Never be afraid to ask!
It doesn't matter if you are a beginner or have been investing for many years, it's never too early or too late to start asking questions. It's almost impossible to ask a dumb question about how you are investing your money. Don't feel intimidated. Remember, it's your money at stake.
We welcome your questions, no matter how basic. We know that an educated client is an asset, not a liability. We would rather answer your questions before you invest, than confront your anger and confusion later.
Here are some questions you might want to ask us before you start to get the ball rolling:
- Do you have your own Credit License?
- Are you a member of the Mortgage Finance Association of Australia (MFAA)
- How much experience do you have as a mortgage broker?
- Why should I use a mortgage broker?
- What lenders are on your panel?
- How do you get paid?
- Do you charge any fees?
- How do you decide which loan is best suited to me?
- What information do you need to obtain my finance?
- What are the key milestones when processing my finance application?
- How long will it take to get my loan approved?
- What are all the costs in taking out a loan?
- What is Lenders Mortgage Insurance?
- Can you process the First Home Owners Grant for me?
- Does my Credit Report affect my ability to obtain finance?
Frequently Asked Questions
Here are some FAQs on definitions and general finance that we often encounter
You need to allow for establishment fees, government fees and stamp duty and solicitor costs. Instead of paying for these in cash you can always borrow funds for these, which could allow you to invest in property sooner.
We have many clients who are self employed and who are building a strong portfolio. We should talk through the options.
This will depend on your finance structure, loan-value ratio and the state of the market at the time. Ideally you would work with us as part of a structured plan.
Cross-collateralising occurs when more than one property is used as security to support a loan. Under cross-collateralisation, if you default on a loan you can lose both properties. Cross-collateralisation can limit flexibility in the future.
A Deposit Bond is a guarantee to the vendor by an insurance company or bank, that they will receive their 10% deposit, even if the purchaser defaults on the contract of sale. Through the payment of a small insurance premium you are able to provide this guarantee to the vendor. For anyone purchasing property, these bonds provide the following benefits:
- Cost effectiveness
- Useful for asset rich/cash poor customers who wish to invest in property and already own their own home
- Purchasers don't need to go to the expense and time delay of arranging short-term finance for the deposit
- Convenience for home buyers who may have finance approval or assets tied up in other investments
- Purchasers can keep accruing interest on their savings up until the day of settlement
- Convenient for auctions
Deposit bonds are often used:
- When purchasing a property, but funds are not available for the deposit
- When the purchaser does not wish to pay a penalty for breaking a fixed investment or selling shares
- If a purchaser wants to attend more than one auction before they decide which home to purchase
- When the purchaser is an investor and the loan funds are not available until settlement
Your home is an asset that increases in value over time. As you pay off your home loan you build equity in the property that can also be used in lieu of cash as equity in another property you may want to purchase as an investment.
Positive gearing is when the income generated by a property exceeds the cost of owning that property. Tax implications may apply to this gain.
Negative gearing is when the cost of owning a property exceeds the income generated by a property, possibly creating a tax deduction for you.
As long as your Super Fund is self-managed and meets certain conditions, the answer is 'yes'. Due to the complex nature of lending to Super Funds process, you should talk to us for advice and help.
You only have a certain window of opportunity for investment activity, based on how many working years you have until you retire. The market tends to cycle every 7-10 years so it's best to stay in a cyclical rhythm. Work backwards from when you want to retire and get into a rhythm of purchasing an asset every one, two, three years etc, depending on your goal and your financial resources.
It depends on market conditions. In a growth market you can sometimes see results before the house is completed. In a slower market situation, it can take two to three years before you see enough growth to enable you to duplicate, depending on your loan-value ratio.