Consumer Guide 2 27-10
Consumer Guides

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Buying property can be a rather daunting experience for some, especially if it’s your first home. At QuickSelect we understand that choosing the right home loan is often one of the biggest financial decisions you will make. We make sure that we see you through every step of the way, providing tailored solutions to suit your requirements. From the very first stages of realising your goals, to getting the best deal on the home loan best suited to you, we ensure the experience is rewarding and worry free. We take care of all your paperwork so you have more time to spend on what’s most important… your home. And our expert assistance doesn’t stop there – we will see that you receive our guidance throughout your entire journey, helping you to manage your home loan both now and in the future.

1. Planning, researching and budgeting

Turns out homework didn’t stop when you left school! Buying your first home is a big step - it is a major decision which requires a huge amount of plan-ning, research and budgeting. Our goal at QuickSelect is to see you through the process step by step. We make sure that you understand what is happening at every step of the way and that means your experience will be as interesting and worry free as possibleimage-002

  • Planning

It’s important that you only borrow what you can afford, so consider your current and future financial situation and commitments. Are you likely to get married in the next few years? Are you planning a family? Have you any plans to travel overseas? Are you and your partner in stable jobs? Remember, there are additional costs on top of the pur-chase price that you will need to consider in the grand scheme of things (but we’ll discuss those later).

You can obtain a pre-approval for your home loan to provide you with an idea of what sort of properties you can afford. Pre-approval is usually valid for 3 months, and can be renewed if your search takes longer.

  • Researching

When you are looking for your first home, remember it may not be the family home you’ve always dreamed of – it’s about getting onto the property ladder and becoming a step closer to it. It’s easy to rush into buying a house, but take
your time to choose a property that will help you achieve your long-term goals. Get a feel for the types of suburbs you’d like to live in and the properties on the market. Be smart about your choice – choose a suburb with good growth potential.

  • Budgeting

Before applying for a home loan you should work out a realistic budget. You will need to determine the difference between what your income and your expenditures. Try to separate your needs and wants. The key is to be disciplined, but also allow yourself enough money to live a life you enjoy. Once you have worked out your budget, you will have a much clearer picture of how much you can afford to spend on mortgage repayments each month, and consequently, the type of home you can affordimage-003

Am I ready to buy?

In preparing to buy your first home, saving for a deposit is the best preparation you can do. Most lenders prefer you to have at least 5% of the property value to put down as a deposit. However, when it comes to deposits, the bigger the better – the more money you can put down upfront, the less you will need to borrow. When saving for a deposit, it is helpful to consider your loan to value ratio (LVR). The LVR is the proportion of money you need to borrow compared to the value, or purchase price, of the propertyloan

Therefore, the larger your deposit, the less you need to borrow, and the lower your LVR. Having a larger deposit will help you to avoid paying a Lenders Mortgage Insurance (LMI) premium, as well as build the equity in your property sooner. Generally, if you are borrowing over 80% of the property’s value (i.e. your LVR is above 80%) you will need to pay LMI, and the higher your LVR the more LMI you will need to pay.

The table below shows an example of how the amount of LMI you need to pay is affected by your LVR. Please note these are estimates only, and the amount of LMI will vary between lenders and states

table2What is Lenders mortgage insurance?

Lenders Mortgage Insurance (LMI) is insurance that the lender takes to protect itself against a borrower defaulting with a small deposit. Generally if you need to borrow anywhere between 80% and 95% of the purchase price of your property most lenders will require you to pay LMI. This means if you are purchasing a property and are placing less than a 20% deposit down, you will mostly likely need to pay LMI. LMI protects the lender against the small risk that you are unable to meet the repayments when you wish to start purchasing your property
with a smaller deposit.

What is Capitalised LMI?

LMI premiums are payable in two ways: upfront or capitalisation. Capitalising your premium essentially means adding it to your total loan amount and paying it off in regular instalments over the term of your home loan. Capitalisation is the most common way of paying LMI. Most borrowers choose a monthly option. As per the above table LMI varies depending on the loan and deposit amount.

Can my family help me out?

If you are lucky enough to have family that are willing to help you step onto the
property ladder, speak to them about ways they help you to lower your LVR in
order to avoid paying LMI by:

  • Giving you a cash gift

A family member might be able to help you out by adding to your savings account to help you reach the deposit you need

  • Being your guarantor

A family member can act as a guarantor by using the equity in their home as
security on your home loan. Click here to find out more about Family Guarantee.

What is the First Home Owners Grant Scheme?

There are many incentives out there providing concessions and rebates to help first time buyers onto the property ladder. Every state has a stamp duty concession in place for first-time buyers. The First Home Owners Grant (FHOG) is a
scheme funded by the government providing a payment to eligible first home buyers. The eligibility criterion for the FHOG depends on the state in which you live. You can use our online calculator to see whether you are eligible.

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What additional costs are there?

Remember, there are also fees associated with buying properties such as stamp duty, conveyancing and moving costs.image-004

  • What is stamp duty?

Stamp Duty is one of the biggest upfront costs involved in buying a property. This is an external cost levied by the government payable by the purchaser of the property.

  • How is stamp duty calculated and do I have to pay it?

It can be difficult when working out the amount of Stamp Duty you need to pay, as it is dependent on the value of the property you intend to buy – the higher the value of the property, the more duty to be paid. The amount payable is also dependent on the state in which you are buying property in. This is because Stamp Duty is revenue levied by the government and varies between states. Some people, including first time buyers are eligible for an exemption or a rebate when purchasing in certain states.

Find out how much stamp duty will cost you in each state. Where a * is shown, it indicates a FHO stamp duty concession/exemption. Meeting the eligibility requirements for your individual’s state FHO concession will entitle you to the stamp duty concessions/exemptions. You can use our Stamp Duty calculator to find out exactly how much stamp duty you will pay.

