Q: What kind of reasonable costs could I expect
when buying a property?
A: Bear in mind that some of these fees can be avoided,
depending on the Lender and your own personal requirements – this
is all taken into consideration when your Mortgage Broker Specialist is
working out your best options;
- Registered Valuation $450
- Solicitors Fees $800 - $1500
- Application Fee $0 – 1%
- LIM Report $150
- Builders Report $550
(Please note, prices may differ between Industry Professionals)
Q: Can these fees be added onto my mortgage?
A: In some cases yes, it is dependant on how much you
are borrowing, as to what is the value of the property.
Q: Can my application be done via the internet?
A: Yes, with the advent of modern technology (internet,
email etc), we do not have to be sitting on your doorstep to arrange Mortgage
Finance.
Q: What is a Pre-Qualification?
A: A pre-qualification shows you the amount you are eligible
to borrow. It will estimate a maximum home sale price, loan amount and
deposit required for which you qualify based on your individual circumstances.
Be prepared to provide basic information such as income, debts and assets.
A quick call to one of our Mortgage Broker Specialists, and we can do
this over the phone for you.
Q: Can I apply for a loan before I have
a home to purchase?
A: Yes. You may provide the required documentation for
a loan approval to verify income, debts and assets prior to your purchase.
Once we obtain a credit report, we can make a credit only loan decision.
This process is called a pre-approval. Since the property to be purchased
is typically not known for a pre-approval, estimated sales price and loan
amount are used to make a loan decision. The interest rate will not be
locked-in until a final home purchase is made.
Q : Why get a Pre-Approval?
A: A Pre-Approval is a good idea when you are not sure
of “how much you can borrow” or if you have any extenuating
circumstances that could hinder getting mortgage finance..
Q: What are the advantages of a Pre-Approval?
A: If you have your finances “Pre-Approved”,
you are a more favourable purchaser to a vendor than the purchaser who
does not have their finances pre-approved.You have comfort in knowing
how much you can borrow and what exactly is the top purchase price you
can pay for a home.
Q: Why don’t I just go to the
Bank myself?
A: We help assess all your options, whereas the Bank
is restricted by being only able to present one view. Is this really in
your best interests?
Q: What is a Registered Valuation?
A: A Registered Valuation is a report, made by a qualified
person, who sets forth an opinion or estimate of property value. Among
other considerations of value, the appraisal uses recent local real estate
sales activity as a major basis for valuation.
Q: How important is my credit rating?
A: Your credit rating is an important consideration for
loan approval. Information on your credit report is used to determine
your history of meeting your obligations. Any late payments or other adverse
information contained in your credit report will receive additional review
during the underwriting of your loan application, and may require further
written explanations from you as we consider your loan request.
Q: Who do I contact once my loan is
in process and how would I update my application?
A: At Talk Mortgages, we pride ourselves on the on-going
support provided. For any alterations to your Mortgage, contact your Mortgage
Broker Specialist..
Q: What is Private Mortgage Insurance
(PMI)?
A: PMI is protection for the lender against loss if a
borrower defaults. Typically PMI is required if your deposit is less than
20 percent of the purchase price. For example, on a purchase price of
$100,000.00, PMI would be required if you put less than $20,000 (20% of
$100,000) as a down payment.
Q: Will I always have to pay Private
Mortgage Insurance (PMI)?
A: Yes, if your deposit is less than 20%. The Insurances
is a one off payment, which In most cases, can be added to the mortgage.
Q: Is there an application fee?
A: Yes, typically, the Lender can charge up to 1%. However,
as we liaise between you and the Lender, we negotiate all fees with Lender
to your best interests.
Q: What information do I need to apply
for a loan?
A: On all mortgage applications, Talk Mortgages will
ask for information regarding your employment, income, assets, debts and
the subject property. Other information may be needed depending upon your
situation.
Q: Do I have to pay for using Talk
Mortgages Services?
A: Most definitely not!. The Lender pays us for introducing
business.
Q: How long does it take?
A: Provided you have all the paperwork together, sometimes
it can take as little as an hour !
Q: Where do I find you?
A: Click on this link to find
your nearest Broker. However, if there is not one in your area, then click
on this link and we
will ensure a Broker contacts you as soon as possible.
Q: I have been declined for Mortgage
Finance by my own Bank – does this mean I do not qualify with another?
