Frequently Asked Questions

My Finance Consultants is a Mortgage Broking business based in Macarthur, NSW. We believe finance is personal. We take the time to listen, understand & tailor finance solutions for your individual circumstances. We are independent, meaning we have no commitments to any bank or lending institution, we can look for the best home loan from a range of lenders. Our goal is to provide you with the service you need and the advice you can trust to make your property dreams a reality. For most people, the purchase of a home is the single biggest financial commitment they will ever make, making it paramount that they have a trusted adviser in their corner every step of the way. My Finance Consultants is that trusted adviser. We will save you considerable time, effort and money by selecting a suitable home loan and ensuring it remains suitable into the future.

By comparing hundreds of home loans from the top Australian lenders, we can quickly simplify your options. Our vast panel of lenders gives us access to a huge array of home loan products. With greater access to what’s on offer in the home loan market, we can do the shopping around for you. We love negotiating a better deal to find you the most suitable home loan. We work for you, not the lenders. And best of all, our service is at no cost to you. We get paid directly by the selected lender for arranging the home loan on your behalf. As time passes, we’ll contact you to make sure you’re always getting the best possible interest rate from your lender. We also communicate in terms you’ll understand and help with all the paperwork. We deal with the lenders, so you don’t have to! Our Mortgage Brokers are experienced and knowledgeable on a wide range of products and policies. We can assist you in obtaining finance for home loans and investment loans as well as commercial ventures and asset finance.

You can contact My Finance Consultants at any time. Whether you are at the start of the property purchasing process or only have a short time to settlement, we can help secure the best financial product for you. If you are reading this, it probably means you are thinking about getting a home loan soon. We are here to answer any questions you may have. Even if you think you might not be ready, a quick conversation with one of our Mortgage Brokers will help you get your finances on track. This may even mean giving you some tips for your budget and giving you a target for the deposit you will need. If you would like a review of your current situation, reach out to our friendly team so that we can provide advice as to which product in the lending market would be best suited to you.

A Mortgage Broker acts as an intermediary between home loan lenders and the borrower. Not only will they provide you with the most competitive home loan interest rates based on your current circumstances, but they will also guide you through every step of the loan application process. Your Mortgage Broker will also follow up with the lenders and answer any questions or concerns you may have when settlement is completed. These days most Australians use a Mortgage Broker to assist them with their home loan or refinancing needs, as opposed to working directly with a bank. The biggest advantage of having a Mortgage Broker on your side is their ability to negotiate with over 40 different lenders behind the scenes, to get you the best deal for your individual circumstances.

At My Finance Consultants, we work for you, not the banks. Your Mortgage Broker will simplify all the paperwork and help you understand the processes required, like finding and working with the right conveyancer. With so much to think about when buying, refinancing, or investing - keeping it simple really matters. It is important to keep in mind that your Mortgage Broker will be working on your behalf and in your best interests to provide lending solutions that offer competitive products and interest rates best suited to your individual circumstances and requirements. Mortgage Brokers are also licensed and regulated professionals.

Mortgage Brokers are paid commissions by lenders for introducing new home loan applications and for doing much of the work that would have otherwise been done by one of their staff members. This outsourced approach is very efficient and benefits both the borrower as they have much more choice, and the bank as they do not have to pay any commission until the loan has been submitted and settled. Most lenders pay an upfront commission of 0.65% and a trail commission on the balance of 0.15%, GST excluded. These commissions are not paid by you, it is paid by the chosen lender. In the interest of transparency and compliance, we need to disclose the commission we are paid to clients. While the rate of commission may vary from lender to lender, our focus is on ensuring the product suits your individual needs.

Absolutely not. There is very little difference between the commissions paid by the various lenders. There is also legislation in the Mortgage Broking industry called the National Consumer Credit Protection Act, it is designed to protect consumers and ensure ethical and professional standards in the finance industry. Your Mortgage Broker will always disclose the commission that will be received from the chosen lender. At My Finance Consultants our focus is on helping you find a competitive loan for your individual needs and objectives.

With a home loan pre-approval, we work with you and the selected lender to secure a home loan based on your current position before you find your new property. We submit a home loan application based on your current borrowing capacity. This enables you to know exactly what you can borrow and start shopping in the price range you can afford. When you have a home loan pre-approval in place, it is less likely that problems will arise throughout the purchasing process. A home loan pre-approval can often be used to take a private treaty property off the market sooner, as real estate agents know you are a serious buyer. If you decide to make an offer you can act more quickly, as your home loan approval is only subject to you finding a suitable property. With a home loan pre-approval, you are also able to bid with confidence at an auction knowing you have finance for the purchase sorted.

