FAQ’s

Q: What is the most favourable Interest Rate I can get?

A: This is often the first question we are asked but the answer is not so simple.  Your rate is important, however ensuring the right product and structure is put in place to help you achieve your goals and objectives is essential. 

Despite how sharp a lender’s rates may be, firstly, that rate may change (if you are on a variable rate) and secondly, if you do not satisfy that lender’s criteria, the rate doesn’t matter as you would receive approval through them due to not meeting their eligibility criteria.

The benefit of Think Finance doing their homework with multiple lenders on your behalf (without affecting your credit score) is they will check the lender’s policy, rates, products and fees etc. for you.

Think Finance will then come back to you with options to meet your goals and needs, whilst ensuring you are not lodging a loan with a lender whose policy you do not satisfy and also covering finance structuring to suit your requirements.

Q: Does using a mortgage broker affect my credit score more than going directly to a bank?

A: No.  The difference is that Think Finance can do the preliminary homework with multiple lenders to look at your borrowing capacity without lodging an application and affecting your credit score. 

Think Finance can also look to match your circumstances with the lender’s policy before an application is lodged and without affecting your credit score. 

Your credit score is usually only affected once a credit check is done by a lender when the finance application is lodged.  It does not change or affect your credit score more or less by going through a broker than going directly to a bank.

If you are not sure what your credit score is, phone us at Think Finance for a complimentary credit report.  This is also a soft touch on your credit report and does not affect your credit score.

Q: How much can I borrow?

A: The Million Dollar Question! 

Your Borrowing Capacity can vary from Lender to Lender, and depending on your current circumstances this may dictate which Bank or Lender you can apply to for finance. 

The type of employment, how long you have been employed, whether you are Self-Employed or a Contractor or Full-Time PAYG or Casual can impact which Lenders we look at.  What LVR (Loan to Value Ratio) you are looking at i.e. 80% or 95% can determine which Lenders we go to. Your credit score and how quickly you require approval along with where the property is located and what type of property you are purchasing can also determine which Lenders are considered.  

Each lender has its own set of rules and policies and each Lender has their own servicing calculator which determines your borrowing capacity.  

In short, your borrowing capacity depends on which Bank or Lender you fit with and what their calculator shows as your borrowing capacity or serviceability level.

Although your information doesn’t change, the way it is required to be entered and how it is then calculated can have different outcomes with different calculators.  (Have a play on our Borrowing Power Calculator)

Providing Think Finance with the information requested allows us to do the homework required on your behalf so that we can come back to you with the answers you are seeking.  

On the other hand, not providing us with all the information requested could mean we are not able to calculate your correct borrowing capacity.  Further, not disclosing or holding back on information, could not only result in you receiving the wrong information back (the results and options provided by us is a direct result of the information provided to us) but not having all of the correct information, could also result in you receiving a decline from a Bank or Lender which in turn could affect your credit score.

Q: What does a Mortgage Broker do?

A: A mortgage broker works on your behalf doing the required research with a multitude of lenders to provide you with the most suitable options for your home loan.  

We are the intermediary between you and the Bank or Lender and we look to achieve the solution you are seeking whilst considering your individual circumstances, the policies, rates, options, structuring, and fees.  

Lending can be complicated and the role of a Mortgage Broker is to do the relevant research and provide you with options to help you choose and apply for the most suitable home loan with a bank or lender based on what you are looking to achieve. 

Finance and Mortgage Brokers are loan experts who sift through lender policies and go back and forth with different banks and lenders and come back to you with options and recommendations.

Q: What is the difference between going to a Mortgage Broker or directly to a bank?

A: Time, Knowledge & Expertise! A Mortgage Broker will save you hours of research.

They can also access lenders you may not be able to access directly and we know the right questions to ask and lenders to check to see that you match their policy as well as product requirements as well as structuring advice to meet your goals and needs. 

Q: What will it cost me to use a Mortgage Broker?

A: Think Finance does not charge fees to help you obtain finance.  Lenders pay a commission to Mortgage Brokers which does not cost the consumer any more or less than going direct to a bank or other lender.