A: No – quite often, you may not qualify with one
Bank, but you do qualify with another. Our Specialised Consultants are
aware of the lending criteria of many Lenders, and are able to assist
you in choosing the most appropriate Lender / Bank for your individual
circumstances
Q: I have a mortgage on my property
– can I buy another property, or do I have to save for a deposit?
A: No, you do not have to save for a deposit. Quite often,
you can use the equity you have built up in your home to purchase another.
A quick call to one of our Specialised Consultants and we can tell you
“over the phone”
Q: What if I take out a mortgage and
then things go wrong for me financially or I lose my job so I can’t
afford the mortgage? Would I automatically lose my home?
A: No, lenders only repossess properties as a very last
resort. If you find you can’t afford your monthly mortgage payments
for whatever reason, the key is to talk to your Mortgage Broker Specialists
straight away and explain the problem. Don’t leave things to get
worse.
Q: When can I lock my interest rate
(Fixed)?
A: It can differ between Lenders, but typically, you
can lock your interest rate after your application has been approved with
no conditions. Depending on your requirements, sometimes a fee can be
involved.
Q: What term (length of loan) is best
for me?
A: While the monthly payments on a 30-year mortgage are
lower than those for a 15 -year mortgage, a shorter-term can save you
a considerable amount of money because of the way the mortgage amortizes.
Q: What are the Different types of Mortgages?
A:
Q: What is the difference between a Fixed Rate
Mortgage and a Floating Rate Mortgage?
A: A fixed rate mortgage is a loan in which the interest rate does not
change during the entire term of the loan. With this type of mortgage
your monthly payments for principal and interest never change.
A floating rate mortgage permits the lender to adjust the interest rate
periodically during the term of a loan. Floating rate loans generally
begin with an interest rate below a comparable fixed rate mortgage and
can allow you to buy a more expensive home. However, the interest rate
changes at the specified intervals depending on changing market conditions.
The right type of mortgage for you depends on many factors including;
- Your current financial picture
- How you expect your finances to change
- How long you intend to keep your house
- How comfortable you are with your mortgage payment changing from time
to time
- How much risk you are willing to take
Q: What is a Capped Rate Loan?
A: With a capped interest rate, the rate can't go above a certain level
for a set time – 1, 2 or 3 years – but it can come down.This
gives you certainty about your payments, and you get the benefit if interest
rates drop.
With a capped loan you also have the flexibility to change your payments
or to pay all or part of your loan back at any time – at no charge
Q: What is a Revolving Credit Loan?
A: Revolving Credit challenges traditional thinking about home loans.
It is an extremely powerful and flexible financial tool, which puts financial
control into your hands – hence you need to be disciplined.
This Mortgage combines your Mortgage, cheque and savings into one. These
accounts have the same access to the funds as they do with normal transactional
accounts, including cheques, ATM, and Eftpos, internet banking, direct
debits and phone direct.
Q : What is a reverse equity mortgage?
A : If you are looking for a mortgage without monthly payments and are
over the age of 60, a reverse mortgage may be a perfect fit.
A reverse mortgage is a loan based on the value of a home that requires
no monthly payment until the owner moves or dies. The loan is paid off
when the house is sold after they move or when the estate is settled after
a death.
Since there is no monthly payment, a reverse mortgage is relatively
painless. Income has little to do with qualifying so borrowers who would
not meet the criteria for many other loans would still be able to acquire
a reverse mortgage.
Q: What are "conforming" and "non-conforming"
loans?
A: A "conforming" loan meets loan limits and underwriting guidelines
established by the Mainstream Lenders, and "Non-conforming"
loans or mortgages exceed these limits such as adverse credit, self employed
with no financials etc….
Q: What is an Interest Only loan?
A: A mortgage is “interest only” if the scheduled monthly
mortgage payment – the payment the borrower is required to make
--consists of interest only.
The option to pay interest only lasts for a specified period, usually
5 to 10 years. Borrowers have the right to pay more than interest if they
want to.
If the borrower exercises the interest-only option every month during
the interest-only period, the payment will not include any repayment of
principal. The result is that the loan balance will remain unchanged.
For example, if a 30-year loan of $100,000 at 6.25% is interest only,
the required payment is $520.83. In contrast, borrowers who have the same
mortgage but without an IO option, would have to pay $615.72.
This is the "fully amortizing payment" – the payment
that would pay off the loan over the term if the rate stayed the same.
The difference in payment of $94.88 is “principal”, which
go to reduce the balance.
