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Common Questions

What factors should I consider when deciding how much I can afford to borrow for a home loan?

When determining your borrowing capacity, consider factors such as your income, expenses, existing debts, credit history, down payment amount, and the interest rate. It’s essential to ensure that your mortgage repayments are manageable within your budget to avoid financial strain. We can usually calculate your borrowing capacity quite quickly here at Smyth Loan Co having via very reliable serviceability calculators.

What documents do I need to provide when applying for a home loan?

Common documents required for a home loan application include proof of income (such as 2 x most recent pay slips, latest financial year’s income statement, or tax returns), identification documents (such as driver’s license or passport), bank statements, proof of assets, and details of existing debts and liabilities.

What is the difference between a fixed-rate and variable-rate home loan?

A fixed-rate home loan has an interest rate that remains constant for a set period, providing borrowers with predictability and stability in their repayments. In contrast, a variable-rate home loan has an interest rate that can fluctuate over time based on market conditions, potentially resulting in changes to your monthly repayments.

How much deposit do I need to buy a property?

The deposit required to purchase a property typically ranges from 5% to 20% of the property’s purchase price, depending on factors such as the lender’s requirements, loan-to-value ratio, and whether you qualify for government schemes or incentives. When factoring in purchase costs on top of this minimum 5% noted, as a general rule of thumb we state around 13% of any purchase price is required as the minimum deposit without any reliance on Government Grants.

If you have parents or family that can put up additional security & go as a guarantor on your loan (i.e. a security guarantee), then in theory you may get away with not holding a deposit at all – some banks will lend you up to 105% of the purchase price. Speak to us at Smyth Loan Co about his further as guarantor lending can be a little complex and hard to understand. There are implications for the guarantor that also need to be discussed separately to the borrower.

What is mortgage pre-approval, and why is it important?

A pre-approval is a conditional approval from a lender indicating the amount you may be eligible to borrow for a home loan, based on your financial situation and creditworthiness. Pre-approval gives you a clear idea of your budget when house hunting and shows sellers that you are a serious buyer.

What additional costs should I budget for when buying a property?

In addition to the purchase price, budget for additional costs such as stamp duty, legal fees, conveyancing costs, property inspection fees, loan application fees, lender’s mortgage insurance (if applicable), and ongoing costs such as property taxes, homeowners insurance, and maintenance expenses. We can give you an indication of what you would be paying on most of these costs after a quick discussion.

How do I compare different home loan options?

When comparing home loan options, consider factors such as interest rates, loan features (such as offset accounts or redraw facilities), repayment terms, fees and charges, flexibility, customer service, and the lender’s reputation and reliability. As mortgage brokers we will help you with this and recommended the best 3 x suited options towards your needs in all instances. It is important to also check the comparison rate of any loan as this is the true rate of the loan over time, inclusive of any upfront OR ongoing fees.

What is lender's mortgage insurance (LMI), and when is it required?

Lender’s mortgage insurance (LMI) is insurance that protects the lender in case the borrower defaults on the loan and the property is sold for less than the outstanding loan balance. LMI is typically required when the borrower’s deposit is less than 20% of the property’s purchase price.

How long does it take to get approved for a home loan?

The time it takes to get approved for a home loan can vary depending on factors such as the lender’s processing times, the complexity of your application, and the completeness of your documentation. Generally, it can take anywhere from a few days to a few weeks to receive approval. We will give you an idea on timeframe once a we’ve completed an initial assessment of your situation and noted down your requirements.

Why should I consider using a mortgage broker to help me find a home loan when I can go straight to a bank?

Mortgage brokers provide valuable assistance in navigating the home loan process by helping you compare loan options, negotiate with lenders, and complete the application paperwork. Brokerages such as Smyth Loan Co, should be reputable and experienced (always check reviews), and they should always have your best interests in mind. Over 70% of all home and investment loans in Australia now are completed through Mortgage Brokers.

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Ready to discover the keys to increasing your borrowing capacity? We’re sharing our best tips to help you improve your borrowing power! 🔑📈

Tip 3: Optimise your expenses

How much you’re spending day-to-day can play a role in determining what you can borrow. Take a closer look at your monthly expenses - from service providers to healthcare and of course, Uber Eats! Identify areas where you can trim and ideally redirect those funds towards loan repayments.

If you want to chat to an experienced broker who can help you identify ways to increase your borrowing capacity, get in touch today!

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💡 If you’re an investment property owner, understanding property depreciation is essential! Here’s why:

🏡 What is property depreciation?

Property depreciation is a tax deduction available to investment property owners. It refers to the wear and tear on the building and its fixtures over time, not the overall market value of the property.

🔍 How does it work?

The Australian Taxation Office (ATO) allows you to claim deductions in two ways:

Diminishing Value Method: Higher deductions in the early years.

Prime Cost Method: Equal deductions over the property’s life.

📉 Example:

Diminishing Value: If your property was purchased for $500,000, you could claim $25,000 in the first year.

Prime Cost: With a 2.5% annual deduction, you would claim $12,500 each year.

💸 Why claim depreciation?

Claiming depreciation reduces your taxable income, meaning you pay less tax. This reflects the natural wear and tear on your property.

🤔 Want to learn more? Hit follow or reach out to us today!

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Reminder! 🚨

We can help with a wide range of services including home loans, business loans, asset finance, debt consolidation, refinancing and much more!

Reach out today via the details on our page to learn more.

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Need to bridge the gap between your current and future home? 🏠💰

Whether you're upsizing, downsizing, or relocating…bridging loans offer the solution to seamlessly transition to your next property, before selling your current one.

Contact us today via the info on our page to learn more!

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... just a quick one though! 

Loans 📈📉 to write 💻🖱✍️ 
Dreams 🌄🏠 to secure ✨️ ✅️ 

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Ready to discover the keys to increasing your borrowing capacity? We’re sharing our best tips to help you improve your borrowing power! 🔑📈

Tip 2: Income — Higher income translates to a higher borrowing capacity.

If you’re able to, explore opportunities to increase your earnings: take on extra work, negotiate a raise, or tap into alternative income streams.

If you’ve recently increased your overall income and want to chat to a professional about what it means for your borrowing capacity, get in touch today!

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Don't let financial stress weigh you down! 📉 It's time to take control of your finances and explore your options.

💰✨ Refinancing your loan could be the game-changer you've been looking for. With our expert guidance, you can potentially lower your interest rates and save big bucks in the long run. 🏡💸

Don't wait until it's too late! Reach out today and let's discuss how we can help you ease that pressure and put more money back in your pocket.

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Not bad on the cheeks either #goodchair 😂