Home and Commercial Loans
A professional mortgage broker will know who is offering what and who is and who isn’t performing up to scratch.
What our clients have to say about us
What our clients have to say about usWe have had relationships with many mortgage brokers over the years and have found our relationship with Ian to be the most beneficial, for not only us, but more importantly our clients. We would not hesitate in recommending Ian for any financing needs – Deanne P. Financial Planner
I sincerely recommend Paradime Home Finance’s services as I have total trust and faith in the work that they do for my clients and for me personally. – Lachlan S. Chartered Accountant
I am writing to say how impressed we were with both you as a person as well as a financial consultant. We really appreciated the speed with which you got things happening, your advice and your constant following up with Westpac – it certainly made it a lot easier for us. – Lynne F. Customer
Thank you for your advice, it has saved us heaps. We now have a self-managed super fund and are thinking of buying an apartment to rent. Trust me, we will be contacting you again in the near future. I can’t tell enough people about how good you are and what a blessing you have been with our finances. – Gerry and Lynn R. Customer
Why not give us a quick call and you can judge whether we are the right mortgage broker for you.
Call now on 02 4260 0800
We are here to assist you in making the right decision
When trying to analyze the various types of home loans, the question is “where do you start” and the answer is clearly with a mortgage broker. You see lender’s web sites provide very little detail and even when they do it can often be out of date or not pertinent to your situation. Limited offer discounts or fee waivers are rarely posted on the web sites and more so, many applicable fees are inexplicably absent.
Every lender has their own mortgage policy documents and these are usually 50 to 150 pages long. There is an enormous variation on what lenders consider acceptable even down the amount that they will let you borrow, their valuation policies and credit scoring policies are all different – making the wrong application can seriously damage your credit report.
A professional mortgage broker will know who is offering what and who is and who isn’t performing up to scratch. Your mortgage broker will know the little idiosyncrasies that may make one lender stand out as an ideal or terrible choice. In most cases the commission that lenders pay your broker to originate your loan is sufficient to cover all of your brokers costs and so in most cases you get professional advice and service for free.
Common Questions
Pre-Approval or Conditional Approval
These term are often used synonymously however a ‘pre-approval‘ is usually just a brief look at your circumstances without any serious checks. You do not want to rely on a pre-approval for an auction.
A ‘conditional approval’ is where the lender has done a full and thorough review of your application and approves the loan subject to a range of conditions. If you are very confident that you can meet the conditions then you can move forward with more.
For an auction ideally the only condition should be ‘satisfactory security‘. This means the property has to be the size, type and location roughly indicated in the original application AND the valuation must agree with the purchase price.
What is LVR
LVR stands for Loan Valuation Ratio and is probably this single most important calculation for lenders. The higher the LVR, the greater the risk that the loan will go into default. Typically the best deals are offered to “Prime Loans” with LVR below 80%
The value is always assumed to be the lower of the purchase price or the valuers estimate.
It is calculated as ( Loan Amount / Value ) x 100 For example borrowing $350,000 for property valued at $450,000 the calculation is 350,000 / 450,000 = 0.7778 x 100 = 77.78%
LMI
LMI stands for Lender’s Mortgage Insurance. This covers the lender if you default on the loan but it does not cover you the borrower. You are still liable and if the property is sold the insurer will take the proceeds to cover their costs.
LMI applies to most loans with an LVR greater than 80%. The lender decides which insurer they will use. The premium increases as the loan amount increases and/or as the LVR increases.
The LMI premium is paid by you, usually added onto the loan (capitalised). It is a one off, normally unrefundable payment and not transferable to another security.
What is “equity”
Your equity is the value of the property less the loan balance in the mortgage secured by that property. So if you sold the property is the money you have left over after the bank is paid out.
However when you want to use your equity, say for an investment then banks calculate your ‘available equity‘ as 80% of the value, less the current loan balance.
How does a bridging loan work
A bridging loan allows you to purchase a new property before you have sold your existing property. The ‘peak debt‘ during that period more than you can afford but the bridging is a temporary IO ( 6 months) and you only have to be able to service the end debt.
Not all lenders offer bridging loans
Explain a guarantee
We have a detailed article here /how-do-guarantees-work/
