Frequently Asked Questions
We understand navigating the world of home loans, refinancing, and financial planning can feel overwhelming.
That’s why we’ve answered the most common questions below.
Legal Disclaimer: The information provided in this FAQ section is general in nature and intended for informational purposes only. It is not financial or legal advice. For advice specific to your personal circumstances, we recommend consulting with a licensed financial advisor or legal professional.
Home Loans & Refinancing
Refinancing replaces your existing loan with a new one to lower your interest rate, consolidate debts, or access your equity.
Save on your loan—Get a free refinancing review!
Yes, but early break costs may apply. These fees should be carefully weighed against the potential savings from refinancing.
Not sure if it’s worth it? Talk to our experts!
Your borrowing capacity depends on your income, expenses, credit score, and deposit size. Use our calculator to get an estimate.
Options include refinancing to a lower rate, extending your loan term, or consolidating debts.
Find ways to save—Start with a quick repayment review.
First Home Buyers
The FHOG is a government initiative offering financial support to eligible first home buyers. Grant amounts vary across states.
Check if you qualify—Get in touch now.
Depending on your state, first home buyers may receive full or partial exemptions, especially for properties under a certain value.
See how much you can save—Contact us for details.
A deposit between 5–20% is standard. However, loans with deposits below 20% often require lenders’ mortgage insurance (LMI).
Need help with a low-deposit loan? Talk to us today.
Self-Managed Super Funds (SMSFs)
Yes, your SMSF can purchase property for investment purposes, but strict rules apply. The property cannot be used for personal purposes.
Looking to invest through your SMSF? Let us guide you.
Risks include reduced diversification, complex borrowing rules, and higher management costs.
Make informed decisions—Book an SMSF consultation.
Yes, this is possible through a limited recourse borrowing arrangement (LRBA). However, there are strict legal and financial rules to follow.
Unsure about SMSF borrowing? Talk to our team.
Stamp Duty
Stamp duty is a tax applied to property transactions, and the amount depends on your state or territory.
Certain groups, like first home buyers or those buying off-the-plan properties, may qualify for exemptions or concessions.
Confused about stamp duty? Get tailored advice.
Use our Stamp Duty Calculator to estimate how much you’ll need to pay.
Other Common Questions
Variable-rate loans will see an increase in monthly payments. Fixed-rate loans remain stable until the fixed period ends.
A comparison rate reflects the true cost of a loan by combining the interest rate and most fees into one figure.
Yes, there are lenders that specialise in bad credit loans, but they typically have higher rates or stricter conditions.
Explore your options—Talk to us about bad credit loans.
Debt consolidation involves combining multiple debts into a single loan to reduce repayments and potentially save on interest.
Simplify your finances—Ask about debt consolidation loans
A mortgage broker acts as an intermediary between you (the borrower) and lenders. They use their expertise and advanced tools to find competitive rates and ensure a smooth path to settlement. A mortgage broker works in your best interest, managing the entire process from start to finish. They keep you informed at every stage and handle all the necessary steps to secure the best possible mortgage terms tailored to your needs.
With countless mortgage products available, comparing them all can be overwhelming. A mortgage broker simplifies this process by explaining the differences between options and helping you select a loan that suits your unique needs. Once you’ve chosen a product, the broker ensures everything stays on track and keeps you fully informed every step of the way. They handle the legwork, so you don’t have to.
Our services are free of charge to you. We receive a commission from the lender you choose, which is fully disclosed upfront. Government and lender fees and charges may apply.
Initially, your mortgage broker will provide you with our Credit Guide, outlining our general remuneration. Once you decide to proceed with us, we will give you a Credit Proposal Disclosure document, detailing the exact amount the lender will pay us after your loan settles.
In certain cases, additional fees may apply—for example, with a bridging loan that has no end debt. This will always be discussed with you upfront so you understand the process.
Our advice is always based on what is best for you, regardless of our commission. Ensuring our clients’ satisfaction is our top priority, as we depend solely on your reviews and referrals to sustain our business.
Start your mortgage journey with us today – no hidden fees, just expert advice!
Using a mortgage broker offers several key advantages:
Access to Multiple Lenders: Mortgage brokers have a broad network of lenders, including major banks, credit unions, and non-bank lenders, helping you find a loan that suits your specific needs.
Expert Guidance: As licensed professionals, mortgage brokers provide expert advice, helping you understand your options and make informed decisions.
Time-Saving: Brokers do the legwork for you, researching and comparing loan products to find the best options, saving you time and effort.
Negotiating Power: Mortgage brokers can negotiate better interest rates and loan terms on your behalf.
