenders’ Mortgage Insurance?
If you borrow more than 80% of the security property’s value you will need to pay Mortgage Insurance. This insures the lender against any loss incurred in the event the security property is sold for less than the balance of the loan. However, the borrower still remains legally responsible for repaying the shortfall.
The insurance premium is paid by the borrower at settlement or funding, from the loan account.
8. Why should I get pre-approval for a loan?
If you want to buy a property, it makes sense to find out how much you can borrow. If you apply for a loan and obtain "pre-approval", you will:
- know how much you can afford
- strengthen your position as a buyer
- have a basis to compare different loans and make the best choice for you. And that can mean tremendous savings over the life of the loan
It also makes sense to secure a lender's commitment as soon as you know that you want to buy – especially in a hot market, when property is selling fast.
9. What is an interest only loan?
An interest only loan allows you to pay only the interest on the loan, rather than paying both principal and interest. This payment option may be useful for property investors because it maximises the investor’s tax deductions. This option may also have the added benefit of freeing up cash flow for alternative investments.
You can choose to have an interest only option for a maximum period of five years on both Home and Investment Home Loans, however longer terms may be negotiated.
10. What is the First Home Owner’s Scheme Grant?
Eligible first home buyers can receive non-means tested government assistance of $7,000. The scheme is administered by the States and Territories. It covers only the purchase of your first home in Australia. If you are married or living in a de facto relationship, you must make a joint application for the grant with your spouse or de facto. Neither of you can have owned a home previously, whether individually, or with any other person. You will be eligible to apply if you:
- are buying your first home
- are an Australian citizen or permanent resident
- intend to make the home your principal residence, and
- start living in the home within a reasonable time. The payment will be the same regardless of your income.
Visit the First Home Owner’s Scheme web site for more details or to download an application form.
11. Do first home buyers receive any stamp duty concessions?
Most State Governments also offer various means-tested packages to assist first home buyers. This may include eligibility for discounts on stamp duty.
For more information on the First Home Owner's Grant or other Government assistance programs, visit the First Home Owner’s Scheme web site or speak to your solicitor.
12. Do I have to pay mortgage stamp duty if I refinance?
If you choose to simply refinance a loan and the new loan amount is not exceeding the original amount of the loan being refinanced, where there are no changes to your name/s on the title deed or on the loan contract, you won’t be charged mortgage stamp duty – except in Qld and SA. However, under certain circumstances mortgage stamp duty may be payable in other States and Territories as well. Please contact the Office of State Revenue in your State or Territory for further details.
13. When do I need to pay stamp duty or registration fees?
In most cases, mortgage stamp duty and registration fees will be debited to the loan. However, where you have selected the repayment option of interest only, these fees will be debited to your nominated related account.
Debits to your related account will generally be processed within 4 weeks of your loan being settled. If you wish to find out more information about stamp duty, please visit the Office of State Revenue for your State or Territory.
14. How long does it take from application to settlement (or funding)?
Once your application and all the necessary information has been received by Pacific Home Loans you should receive conditional loan approval, or a request for further information, within 24- 48 hours. Once all outstanding documentation has been received and upon satisfactory valuation the loan is unconditionally approved (usually takes between 3 -5 days). You will then be sent the Loan Offer, which includes the mortgage documents.
After you sign and return these documents, and providing there is nothing else outstanding, Pacific Home Loans will then arrange for settlement or funding of your loan.
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