There’s a lot to know about loans, especially if you’re taking one out for the first time. So let’s tackle some of the common questions…
How much can I borrow?
Unfortunately, the answer to this one is ‘depends’! It differs from lender to lender and can vary quite a bit (depending on their criteria, income, the type of property etc.), so it’s really worth shopping around. How much you can borrow also depends on the size of your deposit and can change if you have existing equity in a property.
How much of a deposit do I need?
Again – depends! It depends on how much you want to borrow. If you’ve got a fair chunk of the deposit already saved, your finance broker can negotiate a lower interest rate for you. Generally, most banks want 3%-5% ‘genuine savings’ – that’s regular savings in your bank account for at least three months.
What’s the length of a mortgage?
How long is a piece of string? The most common length is 30 years, however the shorter your loan period, the higher the loan repayments.
How is interest calculated?
Your bank will take the outstanding loan amount at the end of each business day and multiply it by the interest rate that applies to your loan, then divide that amount by 365 days (or 366 in a leap year). It will then charge the interest to you monthly.
Why do I need a conveyancer or solicitor?
Their job is pretty important and includes:
- Checking the contract and the certificate of title to make sure your name is against the right property.
- Preparing the paperwork for the property transfer.
- Liaising with your lender and the seller’s conveyancer to oversee the rest of your payment for the property.
- Checking the seller has paid all rates and taxes.
- Lodging the documents to ensure the property is officially changed from the seller to your name – the buyer.
I’m always on hand to answer any questions you may have about loans or anything else around the loan process – personal, home, investment, equipment and business. Feel free to get in contact anytime via phone 07 3899 2866 or email.
And, on the GFG ‘homefront’, some exciting news…we’re moving! From Friday 4th May the team will move into brand new office premises at Unit 2, 63 Oxford St, Bulimba. It’s just a hop, skip and jump from the current office but allows us a great new space to expand into as our team of finance specialists grows! (Not a bad destination for great coffee also!)