Lending Services
Lending Requirements in Australia
It’s our full-time job to know who’s who in the zoo and make sure we place you with the right funder that suits your needs.
There is no such thing as ‘one size fits all’ when it comes to the best loan to suit your individual requirements. Each bank has their different niche and things they do well and things they don’t.
How do WE get paid?
Our service to you is completely FREE. How do we do it? We are paid by the banks and lenders after your loan is settled. Our commissions are disclosed upfront before we even send your loan off to be assessed.
Good to know
First Home Buyers
If you are a first home buyer, the banks want to see that you have 5% in genuine savings – This means they want to see your bank account savings increasing over a 3-month period. The maximum you can borrow is 95%. You must keep your savings in your own name.
LMI
If you see the letters LMI – this means Lenders Mortgage Insurance. This is a fee payable BY YOU to the lender if you borrow over 80% of the value of your property. It is a percentage calculated on the loan amount and the only way to avoid this costly fee is by keeping your loan no higher than 80%. LMI can range from approx. 1% – 4% of the loan amount…OUCH! This fee is a little bitter sweet….. hurts the back pocket but allows you to get into the property market with less saving!
LVR
Bank jargon for Loan to Value Ratio. It is the amount of your loan compared to the value of your property. LVR is calculated by dividing the amount of the loan by the value of the property. For example, if the property is worth $250,000 and you have a deposit of $50,000, the LVR will be 80%.
Different Loan Types
The cheapest loans on the market are for owner occupiers paying principal and interest. Banks and lenders are penalising you if you borrow for investment. The interest rates are higher and if you choose to pay interest only, they will increase your rate even further. Our team will help negotiate with the different lenders to get you a better rate no matter what the purpose is. It’s all part of our service commitment to you!
Non Residents
If you are a non-resident wanting to buy a property in Australia, then we need to give you an extra helping hand! In years gone by, the lending options with the banks were a plethora! Now…… it’s a different story! There are no banks in Australia offering loans to non-residents, however there are a few private lenders offering 25 – 30 year mortgages. They are costly and we need to carefully explain the various options, terms and conditions to make sure they fit your budget and needs. It’s better to speak to us first before you buy anything!
Australian Expats
Much like non-residents, it’s a tough gig getting a loan if you are an Australian living and working overseas. You may have fewer options to choose from, but it’s still doable – contact us if this is you.
Commercial Lending
Generally speaking, commercial loans require a higher deposit and most banks lend comfortably between 60 – 70%. There are some exceptions where a lender may go to 80% but everything is dependent upon the actual property. The loan terms are also different to a standard home loan. They are often only a15-year loan term, have a higher interest rate and attract much higher fees.
Self Managed Super Fund Loans (SMSF)
Buying property in your SMSF has become a really popular way to invest your superannuation. This is a highly regulated loan and only a few lenders are in this space offering competitive loans. You cannot live in the property. It must be for investment purposes and construction and vacant land are not allowed. You can still borrow up to 80% with some lenders but this is heavily reliant on the property type you are purchasing. Borrowing in your SMSF is really a specialist area of lending and one that Property Before Prada does very well! Not only have we helped hundreds of customers invest, but we have also done this for ourselves personally. Always allow extra processing time as the bank is very particular about the information they want to see. We always recommend a 6 week minimum processing time.
