|Salary and wages||
|Investment income (interest, dividends)||
|Social Security benefits/Government Pension||
|Fully maintained company car||
|Child Support/child maintenance||
Most lenders these days offer flexible regular repayment plans. You can choose to pay weekly, fortnightly, twice monthly or monthly. The repayment can therefore be matched to your pay cycle.
Settlement is the completion of the sale, when the borrower takes possession of the property and the mortgage takes effect. Settlement usually takes place 4 weeks from the date the home loan is formally approved.
In conjunction with the submission of your official home loan application you may need to provide supporting documentation that confirms your identity and substantiates your income. Documents can include:
- Drivers License
- Birth Certificate / Passport
- Recent payslips
- Tax returns
- Bank statements
- Rates notices (if you own existing property)
Our Accredited Mortgage Consultants will be better able to provide an accurate overview of what is required for your individual situation.
Contrary to what many borrowers may think, Lenders Mortgage Insurance (LMI) does not protect the borrower should they be unable to make mortgage repayments. Instead, LMI protects the lender from any losses resulting in the sale of a property due to default by the borrower. LMI premiums are payable by the borrower when the amount borrowed is above a certain percentage, usually 80% of the lender’s valuation of the property. Some lenders will allow you to add the LMI premium (capitalisation) to your home loan whilst others require you to pay it up-front.
As a rough guide it is recommended that you budget 5 – 7% of the purchase price, on top of your deposit, to cover fees and charges. These fees and charges may include, but are not limited to:
- Building/Pest Inspection
- Valuation Fees
- Lenders Mortgage Insurance(LMI)
- Solicitor Fees
- Connection Fees – phone/gas/electricity
- Removalist Fees
LVR stands for Loan to Value Ratio. It is the ratio of the Loan Amount to the Purchase price or Valuation Price. For example, if your new property has been valued at $100,000 and you are borrowing $75,000 then the LVR is 75,000/100,000 which is 75%.
Lenders like to see a borrowers’ history of savings – normally the minimum is 3% for first home buyers or 5% for others of property value and they like to see this saved over a minimum of 3 months.
Funds to be held in the borrowers name and include:
- Funds held or accumulated in savings accounts for 3 months or more
- Term deposits held for 3 months or more
- Shares held for no less than the last 3 months
Exclusions from genuine savings:
- Advances on wages/commission from an employer
- Financing of a deposit
- Builder discount/finance
- Vendor discount/finance
- Proceeds from sale of motor vehicles
- Windfall gains
- One-off government payments (e.g. baby bonus, stimulus package payments)
If genuine savings cannot be demonstrated as per the above, the LVR must be less than 90% + lenders mortgage insurance.
Because different lenders have different criteria for borrowing capacity there is no standard formula. By filling out our inquiry form and submitting it we can manually work with you to find the lender that meets your loan requirements. We will consider income from a variety of sources including Salary, Self Employed Earnings, Dividends, Rental Income and any other source of regular and recurring income.