A household’s combined income plays an important part in how much can be borrowed. However, their income is only a snapshot of the full financial picture that the lender needs to assess to determine how much can be borrowed. So the answer to the question is… it depends. It depends on how many dependents they have, how much they spend on leisure activities & takeaways etc, how big their deposit is, amongst many other factors all make a difference. It is crucial for households to speak to a lending specialist to get a better idea of their borrowing capacity so they can plan their next steps.

During a purchase, if the property valuer values the property lower than the purchase price, the borrower will need to meet the difference of the shortfall in addition to the deposit required. Property valuers are third-party organisations and borrowers cannot recommend another valuer. 

For a refinance, applicants can opt to contest the valuation and provide further documentation to the valuer to see if they would reconsider the valuation amount they have recorded.

No, you cannot. Importantly, all funds needed as a deposit, to finance the property, and its associated costs must come from the super fund, and cannot come from personal equity. Additionally, the property purchased must comply with the following rules.

The property must:

– meet the ‘sole purpose test’ of solely providing retirement benefits to fund members
– not be acquired from a related party of a member
– not be lived in by a fund member or any fund members’ related parties
– not be rented by a fund member or any fund members’ related parties

That being said, personal funds can be utilised as a contribution. However, financial advice would need to be considered in this situation to make sure you don’t go over the limit of personal contributions and your fund remains compliant.

Each lender has their own upfront costs, ongoing fees and exit fees. It could depend on the loan type and product so it is prudent to get in touch so there are no surprises.

A redraw facility can be very useful to borrowers who make extra mortgage repayments or receive occasional lump sums of money that they can put away towards their loan. These repayments ahead of schedule can help a household pay off their loan faster, and effectively reduce the interest paid over the duration of the loan. But what happens if the borrowers change their mind and suddenly need those funds? This is when a redraw facility comes into play as it lets them withdraw the money for use somewhere else. Without it, any extra repayments would be locked into the loan and become inaccessible in the future.

Similarly, an offset account is a powerful tool that helps borrowers pay off the loan quicker while simultaneously lessening the total interest owed. The main difference is that an offset account is a bank account attached to the loan and generally includes a debit card so it can be used as a transactional account. This means that salaries and cash inflows can automatically enter the offset account, and subsequently be used to pay off bills and other expenses. Borrowers should take note that the convenience of an offset account could incur additional fees and costs depending on the lender, but comes included with most WLTH lending solutions.

Lender’s Mortgage Insurance or LMI is used as an insurance policy that covers lenders in case of a default. If the borrower’s deposit is less than 20% of the property value for the home loan, the lender will most likely charge LMI. It is insurance for the lender and is an upfront cost charged to the borrower!

Variable interest rates regularly change, usually in line with RBA movements. Our most up to date interest rates can be found on www.wlth.com.

Alternatively, discover more information about owner occupied and investment residential property loans here. For more information about SMSF loans, please visit our landing page here.

Any advice provided is general in nature and should be considered in line with your financial situation, needs and objectives.