FAQ
How much experience do you have as a mortgage broker?
Kerry McKenzie, our Principal Mortgage Broker, has been in the finance industry for over 31 years.
Why should I use a mortgage broker rather than going straight to the bank?
There is a huge choice in the mortgage market today and the choice can become overwhelming. We can sift through all this information for you and save you valuable time. We have a panel of lenders so can sort through these lenders to find the right loan for your circumstances. Some penalties, fees and charges aren’t obvious and a mortgage broker can help to avoid a loan that looks great on the surface but is expensive underneath.
Do you have your own Credit License or are you a Credit Representative?
KLM finance operate as credit representatives.
How do you decide which loan is best suited to my personal situation?
There is a huge array of options when choosing the right loan, from which features are suitable to fees to the right structure. This is where we work with you to analyse the loans in the marketplace to come up with a solution that meets your needs both now and into the future. . We will come up with the best match for your income, goals, budget and lifestyle.
Do you charge a brokerage fee for getting my finance approved?
We do not charge any fees for our standard service. We will do all the legwork of applying for your loan and getting the finance approved with no charge to you.
What commissions do you get paid for writing my loan?
The amount of our commission varies depending on which bank the loan is submitted to, the loan type (which can be from .5% to .7%) and also if there are any clawbacks on loans if you pay them out within the first 2 years.
How much of a deposit do I really need to obtain a loan?
The amount required for a deposit varies markedly depending on the type of loan (eg owner occupied or investment), the lenders guidelines and the amount you are borrowing. A general rule of thumb is to aim for a deposit of 10-20% of the purchase price. A minimum 20% deposit + costs is required to avoid Lenders Mortgage Insurance (LMI). More on LMI later…..Of course, the larger the deposit, the less you will need to borrow which leads to lower repayments and paying less interest.
What impact will my credit card limits have on my borrowing capacity?
The higher the credit card limits you have, the smaller amount you will be able to borrow. The banks work on a minimum payment of 3% per month of the credit card limit, regardless if you have any outstanding balance.
What fees will I incur when taking out a home loan?
There are numerous fees that you will incur when buying a home and taking out a mortgage.
- Stamp duty
- Conveyancing fees
- Property inspections
- Loan establishment and other bank fees
What is a comparison rate?
A comparison rate aims to compare loans like for like to take into account any upfront fees and ongoing charges. The aim of the comparison rate is to aid consumers to make an informed judgment of the total costs of a loan. This will help them more accurately compare various like loan products and services offered by various lending institutions.
What features are included in my new loan? What information do I need to provide you to obtain my finance?
Features included in a loan depend largely on what type of loan you require, whether you are after all the bells and whistles or a bare bones loan with a low interest rate.
You can choose from a wide range of features including whether to split a loan between fixed and variable interest, having an interest only loan, establishing a line of credit, redraw facilities or having an offset account attached to the mortgage.
This is where we can help you to wade through all these options and features to choose the most appropriate loan for your circumstances
You can choose from a wide range of features including whether to split a loan between fixed and variable interest, having an interest only loan, establishing a line of credit, redraw facilities or having an offset account attached to the mortgage.
This is where we can help you to wade through all these options and features to choose the most appropriate loan for your circumstances
What information do I need to provide you to obtain my finance?
We will give you a list of required documents at the time of discussing your loan requirements. These documents can include but again different with each bank :
- Personal ID – normally a driver’s license
- Property information like contract of sale if applicable
- Bank transaction statements
- Liabilities – Loan and credit card statements
- Income – pay slips, tax return
- A list of expenses like rent and utility bills
- Any investments you may have
- Most recent superannuation statement
What are the procedures that I need to follow in order to obtain my finance and settle my loan?
There are a number of necessary steps in order to make the loan application process go as smoothly as possible. The following are briefly what is required:
- Research the area you are buying into and what type of property you are interested in
- Meet up with us for an initial meeting to discuss your requirements
- Supply all the necessary documents in order to assess the loan and meet the lenders criteria
- We will then assess your file and submit your application with recommendation for approval
- If successful, conditional approval is given which may include valuations of the property/s
- Once the loan has unconditional approval, you will be advised and the conveyancer will also receive notice
- You will meet up with us again to sign all the loan documents. These documents are normally issued directly to our office so they can be checked off and prepared.
- These signed loan documents are then sent to the lender. Your conveyancer will call up the lender once all documents are processed and book in settlement.
Can I choose to fix my interest rate in at a later stage?
Yes you can. The main issue to consider here is what the interest rates will be in the future and what the fixed rates may be at that time. The alternative is to choose a split loan where you can fix part of your loan now and leave the remaining on a variable rate.
If I choose to take out a fixed interest rate can I choose to lock my fixed interest rate in prior to settlement?
Yes you can. There is a feature available to consumers called rate lock. By choosing the rate lock option, you can be certain that your rate will be the same as when you applied. This option works by locking in current rates for a fixed term, normally up to 90 days. Lenders do charge a fee for this, however.
How long will it take for you to obtain the appropriate finance for my needs?
This will depend on having all the correct documentation at the start of the process. If the lender has all the required documentation at the start of the application process, it will certainly speed up the decision. Obtaining pre-approval usually takes up to 5 working days, assuming all documentation is submitted. Once the full unconditional approval is granted, the conveyancer will liaise with us according to the contract of sale timelines to have the finance in place when required.
Can you explain to me what Lenders Mortgage Insurance is for?
You will be required to pay Lenders Mortgage Insurance (LMI) when you are borrowing more than 80% of the property’s value. This insurance is designed to protect the mortgage lender against loss incurred by a mortgage default. We will advise you on the costs of LMI if this is applicable to your situation.
Will you process the First Home Owner’s Grant for me?
Contact us about the requirements for the First Home Owners Grant and your eligibility. We can certainly help you process this grant as part of the lending process.
If I have a default on my Credit Report will this impact on my ability to obtain a loan?
Your credit rating is checked as part of the loan application process. So exceeding credit card limits, or if you haven’t paid your bills can negatively affect your loan application. Every time you apply for credit is also listed on this report.