Answers to the most common questions about home loans
How much can I borrow?
The amount of money you can borrow, commonly known as your “Borrowing Capacity”, differs from lender to lender. Some lenders will lend you more than others. However, you can use our calculator to get a rough estimate of your Borrowing Capacity:
For a more detailed estimate that takes your specific situation into account, contact us.
How much do I need for a deposit?
The deposit required depends on the type of home loan and the lender you select. As a general rule, if you’re an owner occupier you will need at least 5% of the purchase price as a deposit. If you’re an investor, you will need a deposit equal to anything from 5% to 20% of the purchase price. Contact us for a more accurate assessment.
Am I eligible for the first home owners grant (FHOG)?
As a rule, you are eligible for the First Home Owner Grant if all of the following are true:
- You’re an Australian citizen or permanent resident.
- You’re buying or building your first home in Australia.
- You intend to occupy the property as your principle place of residence within 12 months of settlement.
If you’re purchasing the property in conjunction with others, they must also meet the same criteria for the FHOG to be payable.
How much Stamp Duty do I have to pay?
Stamp Duty is a State Government tax based on the selling price of the property. Each State and Territory has different rules and calculations. Some even offer discounts to first home buyers. Stamp Duty can be a significant added cost when purchasing property.
What other fees and charges can I expect?
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
- Insurances
- Connection Fees – phone/gas/electricity
- Removalist Fees
- Rates
What is Lenders Mortgage Insurance (LMI)?
You might assume that Lenders Mortgage Insurance (LMI) is there to protect you if you’re unable to make mortgage repayments. But this is not the case. 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, while others require you to pay it up-front.
What happens when I complete an enquiry form?
Once you’ve completed our online enquiry form, one of our expert Mortgage Consultants will be in contact to answer any immediate questions, and to arrange a convenient time for your free home loan consultation.
Your Mortgage Consultant will discuss your home loan options. If required, they’ll even fill out the official home loan enquiry form and submit it to the lender on your behalf. These consultations are absolutely obligation-free. Leave the hard work to us and get it done right the first time.
What documentation will I need to apply for a home loan?
As well as submitting your official home loan application, you may need to provide supporting documentation to confirm your identity and substantiate your income. Documents can include:
- Drivers License
- Birth Certificate
- Recent payslips
- Tax returns
- Bank statements
- Rates notices (if you own existing property)
What is Settlement?
Settlement is the completion of the sale, when the borrower takes possession of the property and the mortgage takes effect.
When does settlement take place?
Settlement usually takes place 4 weeks from the date the home loan is formally approved.
How often can I make payments on my mortgage?
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.
Use our calculators to estimate repayment amounts:
Which banks and lenders does Lifestyle Loans represent?
We have access to more than 300 home loans provided by around 30 well-known banks, lenders and wholesale funders.
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