Generally, deposit requirements are dependent on the property value and type of home loan. Once you have 5% savings, you’re well underway to achieving your goal. Having a bigger deposit means you may not have to borrow as much money, reducing the amount of interest you will ultimately pay over the life of the loan. A larger deposit means less risk to the lender and you are more likely to receive a competitive interest rate.

It is generally recommended that you have a deposit of at least 20% of the purchase price. However, as this may not be achievable for everyone, you can put down a smaller deposit. In most cases this means that lenders mortgage insurance will apply. First Home Buyers are able to put down as little as 5% deposit and may be eligible for various government grants, subsidies and schemes to further assist them.

The purpose you are purchasing for may also impact the level of deposit required. For example, you will generally need to save a larger deposit to purchase an investment property than for one you intend to live in.

There are very specific factors that need to be considered when determining how much a customer can borrow, such as income, employment position, the deposit saved, current living expenses and any liabilities. Our Borrowing Power Calculator can give you a rough idea of how much you may be able to borrow. For a more accurate assessment, contact your trusted Mortgage Broker so that they can go into your options and discuss your specific circumstances in more detail.

When you buy a property, there are upfront costs which you’ll need to consider. If you’re looking at buying an additional property and you have home equity, you may be able to use this towards your upfront costs. Let’s have a look at what you may need to account for.

Deposit: Lenders are asking for at least 5% of the property value as a deposit. Anything less than a 20% deposit will usually mean that you will incur Lenders Mortgage Insurance.

Stamp Duty: This is the most significant cost, and varies between state and territory governments. It is calculated based on your purchase price and it depends on whether you are buying an owner occupied property or an investment property. Try our Stamp Duty Calculator.

Legal Fees: You can expect to pay around $2,000, based on the amount of work involved for your conveyancer. These fees cover all the legal fees associated with your property purchase, including title searches.

Building & Pest Inspection: Your conveyancer will usually arrange these inspections on your behalf during your cooling off period. Your Contract for Sale should be subject to the building and pest inspections, so if there are any problems identified you have the option to withdraw from the purchase without any significant financial penalties. A building report will cost about $1,000 and the pest report about $500. You will pay for these as part of your total invoice at settlement to your conveyancer, in addition to their conveyancing fees.

Lender Costs: Most lenders charge legal fees to help cover the costs of their legal work and settlement charges. We will let you know upfront about any bank fees you need to be aware of.

Lenders Mortgage Insurance: If you borrow more than 80% of the purchase price of the property, you’ll also need to pay Lenders Mortgage Insurance.

Insurance: When you sign a Contract for Sale, we encourage you to take out building insurance as this is a lender requirement.

Disbursements: At settlement, you will need funds for the vendors’ prepaid bills such as council and water rates and strata if applicable. Your conveyancer will advise you of these costs prior to settlement.

Moving Costs: If you plan on using a removal business, don’t forget to factor in the cost.

If you need to calculate the costs associated with buying a property, try our Property Buying Cost Calculator.

If you have pre-approval in place and have found the property you want to buy you will then need to make an offer, sign the Contract for Sale and pay your deposit. Before you do this, you should engage a licensed conveyancer or solicitor to assist you with contract negotiations and navigating the buying process. Your conveyancer will inform you about the timeframes you need to adhere to, however generally speaking settlement will take place 4 to 6 weeks from when you exchange contracts. You will need to provide your Mortgage Broker with the fully signed Contract for Sale and the deposit receipt so they can then convert your home loan pre-approval into a full approval. Your Mortgage Broker will arrange for the lender to complete a valuation and once this is accepted and all other conditions have been met, your lender will issue you with an unconditional approval. The loan offer or contract will then be issued. Your Mortgage Broker will be on hand to assist you in the sign-up process.

Once your home loan documents have been returned, they will be verified by the lenders in-house settlement team or agent. After confirming the documentation is in order, they will liaise directly with your conveyancer to book the settlement. The settlement date is included in your Contract for Sale and typically will be 4 to 6 weeks after you exchange contracts. In the weeks leading up to settlement your solicitor will calculate the final figures that you need to pay at settlement. The amount you will need to contribute from your own funds will need to be available in time to meet the settlement deadline. You don’t need to attend settlement, your conveyancer will look after this aspect for you. The lender will provide the loan funds needed to settle the purchase. At this point you become the official owner of the property and can collect your keys from the real estate agent!

Lenders Mortgage Insurance (LMI) is a one-off, non-refundable, non-transferrable premium that’s generally added to your home loan balance. It applies when a borrower has insufficient savings or equity to meet the standard 20% equity requirement of the property value. LMI is insurance designed to protect the lender, not the borrower. It provides the lender with indemnity against any loss incurred if you are unable to repay your home loan and the property needs to be sold. The higher the Loan to Value Ratio (LVR) the higher the premium will be as the risk of loss to the lender is deemed to be greater.

