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| 1) How long does a loan approval take? |
Generally, if we submit an application with all the required supporting documentation the lender will have the application assessed and either approved or declined within 48 hours. The resulting approval will be conditional meaning a valuation of the security property will be ordered.
| 2) How long will the conditional approval last? |
Usually, a conditional approval is good for 60 days but this will vary by lender. If your conditional approval expires before you find a home to purchase that ’s OK. A new approval can be easily attained as long as your circumstances haven’t changed.
| 3) Should I choose a Fixed or Variable rate? |
This depends on your situation. If you chose a variable rate the interest rate can change so your repayments will rise and fall with interest rate movements. One advantage of a variable rate is the flexibility you have to make extra repayments.
With a fixed rate you can lock the rate from 1-5 years. The advantage of a fixed rate is that your repayments will stay the same irrespective of interest rate movements for the period of the fixed rate term. However, extra repayments are usually capped for the term of the fixed period.
If you want to have the best of both worlds you may wish to split your loan between fixed and variable. In so doing you can have a hedge against rising rates and pay more into the variable rate when rates are lower.
| 4) What is a redraw facility? |
A redraw facility allows you to access the additional funds you have paid into your mortgage. If you are ‘ahead’ in your repayments most lenders allow you to redraw the extra funds. There is usually a small fee to perform this transaction.
| 5) Can I still get a loan if I’ve had credit problems? |
Yes. Baycorp recently reported that 1 in 4 Australians had an adverse listing on their credit file. Sometimes a family illness, divorce or other situation may have caused you to fall behind on bills. If you cannot obtain finance through a traditional lender there are many options available to you for finance.
| 6) I just became self-employed and don’t have an established trading history, can I still get a loan? |
Yes. There are many good options for those who have recently started a business and need capital or don ’t have financials from their existing business and can’t prove their income. You will need to own property. |
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