Personalised Service: Working one-on-one with you, a mortgage broker understands your unique financial situation, ensuring a smoother and more comfortable home loan process.
Absolutely not! Our industry is governed by the National Consumer Credit Protection Act (NCCP), which ensures ethical and professional standards to protect consumers. We disclose our commission from the bank upfront. Our sole focus is to find the best loan that meets your needs and financial situation, regardless of the commission paid by the lender. Our advice is based entirely on what is in your best interest.
Finding the right loan can be overwhelming, especially when there are so many options to consider. Banks offer a range of loan products, such as low doc loans, package loans, fixed and variable rates, interest-only loans, and more. But these options are limited to the products of that particular bank.
By choosing a FAFS mortgage broker, you gain access to a broad network of over 40+ lenders, including banks, credit unions, and non-bank lenders. We have access to thousands of loan products, giving you a wider variety of choices than any single bank can offer.
Unlike a bank, a FAFS broker ensures that we act in your best interest. We are not tied to any specific lender, meaning we can explore a vast array of options to find the best loan that suits your financial needs. We handle all the legwork, comparing loan products from a wide range of lenders, so you don’t have to.
At FAFS, our commitment to you doesn’t end at settlement. We receive an ongoing trailing commission from your chosen lender, allowing us to provide continuous support throughout the life of your loan.
We are always available to answer any questions and assist with adjustments, such as switching loan products or locking in a fixed interest rate. Each year, your broker will review your loan to ensure it continues to meet your changing needs. Additionally, we’ll compare your loan with offers from other lenders and negotiate with your current lender to secure the best possible rate.
Our goal is to offer ongoing support and ensure your loan remains aligned with your best interests.
A pre-approval is a confirmation from the lender that they are willing to lend you a specified amount, based on the information your broker has provided. However, this approval is conditional, meaning it depends on certain criteria being met. Common conditions include:
Formal approval from the mortgage insurer (if applicable)
A pre-approval is typically valid for 90 days. If you haven’t purchased a property within this timeframe, your broker will reach out to you to renew the pre-approval.
Once you sign the contract to purchase a property, your broker will work to convert your pre-approval into full loan approval.
Here’s the process:
Document Submission: Your broker will collect the signed contract and Section 32, then send them to the lender. A property valuation is usually ordered at this stage.
Unconditional Approval: After the property valuation is accepted and all conditions are met, the lender will issue an unconditional approval, along with a formal loan offer.
Loan Offer Signing: Your broker will schedule a meeting to thoroughly explain the loan offer. Once you are comfortable with the terms, you will sign the loan offer.
Settlement Coordination: Within 3-4 days of receiving the signed loan offer, the lender will forward your file to the settlements department. They will work directly with your conveyancer to schedule settlement on the agreed date.
What Happens After Your Loan Offer Is Received? Reaching Settlement
Once your signed loan offer is received, the lender typically moves your file to their settlements team within 3 to 4 days. This team will work directly with your conveyancer to schedule the settlement on the agreed date.
One Week Before Settlement:
Your conveyancer will calculate the final amounts for council and water rates. They will notify you if there is any shortfall, which you will need to cover via bank cheque or transfer from your account.
On Settlement Day:
Your conveyancer will coordinate with the lender to officially transfer the property ownership into your name. Once the transfer is complete, you can pick up the keys from the agent!
Yes, it’s highly recommended to have a conveyancer when purchasing property. A conveyancer is a legal professional who specialises in managing the legal aspects of property ownership transfer. They ensure everything is handled correctly and your interests are protected.
Here’s why you need one:
Contract Review: Ensures the contract of sale is fair and that there are no unfavourable terms.
Property Searches: Conducts checks for unpaid rates, zoning restrictions, or legal disputes.
Coordinating with Lenders: Works with your lender to ensure all mortgage documents are correct and funds are ready for settlement.
Settlement Coordination: Manages the final transaction on settlement day, ensuring payment and title transfer are completed.
Legal Compliance: Ensures the transaction complies with legal requirements and is properly registered.
While you can technically handle conveyancing yourself, the process is complex and risky. Most people choose to hire a conveyancer for a smoother, legally sound transaction.
Lenders Mortgage Insurance (LMI) is insurance that protects the lender (not the borrower) in the event the borrower defaults on their home loan. It is typically required when the borrower’s deposit is less than 20% of the property’s purchase price. Here’s how it works:
How LMI Works:
Purpose:
LMI protects the lender if the borrower cannot repay the loan. If the property is sold for less than the outstanding loan balance, the insurance covers the difference.
