Frequently Asked Questions

We are committed to seeking the best possible outcomes, delivering thorough an holistic reporting that is easy for every client to understand.

What is an offset facility?

An Offset facility works by using up to 100% of the balance of a linked transaction account to ‘offset’ or effectively reduce the portion of your home loan that is accruing interest. An offset account can act as a savings account, instead of earning interest on a savings account, you are saving interest on your home loan repayments. Money deposited into an offset account is not a repayment of the loan balance, the money deposited into the offset account is treated as a reduction of the loan amount outstanding for interest calculation purposes.

What is an redraw facility?

A redraw facility lets you access extra repayments you have made on your home loan. These additional payments can be taken out (redrawn) from the home loan when required and used as you see fit. You will only be charged interest on the outstanding balance of the loan and as such this will reduce your interest charges on your loan. Each lender has different ways and rules on redrawing amounts and the frequency you can withdraw.

What is the difference between redraw and offset?

They are both similar concepts and both can save you interest on your home loan. An offset account works like an everyday transaction account, this allows you to withdraw money at an ATM and use a debit card. While a redraw facility allows you access to the funds that have been paid into the home loan (on top of standard contracted repayments).

What is the Loan to Value Ratio (LVR) and how is it calculated?

The loan to value ratio is used by the bank to determine the amount they are willing to lend on a particular transaction. LVR is calculated by taking the loan amount required and dividing this by the property value. This will come up with a percentage up to 100%. Most lenders feel that 80% is a comfortable LVR and apply no lenders mortgage insurance when lending below 80%. Banks will often have maximum borrowing amount for certain transactions. As an example, some lenders will lend to a maximum of 95% LVR for Owner occupied properties and 90% for investment properties. This varies from lender to lender.

What is Lenders Mortgage Insurance (LMI) and how does it work?

LMI is an insurance policy which protects the bank in the event a borrower defaults on their mortgage. LMI is paid by the client and is applicable to loans when the loan to value ratio (LVR) is more than 80%. The cost of the LMI will be determined by the loan amount, the LVR and whether the property is an owner occupied or investment purchase. LMI allows clients to purchase sooner as they will not require as large of a deposit. The cost can be significant and varies from lender to lender. We would be happy to assist with calculations and options to help you decide what is best.

Are LMI exemptions available?

For most applicants, the maximum LVR before LMI needs to be paid is 80%. However, for certain professions, LMI may be waived for LVRs up to 90% and are assessed on an individual basis.

These professions include but are not limited to:

Medical Practitioners and Professionals:

Doctors, Registered nurses, Dentists, Optometrists, Veterinarians

Lawyers, Solicitors, and Barristers

Accountants/CFO in certain situations.

How do Guarantor loans work and why would you need them?

Savings for a home purchase can take many years and be very difficult to do. Having access to a guarantor will allow you to purchase sooner and will remove the need to pay LMI. If your parent or family member has equity in their home, they may allow you to use this equity to secure your loan. The guarantee provides the bank protection should you default on your loan and as such the bank will allow you to have less and even no savings when you purchase a new home.

Does my Credit Score affect my application?

Your Credit Score is a number based on your credit worthiness and all lenders will check this whenever they process a loan application for you.

Opening multiple Buy Now Pay Later accounts can significantly impact your credit score, and in turn they will affect any future Loan Application.

Unsecured Finance and Poor Credit Choices. Taking unsecure finance and not understanding the difference between good debt and bad debt can negatively affect a Credit Score.

The algorithms in credit reporting systems pick up on the types and amounts of finance, as well as the amount of online inquiries a person makes, which can harm the score if not properly managed.

Contact Info

Address: Labrador, Qld 4215

Mobile: +61 414 549 714

Email: [email protected]