fREQUENTLY ASKED QUESTIONS
Our FAQ section should provide you with some of the most commonly asked questions. If you do not find what you are looking for please get in touch.
What is a finance specialist/broker?
A Finance Specialist is an intermediary between the borrower and the lender who uses their extensive knowledge and software to source competitive rates and facilitate a smooth process to settlement. The Finance Broker acts in the borrower’s best interests at all times and is their project manager, handling all the steps in the process and reporting back to the borrower at the various stages.
Why use a finance specialist/broker?
There are a wide range of finance products out there and it can be confusing to try and compare them all. A Finance Specialist will help navigate through the options by explaining the differences between products and help the borrower choose a loan that suits their specific needs. Once a product is chosen, a Finance Specialist will make sure things happen on time and the borrower is fully informed every step of the way.
what is pre-approval?
A pre-approval is confirmation from the lender they are happy with the scenario your Finance Specialist/Broker has prepared and submitted, providing their conditions are met. There may be specific conditions requested but there are some that are standard as follows:
A satisfactory valuation resultEmployment checkFormal acceptance from the mortgage insurer (if applicable)A pre-approval usually lasts for 90 days, at which time your Specialist/Broker will be in touch to renew, if you haven’t made a purchase by that time.
What is Lenders’ Mortgage Insurance?
Mortgage insurance is usually required when a lender provides a loan that covers more than 80% of the purchase price or valuation, whichever is the lower. It is designed to cover the lender for their risk and protects them in the event that the property needs to be sold. If the lender suffers a loss on the sale, they claim payment from the mortgage insurance company. The insurer then pursues the borrower for the amount they paid the lender. The insurance offers the borrower no protection whatsoever and is a once off charge which can be added to the loan amount in certain circumstances. The price of the premium depends on the loan to value ratio of the property purchased.
What happens when I buy a property?
When you sign a contract to buy, your Finance Specialist/Broker converts the pre-approval to full approval.
They will collect a copy of the fully signed contract and Section 32 which is then sent on the lender. A valuation is often ordered.Once the valuation is accepted and all other conditions are met, the lender issues an unconditional approval and a formal loan offer for signing. Another appointment is scheduled so that your broker can fully explain the loan offer, and you can sign it.
Within 3 or 4 days of receipt of the signed loan offer, the lender moves your file to their settlements area who liaises directly with your conveyancer to book a settlement time on the agreed day.
WHAT is a section 32?
Also called the Vendor’s Statement, the Section 32 contains details about the property such as planning permits, building approvals, title copies, council rates charges and subdivision plans.