Why choose Australian Mortgage Corporation?
Australian Mortgage Corporation is a nationwide finance brokerage committed to helping customers grow and protect their wealth. We work for you, not the banks. We are a unique brokerage in Australia because we help you with your property strategy and we are with you every step of the way. You are the customer and the very reason that we are in business. We want to be able to help you in any way that we can.
What service do you provide?
You will be guided at each step with a close-contact service. We deal with the financial institutions on your behalf, so you don’t have to queue up and deal with the banks’ call centres and branches. We do not have sales targets, so the advice we give is guaranteed to be in your best interest.
We work with you throughout the structured advisory process to help you reach your wealth goals.
Our commitment is to make sure you get the right product for your circumstances and we will manage the process from start to finish.
What experience do you have?
We have many years of banking experience and so understand the complexity that customers face when dealing with financial institutions. After taking the time to really understand you and your family, we can offer strategic advice that best suits you. We do not favour any bank, lender or insurance company so that we can guarantee independence and ensure that you get the best deal possible.
How do you take care of customers?
Our customers receive a deeper and broader service than lone financial planners, brokers or banks give. You, the customer, are the single most important asset this company has. We are interested in a long-term relationship with you, so we can celebrate achieving your goals.
How do you choose the right finance for me?
Australian Mortgage Corporation has access to over 40 banks and hundreds of different products. We look at every option and outline who will provide the best product in terms of borrowing capacity, rates and structure.
How are brokers paid?
We are paid a commission by the lenders, so our service is free to you. However, we can charge a fee for particular complicated cases, such as some SMSF loans, where additional work is required, it justifies an additional fee. You will always be told about this upfront.
Do you provide on-going customer care?
Yes, at your discretion, we will meet up with you every six months to assess and advise you on your financial progress. You can make any adjustments necessary to maintain your progress towards your goals. This is a complimentary service to all clients of Australian Mortgage Corporation.
What’s the most I can borrow for a home?
The actual amount will depend on your income and your ability to repay. However, most lenders have a limit of how much they will lend. The standard limit is 90% LVR. There are still lenders that will lend 95% LVR for a first home, and also allow the borrower add the LMI fee into the loan, in some cases up to a 99.99% LVR.
How do I check my credit file?
Your broker should be able to help you get this. There may be a small fee associated with it, usually no more than $12.
How long does the loan approval take?
Once we receive all the requested documents, the loan approval process can take between 1 to 4 weeks, depending on the complexity of the case.
How do banks know if I can afford whatever interest rates are like in the future?
Whatever rate you are given by a bank, it will always stress-tests your loan at a higher interest rate, to ensure you can make repayments. Given current rates, this would be a fairly wide margin that assumes that, even if rates nearly doubled, you could still afford the loan.
What is LMI?
LMI stands for Lenders Mortgage Insurance. Typically any loan in excess of 80% Loan to Value (LVR) will attract a risk fee to cover the bank’s higher risk of default given the higher loan amount. The insurance against this risk of default is called Lenders Mortgage Insurance (LMI). This is a once off, non-refundable fee charged at the beginning of a loan. Some lenders allow the Premium (cost) be added on top of the loan (capitalised) and repaid over the loan term (e.g. 30 years).
Is LMI simply dead money?
LMI (Lenders Mortgage Insurance) isn’t necessarily dead money. Savvy investors often use it, instead of parting with their cash, as it can attract tax relief at the higher rate. This helps freeing up cash and allowing for other investments or property renovation that adds value and equity to the property.
What do I do if I fall behind on my mortgage repayments?
Do not hide or ignore it. The best thing you can do is talk to us or with your lender and negotiate a repayment schedule or interest only payments.
How can I pay my house off faster?
There are many ways to help reduce your mortgage and pay off your house faster. Reviewing or negotiating your mortgage, making fortnightly repayments, ensuring you use a mortgage offset account and invest in a second property are only a few. Talk to us to discuss what is the best way for you.
What’s the difference between redraw and offset?
In terms of monthly repayments there is very little difference. However, this is not to say they are the same.
Redraw is when you have paid extra repayments off your home loan, for example, paying off your mortgage too fast. You can access these additional repayments at any stage. Be aware some banks have a minimal redraw amount and levy a charge per transaction. In addition, Redraw is usually contingent on two things:
(a) Bank has liquidity to allow you to redraw on your limit,
(b) The property securing the mortgage is hasn’t fallen in value.
Offset is an account linked to your loan, where the cash balance is subtracted from your loan amount and you are charged interest on the net balance. With Offset the money is always yours.
Why do investment loans cost more (higher interest) than owner occupied loans?
Until about 2 years ago, many banks did not differentiate in rates between investment loans and owner occupier loans. However, the fact is that investors are much more willing to take on risk secured by their investment properties, compared to owner occupier investors using their own homes as security.
Lenders were not pricing for this extra risk and their own risk of loan default wasn’t being adequately reflected. Since then, the Australian Prudential Regulation Authority (APRA) have mandated that lenders now charge more for investment loans, as well as interest only loans, given the greater risk associated with them from a lender’s point of view.
However, there are still good offers available. We will be happy to discuss these various options with you and see if we can get you a better deal.
Why do lenders only accept 80% of my rental income?
Income on rental properties demonstrates a wide range of variance. Depending on where it is located, there are varying levels of vacancy. For example, when a tenant moves out and a new one move in, this will usual result in at least 1 week of vacancy and no rental income. If even minor works are required on an apartment or house, it most often needs to be vacated for this to happen. This means no rent is being received, but the mortgage still needs be paid. A general rule is that banks take only 80% of rental income.
Can I borrow through my Super?
Owning and investing in property through Super via a Self-Managed Super Fund has become more and more popular over the recent years. It is still possible to borrow up to 80% Loan to Value through an SMSF-Super structure. However, due to risk-aversion, most lenders have either left the SMSF lending market or have reduced their risk tolerance to 60%-70% LVR.
Why do business and commercial loans differ so much from residential loans?
Most residential lending has been largely automated and lenders apply a set of rules and policies. Cases that don’t conform to these polices are normally rejected, unless there is good reason not to.
With commercial and business loans, the simplest answer is that every business is different. There is no set formula for success. Consequently, a bank will need to assess every application manually. Given the growth in residential loans over the last 20 years, most of the commercial lending is done almost exclusively by the Big 4 banks. With the proliferation of other lenders in the market, the differences nowadays in commercial lending are far greater among lenders than in residential. As more and more business owners are discovering, this is an area where you need a broker more than ever.
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