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  • Conveyancing

Conveyancing is the process when the ownership of a property changes, and consists of various steps including
property inspections, exchanging of contracts, searches and enquiries, and requisitions on title and settlement. It is highly recommended to hire a conveyancer or solicitor when making a big purchase – and what bigger purchase will you make in your life than your home? It is hugely beneficial to use the expert service of a solicitor or conveyancer to complete the change-of-ownership documentation involved in purchasing property to ensure that everything runs smoothly for you. Buying property can sometimes involve unexpected complex issues that you may not be equipped to deal with, which is where the help of a professional comes in. Conveyancers will protect your interests regarding the buying and selling of property.

  • Are there any other costs I need to account for?

Put some money aside to allow for costs associated with the loan itself. Some lenders charge an upfront cost upon establishment of the home loan. There are also government fees that should be considered. The government requires every home loan to be registered, so you will need to pay a mortgage registration fee which will vary depending on state. A transfer fee will also be charged by the government upon the transfer of ownership of the property It may sound silly now, but remember that you need to account for the cost of actually moving your belongings. Be sure to hunt around for the best deal, getting quotes from a few different removal companies. Also remember to set aside money for your first weekly food shop, any urgent maintenance that your new home may require, and any bills you may need to pay such as council tax.

You will also need to organise insurance for your new home – consider both insurance for both the home and contents. Your lender or mortgage broker will most likely require that you take out building insurance dated from the time of exchange, and contents insurance provides cover for all the fixtures and fittings included with the sale

2. What are the benefits of using a mortgage broker?image-006

Buying and funding property without a broker can be a complicated and time-consuming process. There is a whole minefield of problems, and too often you only find out when it’s too late. At QuickSelect we are obsessed with looking for and finding you the right home loan. And after we find it, we keep looking to make sure you’ve always got the best choice for your changing circumstances. We will see you through the entire journey, every step of the way, so that your experience is worry free. And because we process and manage the loan application on your behalf,image-007 you have more time to focus on what’s most important...your home. At QuickSelect we pride ourselves in three key characteristics that we think are the most important when finding the best solution for you:

  • Choice

The biggest advantage we offer as a broker is choice. Unlike the big banks who only have access to their own products, we have access to over 40 lenders, and 2500 products, some of which as a direct consumer you wouldn’t have access to. We provide lateral group thinking to give you solutions to your needs and potential problems, meaning we are much more likely to come back to you with ‘yes’ when single banks may be saying ‘no’. We know how to get deals done - we work the system from the inside out and know how to stretch it for the best outcome. This depth and breadth of investigation provides a uniquely unbiased approach as we unearth and negotiate the best 3 image-009lending choices for you from across the big four banks, second tier institutions and non-bank lenders. We take into account your individual needs, considering your financial background, current situation and future objectives and do the research for you. Then we recommend our preferred option and tell you why. We also tell you why not others, so that you can make an informed choice.

  • Convenience

We know that finding the right home loan can be a time-consuming process, which is why we make sure that
no matter where you live or where you work, we are always accessible. No call centres, no personal assistants, no press 3 for sales and service. Just one direct number that you can call 24 hours a day, 7 days a week. At QuickSelect we work to your timings and are always just a phone call away to answering your questions. No hard sales, no fees, and no sign on the dotted line. We value your time and understand the importance of not rushing into decisions. We provide you with information for you to review in your own time so that you can be sure you are making the right choice. Our assistance does not end upon settlement – we keep looking to make sure you always have the best choice. We see you through the entire home loan process, processing and managing the application from start to finish, making sure you are kept informed every step of the way.
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  • Confidence

We believe that our rigorous can-do attitude will give you the confidence that you are receiving the best options and solutions from us. By choosing QuickSelect you have assurance that you are receiving expert advice from brokers who have years of experience helping people with their home loans.

Unlike big banks, we specialise in home loans and are committed to our customers. A home loan is a long term proposition, and having a mortgage expert that can guide you both today and in the future is invaluable. We will have many conversations over the life of your loan as we look to understand your needs and help you clarify your position.
We always listen first, before asking questions to determine what is most relevant and important to you. We are genuinely passionate about working with you to get the best out of the system and fine tune when required, image-010to get the best outcome for you. Circumstances change and nothing is ever constant. At QuickSelect we see the opportunities not the obstacles -we use our knowledge to always get you a positive result. If there is a way it can be done then it will be found. We work with you every step of the way to ensure you have a comprehensive understanding. If hiccups arise from the lender,and they do, we ensure they are dealt with efficiently and effectively as quickly as possible.

Our expert brokers are experienced in all different types of home loans so you can be confident that you are getting what’s right and best suits your needs. We consider the structure and portability of the home loan over the long term
to ensure that your home is yours quicker, faster and cheaper. We are passionate and driven in our relentless commitment to one simple fact– to see you through your entire journey, from start to finish.
3. The Loan Process
How much can I borrow?

Before setting your heart on your dream house, find out how much you can borrow and set goals that you can achieve so that we can start helping you achieve them. It’s important that you only borrow what you can afford, so use our online calculators to plan your budget and review your savings. Consider your current and future financial situation and commitments. Are you planning a family? Have you any plans to travel overseas? Are you and your partner in stable jobs? Are you likely to get a pay rise soon? Are interest rates likely to increase? These are just a few of the questions you should be considering when planning to buy your first home.

By telling us a little bit about your current financial situation and commitments, we can calculate how much you can afford to borrow, your ‘borrowing capacity’. You can obtain a pre-approval for your home loan to provide you with an idea of what sort of properties you can afford. Pre-approval is are usually valid for 3 months, and can be renewed if your search takes longer.

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image-011What do I need and want in a home?

