Common questions about Home Loans

The amount you can borrow is commonly known as your borrowing capacity. Your borrowing capacity will differ from lender to lender. To establish your borrowing capacity, call us to arrange an interview for an assessment of your situation.

The First Home Owner Grant scheme provides a grant to first homeowners. It is a one-off payment to assist eligible first home owners with purchase or construction costs. Currently the grant is $nil, for established properties and $10,000 for new builds. This amount is in addition to any reduced or waived purchase stamp duty costs. Stamp Duty is waived for approved first home buyers on purchasers up to $430k and this stamp duty is reduced for purchases between $430k and $530k.

As a basic rule, you are eligible if you are an Australian citizen or permanent resident, buying or building your first home in Australia, with the intention of occupying it as your principle place of residence within 12 months of the settlement. It is important to note that if you are buying the property in conjunction with others, they must also meet the same criteria for the grant to be applicable.

Generally, if you are an owner-occupier you will require 5% of the purchase price as a deposit. If you are an investor, you will require 5-10% of the purchase price. The deposit required depends largely on the type of home loan and, of course, the lender you select.

As a rough guide, it is recommended that you budget 5% of the purchase price, on top of your deposit, to cover fees and charges. These fees and charges may include (but are not limited to):

• Building/pest inspection
• Valuation fees
• Lenders mortgage insurance (LMI)
• Solicitor fees
• Insurances
• Connection fees – phone/gas/electricity
• Rates
• Removal fees

The whole finance process, from initial appointment to signing the papers can take up to four weeks. However, it generally takes about two weeks to have everything ready. Your mortgage broker will follow up with the lenders regularly to keep the whole process on track.

Lenders Mortgage Insurance (LMI) does not protect the borrower should they be unable to make mortgage repayments. It protects the lender from any losses resulting in the sale of a property due to default by the borrower. LMI premiums are payable by the borrower when the amount borrowed is above a certain percentage, usually 80%, of the lender’s valuation of the property. Some lenders will allow you to add the LMI premium to your home loan; others require you to pay it up front.

In conjunction with submitting your home loan application, you may need supporting documentation confirming your identity and substantiating your income. Documents can include:

• Proof of Identity (Driver’s licence, Birth certificate, Passport)
• Confirmation of any Centrelink monies received
• At least one month’s worth of recent pay slips
• Tax returns and/or group certificates
• Current Bank statements, credit/store cards statements, statements on any other loans
• Offer and Acceptance, receipt for the deposit paid on house/land. Your consultant will be able to provide an accurate overview of what’s required for your individual situation.

imfs does not generally charge a fee for service, as we receive payment from the bank. In the event that there is no fee paid by the bank, there may be a nominal fee for service charged, however, this would be the rarity and not the norm.

Pre-approved finance is when you apply through imfs to a lender to obtain their approval to purchase a property.

This pre-approval is generally valid for 3 months, and will provide you with a piece of paper from the bank, to state that you have pre-approved finance. This will enable you to be taken seriously as a purchaser for property in the market, and may even get you a more competitive price with your offer!

Every loan is different, and your circumstances won’t be the same as anyone else’s. Talk to one of our finance consultants at imfs to find out which loan type is best for your particular and unique situation.