Many home loan lenders allow parents or someone who is close to the borrower to use the equity in their own property as security. This is achieved by using a security guarantee. In most cases a parent, provides additional security for your home loan in the form of a mortgage over either their home or an investment property that they own.

The guarantor provides part of their property equity to top up your cash deposit to reduce the loan to value ratio to 80%, at which point LMI is no longer applicable. The exact requirements for this feature vary with different lenders but it is essential that the guarantor obtains independent legal advice so they are fully aware of any risks or obligations that will apply to them.

Real life happens and sometimes unexpected financial hurdles come our way. From a change in circumstances through to financial hardship, it can sometimes be tough to get your finances back on track. In the event that you have a history of bad credit, we have lenders that would be happy to look at your application on a case by case basis. These lenders are more interested in your present financial circumstances and ability to pay back the loan, rather than defaults or negative listings from the past. However, please keep in mind that this type of lender will often come with higher fees and interest rates.

This option is certainly available, however accessing the equity in your home to pay off other debts should be carefully considered. If you feel like you’re drowning in debt and can’t seem to get a handle on it, perhaps it’s time to consider simplifying your finances by consolidating your loans. Consolidating debt is a very common reason why many people refinance their home loan. The advantage is that you pay a much lower interest rate on a mortgage than for most other forms of debt. If you have sufficient equity in your property, you may be able to consolidate all your debt into a home loan. If you take this option though, it is important to make sure you maintain your repayments at their current level or you could end up paying more over a longer period of time. The team at My Finance Consultants are here to help you navigate through the process of consolidating your finances.

A conveyancer is licensed to act in the field of property contract law. A conveyancer may also be a solicitor, but this is not always the case. At My Finance Consultants we always recommend the use of a conveyancer or solicitor when buying or selling a property as they will act on your behalf and protect your interests in the transaction.

The cooling off period provides time for a buyer to complete their due diligence on a property, including checks and inspections, but this also means you have secured the purchase of the property. The purchaser, not the vendor, has the option of pulling out of the transaction before the end of this period. The cooling off period commences from the date of the exchange and should you choose not to proceed the cost to you is 0.25% of the purchase price.

Typically, when you are buying a property in NSW you have a 5-day cooling off period after you exchange contracts when purchasing by private treaty. This period allows you time to consider your purchase, undertake any searches such as pest and building inspections and progress your finance arrangements. However, the cooling off period can be waived if the purchaser’s solicitor issues a section 66W certificate making the contract immediately binding. The decision to waive the cooling off period is generally requested by the vendor to ensure the unconditional nature of their sale. Your conveyancer can provide advice on when this might be appropriate.

A Deposit Bond acts as a substitute for the cash deposit between signing a contract and settlement of a property, these products are issued by insurance companies for a modest fee. At settlement, the purchaser is required to pay the full purchase price, including the deposit. Your trusted Mortgage Broker will be able to determine if a Deposit Bond will be required for your scenario, they can also advise the costs involved for your individual needs.

A purchase by private treaty or private sale, takes place when a property is listed for sale through a real estate agent with an asking price. Prospective buyers make offers via the real estate agent who presents them to the seller for consideration. Once a sale is agreed the contracts are exchanged, the deposit is paid and generally a cooling off period applies.

A property sale via a public auction is a competition in the open market. Prospective buyers need to carry out all due diligence and checks prior to the auction date. This includes agreement of any specific conditions relating to their intended offer. The seller will set an undisclosed minimum sale price, this is called the reserve. The highest bidder at the end of the auction becomes the successful buyer, provided this bid matches or exceeds the seller’s minimum reserve price. Contracts are exchanged that day and no cooling off period applies. Should the seller’s minimum price not be achieved, the highest bidder would be granted the opportunity to negotiate further and may end up agreeing to a sale privately.

An offset account is a savings account that is linked to your home loan. With an offset account, your home loan lender will work out how much interest to charge you by taking any money in this account off your home loan account balance and then they will calculate the interest charged on the reduced loan amount. For example, if you have $80,000 in your offset account and a home loan balance of $500,000 – this would result in an effective home loan balance of $420,000. You would only be charged interest on the balance of $420,000.

100% offset accounts are the most attractive and they work like any other savings account. You can use it as a normal everyday account to pay for things, withdraw cash or make deposits. You have access to all funds in an offset account. With an offset account, you’ll have the same repayments, but more of that amount will be going towards paying down the principal of the loan, and less going towards interest. Because you are paying less interest during your home loan, you’ll pay it off faster!