The advantage of going through a Mortgage or Finance Broker is that they will do all the homework for you, and they have the expertise, knowledge, and a large panel of Lenders to choose from.

Think Finance saves you from spending hours researching different banks and their products to find a solution suitable to your needs. This is their area of expertise. 

If you would like to know more about how Think Finance is paid by banks and lenders, please refer to our credit guide for more information: view our credit guide.

Q: Where should I start?

A: First things first, we need to know about you and what you want to do.

There are 3 ways to get started:

1. Book a time to catch up and let’s have a chat about your circumstances, needs, and goals. Contact us today.

2. Call for an initial 15-minute chat.

3. Complete our Electronic Fact Find and Checklist and email it back so we can get started on researching right away.  Then we can meet and go through your options.

Whichever you prefer, we are happy to accommodate your needs.  We will require the completed Fact Find and Checklist with whichever option you choose.

You can contact us at any time for a copy of this:  0409 892 890 or at Kym@ThinkFinance.Loans

Q: Why is it so much harder to borrow when you’re self-employed? 

A: Firstly, it’s not!

We hear this question from most of my self-employed clients.  It is not that it is harder to borrow, it is simply that there can be different policies and income assessments for self-employed applicants, compared to PAYG applicants.

Most lenders prefer 2 year’s ABN and 2 year’s GST registration, plus 2 years tax returns and 2 years of financial reports.  However, In saying this, there are lenders whose policy accepts 1 year ABN and GST registration. 

Your bottom line (or net profit) is not the only income that banks and lenders may consider from your financials and tax returns.  Some lenders accept some or all of the depreciation claimed in your reports as an “Add Back”. They may also consider, director’s fees, associated party wages, one-off costs, and more.  It is our job as Finance Brokers to understand what the banks and lenders will/won’t accept and complete our homework with this in mind.

At Think Finance, we do not believe it is harder to lend when you are self-employed, it is simply an understanding of what income and adbacks are acceptable to which lenders and matching your circumstances and goals to lenders’ policies.  It is then up to us to come back to you with the results we find based on the information you provide and your options found based on our research.

Q: What’s better – Fixed or Variable?  

A: This is a tricky question with a tricky answer!

I will preface this with… it depends on you, your circumstances, your current and future plans, and your level of comfort and risk.

Here are some of the benefits and pitfalls of fixed and variable and to throw a spanner in the works…. Another option is a Split Loan with a bit of both.

To start with, Fixed Loans can be great if you like the security of knowing what your repayments will be every month for the term of the Fixed period i.e. if you choose to fix for 3 years – for that 3-year period your repayment will be the same each month and after that, it will revert to variable. 

Variable loans run the risk of the rate going either up or down however, in some cases, you have the advantage of having an offset account and more flexibility to pay the loan off as quickly as you like and with lump sums.

With Fixed loans, if the rates change you are locked into that rate for the duration of the term you have chosen – whether they go up or down.

Fixed loans can also incur break costs if you pay off “too much”.  A vast majority of lenders cap the amount you can pay off over and above your regular repayments.

Not to complicate things further but it needs to be noted that some Lenders do have 100% offset accounts against their fixed loans and some have no break fees if you pay it down faster, but it is important to know which lenders allow this and if there are penalties for paying the whole loan out during that fixed period. 

With most lenders, if you change, alter, or pay out a fixed loan during the fixed period (including refinancing), you may incur break fees and what those fees are, can only be determined by the bank or lender at the time you are looking to break the loan.

Another option is a split loan where you have part fixed and part variable and you can determine the size of each split i.e. 50% 50% or 20% 80% etc.  It also needs to be noted that some lenders have a minimum on the split balances for example if your loan is $400,000 they may not allow a $10,000 and $390,000 split but may allow a $50,000 and $350,000 split for example.   

A mix of fixed and variable can be a good option depending on your needs, comfort levels, and plans to pay down the loan and/or how long you intend to hold the property for. (Crunch some numbers in our Interest Only Calculator to get a better idea of where your figures may sit)

Q: Can I fix my credit score?