Now that you have your pre-approval you are able to begin your search for your new home. Take time to do your
research. Have a look online and view some properties to get an idea what is on the market so you can figure out
what you want from your first home. Consider a variety of property types and locations, in order to find the best home for you. Start by making a list of your needs, wants, and can-do-with outs. When viewing properties there is a lot to think about, so to make it easier, create and use a checklist and be sure to take a camera so you can find your dream
home quicker.

How can I begin my home loan application?

If you have a pre-approval and have found a property you like, it’s time to begin your home loan application. If you don’t have a pre-approval, in order to assess which home loans are right for you, we will use a budgeting tool to understand your household income and expenses. When you contact us, either online or by telephone, we will discuss your goals and needs in order to understand your current situation. From there, we can establish your eligibility for aimage-013 range of products and identify the best home loan solution to match your individual requirements. Our specialist team will provide you with a choice of loans tailored to you, to ensure that we see you into your new home happy and informed.

What types of loan are out there?
Which loan is right for me?

There are many different loans to consider: basic, fixed, variable, split, bridging and equity. Based on the information you provide us with, we aim to provide you with a choice of loans especially suited to your needs. Here’s a guide to your most common loan types:

  • Standard Variable Loans (SVL)

image-012Variable home loans are loans with an interest rate which is dependent on market interest rates. This means that the interest rate will vary, fluctuating as the market interest rate goes up and down according to changes in the official
cash rate. Most banks have a SVL which is used as a reference point to add discounts for various packages. If you are on a SVL you could be paying too much.
Variable interest rate loans can provide a great advantage if the official cash rate falls

  • Basic variable loans

Basic ‘no frills’ loans have a relatively low variable interest rate. These loans often attract first-time buyers due to their lower rates, and usually have less flexibility and features than standard variable loans. Basic variable loans often lack features such as offset facilities, redraw, extra repayments and ability to split the loan, so it is best to work out what it is you want from the loan.
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  • Fixed-rate loans

Fixed rate loans let you lock in a specific interest rate, and provide security and regularity, making budgeting easier. During the fixed rate period (usually 1-5 years), the interest rate on your home loan will stay the same, allowing your repayments to remain the same. At the end of the term you have the option to lock you loan back into another fixed term or change to a variable or split loan. Fixed rate loans are best suited to people who seek consistency, as it helps you to plan your budget as you will know exactly how much you need to pay each month. However, if the market rate goes down, your interest rate will still remain the same.

  • Split loans

Split loans give you the flexibility of both a fixed rate and variable loan. These loans allow you the best of both worlds – you can have the certainty of locking in portions of your loan with a fixed rate, whilst having the flexibility to make unlimited additional repayments at a variable rate. This allows you to benefit whether interest rates rise or fall. Split loans can also be used if you wish to consolidate all your debts into your home loan, by retaining the consolidated debt as a ‘split’ whereby the repayments are managed separately to your home loan but still have the same interest rate.
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  • Honeymoon loans

These loans can be especially appealing to first-time buyers due to the initial discounted interest rate. Honeymoon loans are great for providing a short term bonus - the lower interest rate usually only lasts for a limited time, before the loan reverts to a standard variable rate. The lower interest rate makes it a good way of getting a financial head start whilst getting used to paying a mortgage. However, it is important to consider the loan’s long-term structure and features. Be aware that lenders will usually impose exit fees for borrowers that wish to refinance once the honeymoon period is up.

  • Bridging/relocation loans

Bridging loans are suited to people already on the property market, looking to move. As the name suggests, a bridging or relocation loan helps to ‘bridge’ the gap between the selling of a current property and the buying of a new one. It can often be complicated when waiting for completion of the sale after the completion of a purchase for the new image-015property. The lender will usually take security over both properties until the sale is complete, providing the ‘bridging amount’ is lower than 80% of both properties.

  • Equity loans

Think of these loans as using the equity of your home as a credit card to fund other things such as investment or renovation. Home equity is the difference between the value of your home and the money you owe. These loans are usually only available if you have a larger deposit secured or good equity in your home and suit those who are looking to renovate their home or invest in a second property. These loans are best suited to those who have a disciplined approach to money, as if you default on your loan the lender will sell your home to pay out the loan. Remember that by using your equity, you are adding to your level of debt and therefore your home loan will take longer to pay off, or your repayments will increase. Structuring your home loan is critically important and can be either interest only or principal and interest. Generally, interest only is preferred as you only pay for the component of equity that has been used.
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  • Construction loans

If you are looking to build a property from scratch, a construction loan allows you to drawdown the loan amount as and when you need it. This means that you are not paying interest repayments on the entire amount from the beginning. Instead, you can drawdown loan amounts at parallel stages to the construction and therefore only paying interest on repayments on the portion you have used. Upon completion of the property construction, you have the option to choose which loan type you would like to convert to, i.e. variable, fixed or split.

  • Non –conforming loans

Non-conforming loans are suited to borrowers who are having difficulty finding a home loan with bigger banks and lenders. There are many reasons why you may not meet all of the strict lending criteria they provide, so these loans often suit individuals who are self-employed, new migrants or those who have a history of credit impairment.

Verification

Once you have decided on the best loan for you, we can begin to process your application, which in most cases will not take more than 24 hours.

We will carry out a verification process to ensure all the personal and financial information we have about you is complete and correct. To help us assess this we will ask you to provide various supporting documentation including:image-018

  • YOUR PAYSLIPS
  • YOUR EMPLOYMENT DETAILS
  • YOUR BANK STATEMENTS
  • DETAILS OF ANY OTHER DEBTS
  • PERSONAL IDENTIFICATION

We will run a credit check through a credit reporting body, and providing you pass all our checks, we’ll provide you with a conditional approval for your home loan.
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Valuation

Once the verification stage is complete, and you have found the property you wish to purchase, we will carry out
a property valuation. This is something that we do to ensure the property you’re purchasing is a suitable security
for the loan. This valuation differs from the valuations carried out by a real estate agent, quantity surveyor, or by an insurance firm and is generally more conservative.