When LMI is Required:
LMI is usually needed when the loan-to-value ratio (LVR) exceeds 80%, meaning the borrower is borrowing more than 80% of the property’s value. For example, if you purchase a $1,000,000 property with a $100,000 deposit (10%), your LVR is 90%, and LMI will likely be required.
Cost:
The cost of LMI can vary based on the size of the loan, LVR, and the lender’s policies. It can amount to thousands of dollars, usually paid as a one-off fee at settlement. Alternatively, it may be added to the loan amount and repaid over time.
Key Takeaways:
LMI is required if your deposit is less than 20% (LVR over 80%).
It protects the lender in case of borrower default, not the borrower.
The cost can be added to the loan or paid upfront.
While LMI adds extra costs, it enables you to buy a home with a smaller deposit, making homeownership more accessible sooner.
Yes, a parent can help their child bypass the cost of Lenders’ Mortgage Insurance (LMI) by using a portion of their home equity as security for the loan. This can reduce the lender’s risk, allowing the borrower to keep the loan-to-value ratio (LVR) below 80%, which is the typical threshold for requiring LMI.
Here’s how it works:
By combining the borrower’s deposit with the parent’s equity—usually from their home or investment property—the LVR stays under 80%, thus avoiding LMI. Your broker can guide you through this process to ensure all requirements are met.
However, it’s crucial for parents acting as guarantors to seek independent legal advice. They need to fully understand their rights, responsibilities, and any potential risks involved.
A Section 32, also known as a Vendor’s Statement, is a legal document provided by the seller to the buyer before a property contract is signed. Required by the Sale of Land Act 1962 in Victoria, Australia, this document provides essential information about the property to help buyers make informed decisions.
Key details included in the Section 32 statement are:
Title Details: Information on the property’s title, including any restrictions, easements, or encumbrances.
Zoning Information: The property’s zoning, indicating its permitted land use (e.g., residential or commercial).
Rates and Outgoings: Information about council rates, water rates, and owners’ corporation fees.
Building Permits: Any permits issued for construction or renovation within the last 7 years.
Services: Details on services connected to the property, like electricity, gas, and water.
Notices and Orders: Any legal orders or notices issued for repairs, demolitions, or compliance.
Insurance: If part of an owners’ corporation, insurance details may be included.
Planning Information: Any planning or development restrictions that may affect the property.
The Section 32 ensures transparency, helping buyers identify potential issues before purchasing. It’s crucial for buyers to carefully review this document, ideally with the help of a conveyancer or solicitor, to avoid any surprises.
When purchasing a property, the process varies depending on whether it’s a private sale or an auction. Here’s how they differ:
Private Sale
Negotiation: Buyers and sellers negotiate the price and terms. The seller sets an asking price, and buyers can make offers at or below it. This process may take several days or weeks.
Cooling-Off Period: Most Australian states offer a cooling-off period (typically 3-5 business days), giving buyers the chance to reconsider and withdraw from the sale with minimal penalty.
Conditions: Buyers can make offers subject to conditions, such as finance approval, inspections, or the sale of another property. These must be satisfied for the sale to proceed.
Less Pressure: Private sales allow for more time to consider offers, seek legal advice, and make informed decisions.
Price Transparency: The asking price is usually advertised, but the final sale price can be negotiated and may not be disclosed until after the sale.
Auction
Competitive Bidding: Buyers bid openly in a public forum, with the property going to the highest bidder. Bidders must register before the auction starts.
No Cooling-Off Period: Once the hammer falls, the sale is final. There’s no cooling-off period, so buyers must be ready to proceed immediately.
Unconditional Sale: Auctions are unconditional, meaning no contingencies (like finance or inspections) apply. Buyers need to have their finances and inspections sorted before the auction.
Transparency and Finality: All bids are made openly, and the highest bid at or above the reserve price secures the property.
Potential for Overbidding: Auctions can escalate quickly, leading to higher prices as buyers compete. It’s important to know your limit and stick to it to avoid overpaying.
Summary
Private Sale: Negotiated terms, potential cooling-off period, and conditional offers. The process is more relaxed and flexible.
Auction: Public, competitive bidding with no cooling-off period, and unconditional terms. The final price is determined instantly.
Choosing between private sale and auction depends on market conditions, property type, and the seller’s preference. Buyers should prepare accordingly and seek legal advice to ensure a smooth experience.
It’s disappointing when a loan application is declined, but this doesn’t mean all hope is lost. A rejection could simply mean that the lender’s credit policy didn’t align with your specific financial situation. Fortunately, there are many other lenders, each with their own criteria, and one may be a better fit for you.
