It’s easy to get carried away with the fun part of buying a property – looking at houses – but delaying the less compelling task of arranging finance will weaken your negotiating position on both the property and the loan.

Looking for a property to purchase is an exciting time. Choices regarding location, size, number of rooms and local amenities often see house hunters carried away in a deluge of daydreams and anticipation.

But, before you get carried away, it’s important to check off the essentials first. Although organising your finances may seem drab in comparison to perusing sales listings, gaining pre-approval with a lender will give you confidence about how much you can afford to borrow.

First and foremost, you need to determine if you’re eligible to borrow money from a lender, your ability to repay the loan will need to be assessed – you don’t what to find out after you’ve made an offer that your credit history or deposit is not up to scratch.

Arranging finance before finding the perfect property will put you in a good position when it comes time to make an offer. When you do find the house you have always wanted, you can present to the seller and estate agent as a prepared applicant who is serious and reliable.

It shows you mean business and gives them peace of mind that your financing will not fall through. Don’t be afraid to let the selling agent know you have conditional loan approval in place.

Sellers are most interested in completing their sale fuss-free and with steadfast funding, and showing that you are capable of both will help put you at the top of a potentially competitive list of applicants.

In the instance that you find and secure purchase of a home without having your loan pre-approved by a lender, there are a few pitfalls that you risk running into.

If you don’t have financing to pay for your property, you run the risk of forfeiting your initial 10 per cent non-refundable deposit you need to put down to secure the property. This may differ depending on what state you live in, but the point is it always pays to be organised and have pre-approval in place.

Saving home loan applications to the last minute also leaves less time to find the most suitable loan and have it approved ahead of settlement.

Arranging financing as an afterthought also adds immense pressure to the process of shopping around for the right loan and gathering the paperwork to prove you can service the loan, you don’t want to rush this process.

Contact us today to start your finance journey with Pulp Finance

🏡 Review how much you spend in a month and where your money is going, make a budget and try to stick to it
🏡 Set challenging but realistic goals, make cut backs on non-essential items for example dining out every week, take-away coffee
🏡 If you receive any work bonuses or other windfalls, pay them straight into your savings account to boost it!

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Credit Representative 508672 is authorised under Australian Credit Licence 389328

Refinancing also means you could pay off your mortgage in less time, by reducing the number of years.

Although there are high benefits to refinancing, there would be costs involved so we would need to work out if it would be worth it in your own circumstance.

If you’re trying to decide whether or not to refinance, contact Pulp Finance to help with running the numbers.

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Credit Representative 508672 is authorised under Australian Credit Licence 389328

Lenders work out your LVR to determine risk.

For example, if a property is valued at $500,000, and you pay a deposit of $100,000, you’ll need to borrow $400,000 for your mortgage, resulting in an LVR of 80%.
Generally, the lower the LVR, then the higher the loans security, which means lower risk and the loan is more likely to be approved.

If you are finding some financial terms regarding home loans a bit tricky to understand, have a chat to the specialists at Pulp Finance.

Contact Pulp Finance on 1300 506 998 or admin@pulpfinance.com.au

What is LVR?

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Credit Representative 508672 is authorised under Australian Credit Licence 389328

It all comes down to the risk of income certainty, and a few bad months may mean you can’t make your repayments.

Lenders ask for your previous tax returns and try to figure out how much the business may grow and whether your income will be stable for a long period of time. Techniques vary by lender.

If you are self-employed and would like to know more about suitable lenders for you, contact Pulp Finance on 1300 506 998 or admin@pulpfinance.com.au

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Credit Representative 508672 is authorised under Australian Credit Licence 389328

LMI is paid by the borrower, so that if you default (miss a payment due date), the insurance covers the lender (not you as the borrower), for any difference if the property is sold for less than the outstanding amount on the loan. After the property is sold, you’ll be required to pay the same amount to the mortgage insurer, despite the fact that the lender has been covered for their loss.

Borrowers can pay for Lenders Mortgage Insurance upfront, or it can be capitalised into your home loan.

Lenders Mortgage Insurance should not be mistaken for ‘Mortgage Protection Insurance’, which covers your mortgage repayments in the event of death, illness, unemployment or disability.