Approval

If your loan is approved then you will receive an approval letter and loan contract which you will need to read carefully, sign and return to the lender. This is your formal approval. It is now time for you to make an offer on your new home, but be sure to do some market research beforehand to make sure you’re not paying more that its market value.

Settlement

You’re almost there, your new home is in sight! Settlement is the exchanging of documents between you and the previous owner of the property in order to finalise the purchase. If you have a solicitor/conveyancer they will handle settlement for you on the date arranged. On settlement day, the possession of the title is changed, and your lender will provide the funds to purchase the property. Once the exchange of contracts is complete, your solicitor will send you the settlement paperwork, your lender will draw down your loan, and you’re ready to go

Happy moving day!

Today is the day you probably felt would never come. Here’s to many happy years in your new home.

Managing your loan

Loan repayments will begin on the chosen repayment date after settlement, e.g. fortnightly/monthly. We work hard at QuickSelect to ensure we are with you for the entire journey, even after we’ve seen you to your home. Our years of experience has told us that people’s circumstances change constantly, so we make sure we are there for you every step of the way. We will help you to manage your loan by tailoring your repayment instalments to suit you and everything that life throws at you, whether that be reducing your regular payment, or making an extra payment.

We understand that it is important to consider your current and future situations when choosing your first home loan. Give us a call on 1300 874 871, and we can assess your financial needs and goals so that you can start achieving them. We will see you through every step of the home loan process to ensure that it is as convenient and worry free as possible, so that you get onto the property ladder sooner.



refinancing

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Whether you’re moving home, renovating, or simply looking for a different home loan, refinancing doesn’t need to be complicated. At QuickSelect we are interested in what is best for you so that you can make the most of your mortgage. We understand that having the best home loan to suit you is important, so we make sure that we only recommend refinancing if it you will benefit you. With so many different options to choose from, we can help you to find what you need from your refinance, from changing how long you want the loan for, to relocation finance. We make sure we see you through every step of the way, guiding you through the entire refinance process to make switching easy to ensure the process is convenient and worry free. We take care of all your paperwork so you have more time to spend on what’s important…your home.mastersoftwaret-002

Should I refinance?
At QuickSelect we understand that in this day and age, your financial circumstances are continuously changing. Home loan repayments are usually one of the largest household expenses, so we understand the importance of getting them right. We understand that your circumstances may have changed since you first got your home loan and may no longer ideally suit your current lifestyle. Perhaps you have started a new job and are receiving a higher salary, it’s possible that your credit history has improved, maybe you’ve decided to start a family or it could be that you just want a better deal on your home loan. It’s important to review your home loan on a regular basis, to make sure it is still helping you achieve your financial goals, and that its features and structure still suit you.

Some questions to consider:

  • Does your current home loan suit your current financial situation?
  • Are there things that frustrate you about the current loan structure?
  • Is your financial situation likely to change?
  • Are you thinking about renovating?
  • Are you happy with the services provided by your current home loan lender?
  • Has your credit history recently changed?
  • Are you benefitting from the features of your current home loan?

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How can a QuickSelect mortgage broker help me?

Optimising your loan on a property without a broker can be a complicated and time-consuming process. There is a whole minefield of problems, and too often you only find out when it’s too late. At QuickSelect we are obsessed with
looking for and finding you the right home loan. And after we find it, we keep looking to make sure you’ve always got the best choice for your changing circumstances. We will see you through the entire journey, every step of the way,
so that your experience is worry free. And because we process and manage the loan application on your behalf, you have more time to focus on what’s most important...your home. At QuickSelect we pride ourselves in three key characteristics that we think are the most important when finding the best solution for you:mastersoftwaret-003

Choice

The biggest advantage we offer as a broker is choice. Unlike the big banks who only have access to their own products, we have access to over 40 lenders, and 2,500 products, some of which as a direct consumer you won’t. All institutions have different policies and knowing the differences can make a big difference. We provide thinking to give you solutions to your needs and potential problems, meaning we are much more likely to come back to you with ‘yes’ when a single banks may be saying ‘no’.

We know how to get deals done - we work the system from the inside out and know how to stretch it for the best outcome. This depth and breadth of investigation provides a uniquely unbiased approach as we unearth and negotiate the best 3 lending choices for you from across the big four banks, second tier institutions and non-bank lenders. We take into account your individual needs, considering your financial background, current situation and future objectives and do the research for you. Then we recommend our preferred option and tell you why. We also tell you why not others, so that you can make an informed choice.

Convenience

We know that finding the right home loan can be a time-consuming process, which is why we make sure that no matter where you live or where you work, we are always accessible. No call centres, no personal assistants, no press 3 for sales and service. Just one direct number that you can call 24 hours a day, 7 days a week. At QuickSelect we work to your timings and are always just a phone call away to answering your questions. We know that convenience is one of the key reasons you will use us. No hard sales, no fees, and no sign on the dotted line. We value your time and understand the importance of not rushing into decisions.

We provide you with information for you to review in your own time so that you can be sure you are making the right choice. Our assistance does not end upon settlement – we keep looking to make sure you always have the best choice. We see you through the entire home loan process, processing and managing the application from start to finish, making suremastersoftwaret-004 you are kept informed every step of the way.

