FAQ

Frequently Asked Questions

What is LVR (Loan to Value Ratio)?
  • LVR stands for Loan to Value Ratio. It’s the percentage of the property’s value that you are borrowing. A lower LVR is better because it means less risk for the lender and may help you avoid paying Lenders Mortgage Insurance (LMI).
  • LMI is a type of insurance that protects the lender if you can’t repay your home loan. It usually applies when your LVR is above 80%, meaning you’re borrowing more than 80% of the property’s value. Even though the lender is protected, the borrower pays the cost.
  • Superannuation, or super, is a long-term savings plan for your retirement.Your employer must contribute a percentage of your income into a super fund.You can also add extra contributions to grow your super faster.
  • An offset account is a bank account linked to your home loan.
    The money you keep in it reduces the interest charged on your loan.
  • A Low Doc Loan is for people who don’t have the usual income documents like payslips or tax returns, often self-employed or small business owners.
    Instead, you can provide alternative documentation such as bank statements, BAS, or an accountant’s letter.
  • Net Monthly Surplus is the amount of money you have left over each month after all your expenses are paid.
    Lenders use NMS to check if you can afford a loan.
  • The comparison rate combines the interest rate and most fees and charges into one percentage.
    It gives a better idea of the true cost of a loan.
  • Stamp duty is a government tax you pay when buying a property in Australia. The amount depends on the property price, location, and whether you’re a first home buyer.
  • A redraw facility lets you take out extra money you’ve paid into your home loan (above your required repayments). This can be handy if you need cash later for renovations, emergencies, or personal use.
What is the process for applying and getting approved for a mortgage?

  • Consult a Mortgage Broker

  • Get Pre-approval

  • Search for the property you want

  • Submit the full application

  • Get formal approval

  • Sign loan documents and settle

  • Most importantly you’ll need ID (passport, driver’s licence), payslips, income statement, list of assets and previous debts, monthly expenses.

  • Always start with good research. After doing that check your credit score because lenders want to see that you’re able to manage your finances before they decide to offer you. Save for a deposit and understand your borrowing power. This gives a brief idea on how much you can pay. For easy and quick processes, you can always rely on a broker so that you can explore your options and prepare.

  • To qualify for a mortgage, borrowers usually must show they can repay the loan by meeting certain criteria, such as having a solid credit history, steady earnings, and a reasonable debt-to-income ratio. Lenders also evaluate the property’s value and the borrower’s ability to make a down payment and handle additional expenses.

  • The best way to know is to use loan calculator or mortgage calculator to calculate it. Beside that you can always check your income and expenses to know your capacity.

What do you mean by SMSF loan?

  • An SMSF loan is a loan taken out by a Self-Managed Super Fund to buy an investment property. The property must be for investment purposes only, not for personal use.

  • An SMSF (Self-Managed Super Fund) isn’t solely for property, it’s a DIY superannuation fund. However, it can invest in various assets like real estate, shares, term deposits, and others, based on your investment strategy.
  • Typically, an SMSF can borrow up to 70–80% of the property’s value. The exact amount depends on the lender, fund balance, and loan terms.

  • Yes, an SMSF can invest in property, but it must be purely for investment—you, your family, or related parties can’t live in or use it. If borrowing is required, it must be done through a Limited Recourse Borrowing Arrangement (LRBA) to comply with super laws.

  • The SMSF sets up a separate trust to hold the property. If the SMSF defaults, the lender can only claim against the property no other SMSF assets.

  • No, establishment costs are not tax-deductible. However, they can be paid by the SMSF and counted as a capital expense.

  • Yes. To receive tax concessions, the SMSF must be an Australian resident fund and meet residency rules.

  • Yes, as long as it aligns with SMSF’s investment strategy. This includes Australian and international shares, ETFs, and approved derivatives.

Should you work with a mortgage broker?

  • Yes, especially if you want expert help comparing loan options, saving time, and improving your chances of approval.

  • A mortgage broker does the hard work for you comparing multiple lenders to find the best deal based on your needs.

  • Anyone! First home buyers, investors, self-employed, or anyone unsure about the loan process can benefit from a broker’s guidance.

  • Using a mortgage broker gives you access to a wider range of lenders, along with personalized loan recommendations to suit your needs. They streamline the process by handling the paperwork and saving you time, while also assisting with pre-approval. Best of all, their services typically come at no direct cost to you, as brokers are usually compensated by the lenders.

  • Not really. Many brokers work remotely via phone, email, or video calls. But working with a local broker can help if you want in-person support or local property insights.

Mortgages General Terms and Conditions

  • Mortgage terms cover key details like interest type (fixed/variable), repayment structure (principal & interest or interest-only), loan duration (typically 25-30 years), associated fees, and conditions for redraw, offset accounts, and early repayments.

  • Yes, but changes like fixing the rate, switching repayment type, or refinancing may require lender approval and could involve fees.

  • Home loans come with several important requirements. Borrowers must use the funds for approved purposes like purchasing or constructing a residential property. Timely repayments are mandatory to maintain good standing, and lenders typically require property insurance coverage. Additionally, if the property is mortgaged, homeowners generally need lender approval before making any major structural modifications. These conditions help protect both the borrower’s and lender’s interests throughout the loan term.

  • Common legal terms include loan amount, interest rate and comparison rate, default clauses (what happens if you miss payments), mortgage security (the lender’s rights to the property) and early exit or break fees.

  • Most home loans in Australia have a term of 25 to 30 years, though shorter or longer terms may be available depending on your situation.