As finance brokers, we work with a wide range of lenders and understand the nuances of their policies. We can assess your application, identify potential issues, and help you explore alternative lenders who may be more open to your circumstances. If needed, we can also guide you on improving your financial profile—whether that means addressing credit report issues, reducing existing debts, or saving for a larger deposit—which could improve your chances of approval in the future.
Our goal is to help you find the right loan and get back on track toward achieving your financial goals.
Step 1: Understand the Challenge
It’s common to feel frustrated when your bank’s credit policy doesn’t align with your needs. Your current lender may have limitations that prevent you from borrowing the amount you need, but this doesn’t mean all options are closed off.
Step 2: Acknowledge the Variability Across Lenders
Different lenders use unique methods to calculate your borrowing capacity. This means that the amount you’re able to borrow could vary significantly between different banks and financial institutions. Just because one lender says “no” doesn’t mean others will.
Step 3: Explore Alternatives
The key is to not limit yourself to your current lender. By working with a Funds Assist Financial Services FAFS mortgage broker or credit advisor, you can access a wider range of lenders, each with different policies and borrowing limits. We can help you find the right lender who can offer you the loan amount you need.
Step 4: Get a Tailored Solution
We will assess your individual financial situation and match you with the lender whose loan terms and conditions best align with your goals. This personalised approach increases your chances of securing a loan that works for you.
Step 5: Increase Your Borrowing Power
In addition to finding a lender that suits your needs, there are several strategies to increase your borrowing capacity:
- Consolidate debts to reduce monthly repayments
- Adjust your financial profile (e.g., saving for a larger deposit)
- Explore different loan structures or products that may offer better terms
Step 6: Secure the Loan You Need
Our goal is to ensure that you not only get the loan amount you need but also work with a lender whose terms benefit your long-term financial wellbeing. We’ll guide you through the process to help you achieve your financial goals, even if your first attempt was declined.
By following these steps, you can find the right solution for your borrowing needs and get back on track to securing the loan you want.
As a first home buyer, limited savings can feel like a significant obstacle, but your parents may be able to help through a Guarantor Support arrangement. In this scenario, your parents use their own property as additional security for your home loan.
Here’s how it can help:
Increase Borrowing Capacity: By leveraging your parents’ property, you may be able to borrow more than you could on your own. This is especially beneficial if your savings fall short of the standard 20% deposit.
Avoid Lenders Mortgage Insurance (LMI): With a guarantor, you could potentially avoid the extra cost of LMI, which is typically required when your deposit is less than 20% of the property value.
This arrangement can provide you with the financial boost you need to secure your first home, while also helping to reduce costs associated with low deposits. However, it’s important that your parents seek independent legal advice to understand their responsibilities and risks.
As a guarantor, you’re not necessarily tied to the loan for its entire term. You can seek to be released from your guarantor obligations once certain conditions are met, such as a reduced loan balance or an increase in the property’s value. Here’s how it works:
Paying Down the Loan: Once your child has made significant progress in paying down the loan, the lender may no longer require additional security. At this point, you can request to be released from your guarantor role.
Increase in Property Value: If the property’s value rises, it can lower the Loan-to-Value Ratio (LVR). For example, if the property value increases enough to bring the LVR below 80%, you may no longer be required as a guarantor.
To start the release process, your child will typically need to request a property valuation from the lender to confirm the LVR is within the acceptable range. Once the release is granted, both you and your child should ensure that all formalities are completed and there are no remaining obligations. Regularly reviewing the loan balance and property value will help determine the best time to initiate this process.
Yes, some lenders do accept guarantors who are not directly related to the borrower. While most lenders prefer guarantors to be parents, children, spouses, de facto partners, or close relatives (such as aunts, uncles, or parents-in-law), there are a few lenders that will also accept friends as guarantors.
If someone outside of the immediate family is providing a guarantee, it is essential that they seek independent legal advice. This ensures they fully understand the risks and obligations involved, and it may be a mandatory requirement by the lender.
The most common type of guarantee is a security guarantee, where the guarantor offers their property as additional security for the loan, often through a first or second mortgage. This can help the borrower avoid Lenders Mortgage Insurance (LMI) by reducing the loan-to-value ratio (LVR).
Income support guarantees, where a guarantor’s income supplements the borrower’s application, are less common today. Most lenders require the borrower to demonstrate that their own income is sufficient to service the loan, even with the added security from the guarantor.
Yes, some lenders allow the guarantor to keep their property with their current bank, even if it differs from the bank providing the borrower’s loan. In these cases, the new lender may place a second mortgage on the guarantor’s property, eliminating the need for the guarantor to switch banks or refinance their existing loans.