If you have a low credit score or something adverse on your credit file that should not be on there, please contact Think Finance immediately.  We can do 2 things for you right away:

1. With your written permission and a colour copy of the front and back of your driver’s licence, we can obtain a credit report from Equifax which will show your current credit score.  This report comes back to us immediately. Please note, you can also apply to Equifax directly (through their website) and request a complimentary credit report (you are entitled to 1 complimentary credit report each year) however, it will not show your current credit score.

2. We can provide you with the details of a No Win No Fee Solicitor who can look to argue adverse information that you believe should not be on your report.  The result of defaults being removed could be the difference between you getting finance or not. 

Depending on your credit score, what the default is, and when it occurred, there are several lenders that may still consider your application.  

Contact Think Finance to discuss this further as there may be options for you to either have your credit score and report rectified or, there may still be options available to you in Lending. 

Q: What are the steps in applying for finance?

1. Contact Think Finance for an Appointment or Phone Interview 

2. Complete the Fact Find and Checklist 

3. Think Finance will assess your information and come back to you with your finance options (if we haven’t met already at this stage, it would be a great time to get together and go through our findings and answer any further questions you have at this stage)

4. Give Think Finance the go-ahead to prepare the Application 

5. Sign the Application and accompanying documentation and provide any outstanding information for lodgement

6. Application Submitted

7. Application Outcome

8. Sign Mortgage Documentation

9. Arrange your Insurance (if it is not already in place) as this will be a condition of settlement  

10. Settlement is booked by the Lender/Solicitor and Think Finance will advise once the Settlement is Complete.

Q: How long will it take to get an approval? 

A: The short answer is ~24 hours to ~21 days.  

How quickly can you provide your information to Think Finance?  

If you are restricted to a specific lender due to your circumstances, the timeframe will be dictated by that lender’s turnaround times. Time frames can also be affected by volumes and seasons (i.e. during the Christmas rush timelines can be extended).

If you are signing a contract and you have not spoken to us to determine your eligibility and borrowing capacity (and you do not have a pre-approval in place), ensure the contract is subject to a minimum of 21 days finance.

If you have a pre-approval, we still suggest having the contract signed subject to 14 days finance approval.  Although you have a pre-approval in place this approval is still subject to a valuation and depending on the timing of your approval, the lender may request further information to ensure your circumstances haven’t changed.  If the property you are purchasing is occupied, it may take a few days for the occupants to allow the valuer through the property to complete the valuation. 

We will always suggest seeking legal advice prior to signing a contract.

Q: How much deposit do I need?

A: The Purchase Price, what you are buying, where you are buying, and what your borrowing capacity is can all be determining factors as to how much deposit you will require.

The easiest way for us to answer this for you is to contact Think Finance and ask us for a Deposit & cost summary based on the purchase price you are considering and whether you are looking to build or buy an established property.  The stamp duty will change depending on whether you are purchasing an established property or a house and land package and whether your purchase is for owner-occupier or investment purposes.

Some lenders will lend up to 80% of the Value of the Property (also known as 80% LVR) and some will lend up to 99.9% of the value of the property depending on the purpose, the property and your circumstances.  

Certain industries are eligible for a LMI (Lenders Mortgage Insurance) waivers which means they can borrow up to 90% LVR without paying mortgage insurance, but for most once you borrow over 80% you would be required to pay LMI and that cost will vary depending on your LVR and the lender.

First Home Buyers may be eligible for the First Home Buyers Grant and/or other Government Incentives which we can take into account in the Deposit & Costs Summary, plus First Home Buyers may be eligible for additional Stamp Duty concessions.

To receive an estimate of the Deposit and costs required call or make a time to chat with us at Think Finance and we will provide you with a clear breakdown for you to review. (Try our Savings / Deposit Calculator)

Q: What supporting paperwork do I need to provide with my application?

# See the checklist attached to my Fact Find

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