Common Questions

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.

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.

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.

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.

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.

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.

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.

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.

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.

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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