A redraw facility is a loan feature that lets you withdraw repayments that are in excess to your minimum required repayments that have been made during the course of your home loan. Redraw facilities are not all the same. Some home loan lenders can limit your ability to access the redraw, whilst others might charge you a withdrawal fee. Look for a redraw facility that provides you with maximum flexibility at minimum cost. If you’re intending to use the account for daily transactions, an offset account may be a more attractive option than a more restrictive redraw facility. In terms of interest savings, a redraw facility has much the same effect as a 100% offset account.

A loan split is where part of your home loan has a variable rate, and the other part has a fixed rate. You might consider a split loan if you want the security of regular payments on part of your home loan, but also want to take advantage of interest rate drops on the other part of your home loan. A common reason to split is also purpose based, for example a client might need part investment, part owner-occupied, therefore keeping the loan splits separate for tax purposes.

Home loan splits can be any combination. They can be all variable, all fixed or a combination of both. There are usually no restrictions on making additional repayments on the variable part of your home loan. However, fixing part of your home loan gives you less flexibility than a variable rate loan. If you need to refinance during the fixed period, there would be an early break fee you would need to pay to exit the home loan.

When you see an interest rate advertised, you will always notice two rates listed. The rate on the right hand side is called the comparison rate. This interest rate is calculated by taking into account the interest rate plus any fees and charges such as upfront and ongoing fees. It is a good indicator of how competitive the particular lending product is in the market place. It is important to keep in mind that the stamp duty or mortgage registration fees are excluded as these charges will be the same regardless of which lender or loan product the customer chooses. Fees and charges which cannot be calculated at the time that the comparison rate is determined are excluded. The fees and charges which may or may not be charged, because they depend on some future event, which may or may not occur are also excluded.

Variable rate means your interest rate can change as decided by your home loan lender. This means your repayments can change too. If interest rates go up, so do your repayments. If interest rates go down, so do your repayments. This is the most common type of home loan interest rate. With this rate type, you can also make extra repayments into your home loan which reduces the life of your loan.

Fixed rate means that your interest rate is locked in for a period – usually between 1 to 5 years. When interest rates change, this means that it won’t affect your repayment amount during that period of time, they stay the same. Sometimes people are worried about interest rates going up, so they choose a fixed rate so that they know their repayments won’t change. Often there is a large exit fee if you decide to close the loan before the fixed period ends, so if you don’t know what is going to happen in the short term this may not be the most suitable for you. Most lenders also restrict extra repayments into a fixed rate home loan to a maximum of $10,000 per year, it’s best to check this out too with the lender if you intend on making extra repayments.

Your Mortgage Broker will be able to recommend a product based on what is the most important to you.

Principal is how much money you have borrowed from the lender. Interest is the extra money you must pay back the lender for borrowing that money. When you take out a home loan you are obliged to pay back both the principal and the interest charged for the agreed time period. Principal and interest repayments pay both the principal and interest parts of your loan balance at the same time. This is the most common loan type for owner-occupied purchases. This type of loan is designed to be repaid in full over the life of the loan. The loan is usually repaid over an agreed period of time, commonly 25 or 30 years.

Interest only repayments will pay only the interest on the principal amount borrowed from the lender for an agreed period, usually up to 5 years. After the agreed period, you need to start repaying both the interest and the principal parts of your home loan balance, and you’ll have less time to do it in. This means the repayments after the interest-only period will be significantly higher. This is the most common loan type for investors as repayments are lower for the interest only period maximising their cash flow position.

The goal for most owner-occupier clients is to pay down their home loan as fast as possible, to reduce the amount of interest paid. This is achieved by utilising the benefits of an offset account and making fortnightly or additional repayments. Owner-occupier home loans are sought after by lenders, as such the lending environment can be extremely competitive and rewarding for suitable borrowers. An investment loan can be set to interest only, which allows investors to repay only the interest – this assists the investor with their cash flow and tax deductibility. Investment loans typically attract a higher interest rate and there are fees and features which will vary between owner-occupied and investment home loans.

If your expenses are higher than the rental income you expect to receive, your property is negatively geared. If your rent is higher than your expenses, this is positively geared. Positive or negative gearing is essentially the profit or loss you make on the property. Some clients choose negative gearing to take advantage of possible tax benefits, this is because the taxable income is reduced by the amount of the loss incurred. While other clients opt for positive gearing strategies for cash flow purposes. The strategy you choose is determined largely by the property selected, your loan structure and your financial goals. It is extremely important that your loan is correctly structured to take advantage of possible tax deductions. It’s worth discussing the tax implications of either positive or negative gearing with your trusted Accountant and Financial Adviser.

Investment properties have many benefits when building long-term wealth. If you take the time and select your investment properties well, property can deliver good returns for long-term investors. The property you buy should be aligned to your goals and plans, and finding the right property in the right area can be very difficult. We recommend talking to a buyers agent if you are unsure, and we can work with you and your buyers agent to ensure that you have the right structures in place to suit your needs.