Confidence

We believe that our rigorous can-do attitude will give you the confidence that you are receiving the best options and solutions from us. By choosing QuickSelect you have assurance that you are receiving expert advice from brokers who have years of experience helping people with their home loans. All of our Mortgage brokers are MFAA accredited. At QuickSelect we specialise in home loans and are committed to delivering what’s right for our customers. A home loan is a long term proposition, and having a knowledgeable mortgage broker that can guide you both today and in the future is invaluable. We will have many conversations over the life of your loan as we constantly review your needs and help you clarify your potentially changing position.

We always listen first, before asking questions to determine what is most relevant and important to you. We are genuinely passionate about working with you to get the best out of the system and fine tune when required, to get the best outcome for you. Circumstances change and nothing is ever constant. At QuickSelect we see the opportunities not the obstacles-we use our knowledge to always get you the best result. If there is a way it can be done then it will be found.mastersoftwaret-005

We work with you every step of the way to ensure you have a comprehensive understanding. If hiccups arise from the lender and they sometimes do we ensure they are dealt with efficiently and effectively, and as quickly as possible. Our expert brokers are experienced in all different types of home loans so you can be confident that you are getting what’s right and best suits your needs. We consider the structure and portability of the home loan over the long term to ensure that your home is yours quicker, faster and cheaper.

We are passionate and driven in our relentless commitment to one simple fact– to see you through your entire journey, from start to finish.

THE REFINANCING PROCESS.

Switching lenders could get you a better deal, with the potential to save you thousands over the lifetime of the home loan. We will guide you through the refinancing process step by step so you can get more out of your mortgage, sooner.mastersoftwaret-006

1. Consider the costs

Refinancing is a big step, and whilst QuickSelect see you through the entire journey, it is important to consider the time and costs involved in refinancing. You should take into account any upfront and ongoing costs associated with exiting your existing home loan, and switching to a new lender. These may include settlement fee, loan establishment
fee, mortgage registration fee, loan service, and exit charges. Your current home loan provider will be able to inform you whether they have a loan termination fee. A QuickSelect home loan broker should also be able to discuss the possible fees and charges involved so you can understand what it will cost to refinance your home loan. They’ll also be able to help determine how much you can save in the long term so you can make an informed decision as to whether refinancing is the best, and most cost effective choice for you.

2. Choosing the right home loan for you

Take some time to consider whether refinancing is right for you, and what it is that you want to get out of the refinance. Once you have narrowed down what you are looking for in your home loan, we can help you to achieve it. With
access to over 40 lenders and 2,500 products, our expert home loan brokers are able to compare a huge variety of home loans to identify the best product to suit your budget and lifestyle - whether you wish to pay off your loan sooner
and save money, keep your repayments low, access improved loan features, or even access the equity in your home. There are many different loans to consider: basic, fixed, variable, split, bridging and equity. Based on the information you provide us with, we aim to provide you with a choice of loans especially suited to your needs. Here’s a guide to your most common loan types:

  • Standard Variable Loans (SVL)

Variable home loans are loans with an interest rate which is dependent on market interest rates. This means that the interest rate will vary, fluctuating as the market interest rate goes up and down according to changes in the official
cash rate. Most banks have a SVL which is used as a reference point to add discounts for various packages. If you are on a SVL you may be paying too much. Variable interest rate loans can provide a great advantage if the official cash rate falls.

  • Basic variable loans

Basic ‘no frills’ loans have a relatively low variable interest rate. These loans often attract first-time buyers due to their lower rates, and usually have less flexibility and features than standard variable loans. Basic variable loans often lack features such as offset facilities, redraw, extra repayments and ability to split the loan, so it is best to work out what it is you want from the loan.mastersoftwaret-007

  • Fixed-rate loans

Fixed rate loans let you lock in a specific interest rate, and provide security and regularity, making budgeting easier. During the fixed rate period (usually 1-5 years), the interest rate on your home loan will stay the same, allowing your repayments to remain the same. At the end of the term you have the option to lock you loan back into another fixed term or change to a variable or split loan. Fixed rate loans are best suited to people who seek consistency, as it helps you to plan your budget as you will know exactly how much you need to pay each month. However, if the market rate goes down, your interest rate will still remain the same.

  • Split loans

Split loans give you the flexibility of both a fixed rate and variable loan. These loans allow you the best of both worlds – you can have the certainty of locking in portions of your loan with a fixed rate, whilst having the flexibility to make unlimited additional repayments at a variable rate. This allows you to benefit whether interest rates rise or fall. Split loans can also be used if you wish to consolidate all your debts into your home loan, by retaining the consolidated debt as a ‘split’ where by the repayments are managed separately to your home loan but still have the same interest rate.mastersoftwaret-008

  • Honeymoon loans

These loans can be especially appealing to first-time buyers due to the initial discounted interest rate. Honeymoon loans are great for providing a short term bonus - the lower interest rate usually only lasts for a limited time, before the loan reverts to a standard variable rate. The lower interest rate makes it a good way of getting a financial head start whilst getting used to paying a mortgage. However, it is important to consider the loan’s long-term structure and features. Be aware that lenders will usually impose exit fees for borrowers that wish to refinance once the honeymoon period is up.

  • Bridging/relocation loans

Bridging loans are suited to people already on the property market, looking to move. As the name suggests, a bridging or relocation loan helps to ‘bridge’ the gap between the selling of a current property and the buying of a new one. It can often be complicated when waiting for completion of the sale after the completion of a purchase for the new property. The lender will usually take security over both properties until the sale is complete, providing the ‘bridging amount’ is lower than 80% of both properties.

  • Equity loans

Think of these loans as using the equity of your home as a credit card to fund other things such as investment or renovation. Home equity is the difference between the value of your home and the money you owe. These loans are usually only available if you have a larger deposit secured or good equity in your home and suit those who are looking to renovate their home or invest in a second property. These loans are mastersoftwaret-009best suited to those who have a disciplined approach to money, You can structure it in various ways that can benefit you depending on your needs. Remember that by using your equity, you are adding to your level of debt and therefore your home loan will take longer to pay off, or your repayments will increase.