If you have any questions about obtaining a home loan, contact Pulp Finance on 1300 506 998 or admin@pulpfinance.com.au

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Credit Representative 508672 is authorised under Australian Credit Licence 389328

–Stamp duty – apart from your deposit, this is your largest cost up front. The more expensive your home, the more stamp duty you’ll pay. However, there are some exemptions for first-time buyers.
–Conveyancing and legal fees – these fees are for a licensed conveyancer to review your contract, perform checks on the title, and draft the settlement documents
–Pest and building inspections – this is your pre-purchase research, particularly for older homes
–Mortgage registration and transfer fees – This is a fee levied by the state governments to cover the cost of transferring the title
–Loan application or establishment fee – these are the fees your lender charges to set up your Home Loan
–Lenders Mortgage Insurance (LMI) – the smaller your deposit, the more insurance you pay. However, this insurance does allow buyers to buy with as little as 5% deposit
–Council and utility rates – connecting gas, electricity and telecommunications
–Building and contents insurance – compulsory if you have a Home Loan

It would be a good idea to do a thorough cost analysis before purchasing a home. Pulp Finance can help take the stress out of buying a house by not charging any fees in the loan process!

Contact Pulp Finance on 1300 506 998 or admin@pulpfinance.com.au

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Credit Representative 508672 is authorised under Australian Credit Licence 389328

How does a mortgage broker like Pulp Finance help you?
-evaluates your needs and assesses your options
-calculates your borrowing power
-gives expert advice, at hours to suit you
-does all the legwork which is complimentary and obligation free

From start to finish, Pulp Finance is here to help with your journey. Contact Pulp Finance on 1300 506 998 or admin@pulpfinance.com.au

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Credit Representative 508672 is authorised under Australian Credit Licence 389328

Terms and Conditions
One 1 will, will be drafted for settled loans within 10 days of settlement.
Legal Wills Online will provide estate documents at no additional fee to the client where the requirements are of a simple nature. In a small number of instances some people have more complex requirements that may need specific documentation. These complex requirements will be discussed between the applicant and our legal partner to determine if extra costs are likely.

Loan applications with all required supporting documentation to enable lodgement of the loan application to be received by 15 October 2018.
Your application for finance must be submitted to the recommended lender by 31 October 2018 and settled by 31 December 2018
Your loan amount must exceed $250,000 of new borrowed monies
Limit of one 1 will per loan transaction/application. Multiple applicants on the same application are considered as one.

Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.
Additional disclaimer: Subject to lender terms and conditions.
Licensing Statement: Credit Representative (508672) is authorised under Australian Credit Licence 389328.

Exit fee

Although loans taken out after 1 July 2011 are not subject to deferred establishment, or exit, fees, those taken out prior may still be. Also known as ‘early termination’ or ‘early discharge’ fees, they can sometimes be paid by your new lender but are normally applied to an early contract exit.

Establishment fee

Also known as ‘application’, ‘up-front’ or ‘set-up’ fees, these cover the lender’s cost of preparing the necessary documents for your new home loan. They are payable on most new loans, and the alternative to not paying this particular fee is being charged higher ongoing fees for the life of the loan.

Mortgage discharge fee

Covering your early legal release from all mortgage obligations, this fee is not to be confused with an exit fee. Also known as a ‘settlement’ or ‘termination’ fee, its purpose is to compensate your lender for the revenue it may lose due to the contract break.

Lender’s mortgage insurance (LMI)

The non-transferrable premium means that if you hold less than 20 per cent equity at the time of your refinance, you may have to pay LMI even if you paid it on the original loan. Extra care is also needed here because, whether or not you hold 20 per cent of the original valuation of the property, you may not if the property’s value has decreased and; while LMI may not have been a consideration at all in the original loan, it may be payable on the refinance.

Stamp duty

If your purpose for making the switch is to increase your loan amount, for example to fund renovations, then stamp duty will apply only to the difference between the original loan amount and the refinanced loan amount. Different rules apply in different states, so it’s worth speaking to your broker to see if this charge applies.

Other government charges

Fees are applied for the registration and deregistration of a mortgage so that all claims on a property can be checked by any future buyers. Varying from state to state, these can potentially add up to $1000 or more.

Break fee

If you were on a fixed rate loan, your lender is likely to charge you a fee for ‘breaking’ out of the loan term. This fee varies depending on the amount owed, the interest rate you were locked into, the current interest rate and the duration of your loan.

We can help

Indeed some of these fees can be negotiated, the total cost can be substantial if any of the fees apply to your situation. Unsure or have more questions then contact us today as we will happily answer your questions and provide an obligation free appointment.

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