  • Construction loans

If you are looking to build a property from scratch, a construction loan allows you to draw down the loan amount as and when you need it. This means that you are not paying interest repayments on the entire amount from the beginning. Instead, you can drawdown loan amounts at parallel stages to the mastersoftwaret-010construction and therefore only paying interest on repayments on the portion you have used. Upon completion of the property construction, you have the option to choose which loan type you would like to convert to, i.e. variable, fixed or split.

  • Non–conforming loans

Non-conforming loans are suited to borrowers who are having difficulty finding a home loan with bigger banks and lenders. There are many reasons why you may not meet all of the strict lending criteria they provide, so these
loans often suit individuals who are self-employed, new migrants or those who have a history of credit impairment.

3. Applying to refinance your home loan

When you contact us, either online or by telephone, one of our expert mortgage brokers will discuss your goals and needs with you, in order to understand your current situation. We will provide you with the best three choices of loans, usually one from each tier of lenders, to ensure that we will see you through your refinance happy and informed. Once we have helped you to identify the best product to suit you, we can begin the refinance application.

During the refinance process you will be asked to supply supporting documentation which confirms all information discussed to date, including:

  • Your payslips
  • Your employment details
  • Your bank statements
  • Details of any other debts
  • Your mortgage repayment history
  • Current property ownership details
  • Personal Identification

4. Verification/Application and Valuation

Once we have received all the necessary documentation from you, we able to process your application and ensure we are matching your position with the institution with the best policy. Once the verification stage is complete, we will carry out a property valuation to work out how much your current homemastersoftwaret-011 is worth. This is something that we do this to ensure the property is a suitable security for the loan. Providing all information we have about you is correct, and the lending criteria are met, you should receive a letter of offer from the particular lender that we have recommended, which you will need to read carefully, sign, and return to the lender. Remember to keep a copy for your own reference.

5.Settlement

Settlement can be arranged as soon as the loan documents have been returned to the lender and they have received your signed letter of offer. The home loan of your property will be registered with the bank or lender, and we will ensure the draw down your loan. This involves paying off your existing home loan using the funds from your new home loan. Your lender will submit a ‘Discharge of Mortgage’ form to the Land Tiles Office in order to close the old home loan amount.

6.Congratulations on your refinance

Here’s to many happy years with your new lender and home loan.

7.Managing your loan

Loan repayments will begin on the chosen repayment date after settlement, e.g. fortnightly/monthly. We work hard at QuickSelect to ensure we are with you for the entire journey. We will help you to manage your loan by tailoring your repayment instalments to suit you and everything that life throws at you, whether that be reducing your regular payment, or making an extra payment. If hiccups occur, and sometimes they do, you want a Mortgage Broker that can
efficiently and effectively deal with the problem to ensure you are as worry free as possible.

At QuickSelect we understand that it is important to consider your current and future situations before making any home loan decisions. If done correctly, and for the right reasons, refinancing your home loan can save you money in
the short and long term. It may shorten your loan term and reduce your repayments, so you can own your home sooner.

Give us a call on 1300 874 871 and we can give your current home loan a health check, by taking time to understand all your needs and also the features of your current home loan, before helping you to decide whether you should refinance, and if so, what your best options are. We will see you through every step of the refinance process to ensure that it is convenient and delivers you better value.



invest
investment
Property investment is becoming increasingly popular amongst Australians, as residential real estate delivers tax friendly income. However it is important to remember that investing in property is a big step, and it is profitable to seek expert professional advice when selecting, purchasing and owning an investment property. There is a huge choice of investment home loan options and repayment strategies available to property investors, and at QuickSelect we are here to help you through the entire process in order to make your investment a success and help you to build your wealth.
1.Planning your investment strategy
Should I invest in property?

There are various reasons as to why people decide to invest in property.However, as with any investment, it is important to consider the pros and cons and decide whether property investment is right for you.table1

Define your financial goals

Whether you’re a first time investor, or looking to expand your portfolio, a clear investment strategy is crucial. For a successful investment you should have a sense of what you want to achieve, and be aware of the challenges involved. If you arrange your finances to your greatest advantage, and seek help from a professional, investing in property can be a solid long-term option to build wealth. By defining your goals, and managing your home loan carefully, you can expect rewarding returns.

What is my investment strategy?

It is important for you to have a clear plan and investment strategy in place, with a realistic budget and committed approach. This helps you to realise what it is that you are looking to achieve, making it easier to highlight the challenges involved, and therefore easier to manage them and succeed. Some points to consider:

    • How much will the property cost you if you own it?

vs.

  • How much you could earn from renting it?
  • How often will you have tenants?
  • What is a realistic rental return to expect considering location, size and condition of property?

Investing in property can be a great way to build wealth through:

  • Capital growth – the market value of your investment property rising
  • Income generated from the rent
  • Tax benefits through gearing

mastersoftwaret-002
it is important to remember that it is a long-term commitment, and you should ensure that the property provides regular returns that are large enough to cover your mortgage repayments and build your wealth. Ensure you understand gearing and how an investment property could make you eligible for a range of tax benefits.

What is positive gearing?

Positive gearing occurs when the income from your investment property is greater than the expenses, i.e. you receive more rent on a property than the total costs of the repayments, interest and property maintenance. This tends to happen when rent prices are high, and interest rate are low.

What is negative gearing?

Negative gearing occurs when you spend more on the investment property (interest on loan, council rates, management fees etc.) than you receive from it (rental income). This can however have benefits, including:

  • Opportunity to gain potential tax advantages in some cases - ability to offset the loss against other assessable forms of income, reducing your taxable income. Remember to keep all your receipts and records for home loan related fees.
  • Potential for long-term capital growth/appreciation of the property.

What is Capital Gains Tax?

Capital Gains Tax (CGT) may apply to any capital gains on your investment property when you sell it, and is assessed as part of your income tax. You may be entitled to a discounted tax rate if you held the property for longer than 12 months

How much can I afford to invest?

Before you begin to look for an investment property it is important that you know how much you can afford to spend and repay. Your borrowing capacity will depend on a number of factors. You can use our online calculator to gain an estimate of how much you can borrow, based on your current income and expenses, i.e. other financial commitments.

Access your equity

Equity is the difference between the amount you owe on your home loan and the market value of your property. Most people use the equity they have built in their existing home to invest in another property. If your loan to value ratio (LVR) is lower than 80% you will not need to pay Lenders Mortgage Insurance (LMI).equity

For example, if your home is worth 0,000 and your loan amount is 0,000 you would have 0,000 equity, and an LVR of 67%. You may wish to buy an investment property for 0,000 and would need a ,000 deposit to avoid LMI. You can use the equity in your existing home as a deposit for the investment property and borrow the full value of the investment property.
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What costs are involved in investing?

In addition to the investment home loan itself, there are variety of purchase costs and on-going costs involved that you should consider

One-off costs

  • Deposit

You will need a deposit of 10% of the purchase price to put down as a deposit for an investment property. You can often use the equity in your home to secure a deposit for an investment property.

  • Stamp duty

Stamp duty is an external cost levied by the government payable by the purchaser of the property. The costs vary from state to state, and will depend on the purchase price of the property. Stamp duty for an investment property is usually higher than the stamp duty you would pay on a principal home. You can use our online calculator to find out the stamp duty you will pay on your investment property. Link...mastersoftwaret-003

  • Legal and conveyance fees

These fees cover the cost of the legal documents needed for transfer of ownership, usually carried out by a conveyancer or solicitor.

  • Government fees

The government requires every home loan to be registered, so you will need to pay a mortgage registration fee which will vary depending on state. A transfer fee will also be charged by the government upon the transfer of ownership of the property.

  • Lenders Mortgage Insurance

Lenders Mortgage Insurance (LMI) is insurance that the lender takes to protect itself against a borrower defaulting with a small deposit. Generally if you need mastersoftwaret-004to borrow anywhere between 80% and 90% of the purchase price of your investment property most lenders will require you to pay LMI. This means if you are purchasing a property and are placing less than a 20% deposit down, you will mostly likely need to pay LMI. LMI protects the lender against the small risk that you are unable to meet the repayments when you wish to start purchasing your property with a smaller deposit.

  • Mortgage repayments

Your rental payments should generally cover most of your monthly mortgage fee, however you may need to cover the shortfall. Remember to consider the interest costs and chance of rate rise.

Ongoing costs of managing your property

If you decide to rent out your investment property you will also need to consider the following costs:

  • Council rates

Usually council rates and government taxes are the responsibility of the landlord. These rates vary from state to state.

  • Utilities

Any utilities that do not have separate metering devices, such as water, are usually the responsibility of the landlord. These rates vary between providers and states.

  • Real estate commission

If you decide to rent your property out through a real estate agent, commission is usually charged.

  • Fitting out the property

As a landlord you will need to decide whether you provide the property as furnished or unfurnished, and weigh up the pros and cons.

  • Repairs and maintenance

As a landlord you will be responsible for the maintenance of the property, including gardening and cleaning costs, as well as any repair work that needs to be carried out. Maintenance of a property is generally tax-deductable.mastersoftwaret-005

  • Building and landlord insurance

Building and landlord insurance will not only protect you from unforseen building repairs, but also from common tenant problems including damage caused, refusal to pay rent etc.

  • Property management

It is possible to manage a rental property yourself, but it’s worth considering hiring someone to manage your property for you to save you time and keep you emotionally detached from your tenants. Seeking professional property management will usually set you back by about 5% of the rent.new_prop

2. Choosing a property
How do I choose the right investment property?

It is important to realise that how you decide on a property for investment may be different to how you decide on your own home – you are looking to invest and generate income from this property

Consider your investment strategy when deciding on a property.

  • Are you looking to generate long term capital growth?
  • Are you looking to generate short term rental income?
  • Are you looking to negatively gear?

Take time to do your research. Have a look online and view some properties to get an idea what is on the market so you can determine what is popular. Consider a variety of property types and locations, in order to find the best property to invest in. Keep up to date on the latest property trends – even though you won’t be living there, you need to make sure it will appeal to most people. This means considering the type of person who is likely to rent the property.

Things to consider:

  • Property type – house/apartment, level of security, car space/garage etc.
  • Property location - proximity to CBD/transport/jobs/schools, type of suburb, rental yields etc.
  • Property value – be aware of economic conditions and keep an eye on property prices, and use the market to your advantage.
  • Potential capital growth – will the property value increase over time? (consider type of property, property location and stage of property cycle).Here’s some points to consider when weighing up a new or established property:

3.Choosing an investment loan
What types of loan are out there?
Which loan is right for me?

There are many different loans to consider: basic, fixed, variable, split, bridging and equity. Based on the information you provide us with, we aim to provide you with a choice of loans especially suited to your needs. Here’s a guide to your most common loan types:mastersoftwaret-006

  • Standard Variable Loans (SVL)

Variable home loans are loans with an interest rate which is dependent on market interest rates. This means that the interest rate will vary, fluctuating as the market interest rate goes up and down according to changes in the official cash rate. Most banks have a SVL which is used as a reference point to add discounts for various packages. If you are on a SVL you may be paying too much. Variable interest rate loans can provide a great advantage if the official cash rate falls.

  • Basic variable loans

Basic ‘no frills’ loans have a relatively low variable interest rate. These loans often attract first-time buyers due to their lower rates, and usually have less flexibility and features than standard variable loans. Basic variable loans often lack features such as offset facilities, redraw, extra repayments and ability to split the loan, so it is best to work out what it is you want from the loan.

  • Fixed-rate loans

Fixed rate loans let you lock in a specific interest rate, and provide security and regularity, making budgeting easier. During the fixed rate period (usually 1-5 years), the interest rate on your home loan will stay the same, allowing your repayments to remain the same. At the end of the term you have the option to lock you loan back into another fixed term or change to a variable or split loan. Fixed rate loans are best suited to people who seek consistency, as it helps you to plan your budget as you will know exactly how much you need to pay each month. However, if the market rate goes down, your interest rate will still remain the same.

  • Split loans

Split loans give you the flexibility of both a fixed rate and variable loan. These loans allow you the best of both worlds – you can have the certainty of locking in portions of your loan with a fixed rate, whilst having the flexibility to make unlimited additional repayments at a variable rate. This allows you to benefit whether interest rates rise or fall. Split loans can also be used if you wish to consolidate all your debts into your home loan, by retaining the consolidated debt as a ‘split’ whereby the repayments are managed separately to your home loan but still have the same interest rate.mastersoftwaret-007

  • Honeymoon loans

These loans can be especially appealing to first-time buyers due to the initial discounted interest rate. Honeymoon loans are great for providing a short term bonus - the lower interest rate usually only lasts for a limited time, before the loan reverts to a standard variable rate. The lower interest rate makes it a good way of getting a financial head start whilst getting used to paying a mortgage. However, it is important to consider the loan’s long-term structure and features. Be aware that lenders will usually impose exit fees for borrowers that wish to refinance once the honeymoon period is up.

  • Bridging/relocation loans

mastersoftwaret-008Bridging loans are suited to people already on the property market, looking to move. As the name suggests, a bridging or relocation loan helps to ‘bridge’ the gap between the selling of a current property and the buying of a new one. It can often be complicated when waiting for completion of the sale after the completion of a purchase for the new
property. The lender will usually take security over both properties until the sale is complete, providing the ‘bridging amount’ is lower than 80% of both properties.

  • Equity loans

Think of these loans as using the equity of your home as a credit card to fund other things such as investment or
renovation. Home equity is the difference between the value of your home and the money you owe. These loans are usually only available if you have a larger deposit secured or good equity in your home and suit those who are looking to renovate their home or invest in a second property. These loans are best suited to those who have a disciplined approach to money, as if you default on your loan the lender will sell your home to pay out the loan. Remember that by using your equity, you are adding to your level of debt and therefore your home loan will take longer to pay off, or your repayments will increase.

  • Construction loans

If you are looking to build a property from scratch, a construction loan allows you to drawdown the loan amount as and when you need it. This means that you are not paying interest repayments on the entire amount from the beginning. Instead, you can drawdown loan amounts at parallel stages to the construction and therefore only paying interest on repayments on the portion you have used. Upon completion of the property construction, you have the option to
choose which loan type you would like to convert to, i.e. variable, fixed or split.

  • Non –conforming loans

Non-conforming loans are suited to borrowers who are having difficulty finding a home loan with bigger banks and lenders. There are many reasons why you may not meet all of the strict lending criteria they provide, so these loans often suit individuals who are self-employed, new migrants or those who have a history of credit impairment.

What investment loan is best for me?

It is important to choose a loan that suits you and your investment strategy. Some features to consider:

    • Home equity - many investment loans allow you to use your home equity to secure the investment property. This helps to boost your borrowing power as well as reduce paperwork as you don’t need to apply for a new loan.
    • Interest only repayment option - if are you looking to obtain short term finance, i.e. free up your cash flow, it may be worth considering an interest only repayment option. Currently interest payable on an investment loan is 100% tax deductable. Recently, interest only terms have been extended to 15 years with some institutions.

mastersoftwaret-009

  • Interest in advance option – by paying up to 13 months of interest in advance you can maximise your tax deduction at the end of each financial year.
  • Fixed or variable rate - do you want the certainty of a fixed rate loan, or the flexibility of a variable rate loan?
  • Mortgage offset – a mortgage offset account can be linked to your investment account in order to offset against your outstanding loan balance.

Should I get a principal and interest or an interest-only loan?

It’s important to decide what type of loan is best to use to fund your investment property. Whilst most regular home loans are known as principal and interest loans, an interest-only loan can be useful to investors. Whereas a principal and interest loan requires two amounts to be paid per cycle – a payment towards the actual amount borrowed, and a payment for the amount of interest charged, an interest-only loan as the name suggests, only requires you to pay, as a minimum, the accrued interest. You are able to pay above the minimum amount if you want to. This helps to minimise your
outgoings and therefore limit losses on a negatively geared property.

4. What is involved in renting out my investment property?

You are probably familiar with the buying process if you’re considering an investment property. However, you will need to decide whether or not you wish to rent the property out, and if so, whether you are going to manage it yourself or use an agent. Seeking professional property management will usually set you back by about 5% of the rent. Whilst it is possible to manage a rental property yourself, it is worth considering hiring someone to manage your property.

If you decide to manage the rental property yourself, you’ll be responsible for:

  • Finding tenants
  • Checking references
  • Drawing up a written lease
  • Banking the bond
  • Writing a property condition report
  • Inspections and maintenance
  • Chasing unpaid rent

We understand that it is important to consider your current and future situations before committing to any home loan decisions. If done correctly, and for the right reasons, investing in property can be a solid long-term investment.

Give us a call on 1300 874 871, and we can assess your current financial situation and goals, before helping you to decide whether you should invest in property, and if so, what your best options are. We will see you through every
step of the investment process to ensure that it is convenient and worry free.