Frequently Asked Questions

What is my borrowing capacity?

This should be the first and very important question that we have to ask ourselves: how much can I borrow? After calculating our incoming and outgoing funds, we can get a clear picture of how much you can borrow to purchase a property. When determining how much you can borrow, banks and lenders mainly look at:

Credit card limits, car loans, personal loans
Income and types of income (e.g., full-time, part-time, casual, contract)
The size of the loan compared to the property value (LVR)
Number of dependents and their age
General living expenses
Existing asset position (client contribution towards the loan)

To Increase Borrowing Power:

Pay off (or decrease) and close any credit card and other current liabilities if possible
Start saving by decreasing miscellaneous expenses
Try to find a bank that does not calculate existing mortgage with the same assessment interest in the proposed loan

Should I find a property or get approved for a home loan first?

We recommend that you get a Pre-approval before hunting for a property. This will give you peace of mind that you have a loan approved as well as knowing how much you need to spend without exceeding your budget.

What is lender mortgage insurance (LMI)?

When you borrow more than 80% of the property value, the lender will seek mortgage insurance to protect the lender from losses. Mortgage insurance provides coverage to the lender NOT to the borrower. It is a one-off payment and can be accumulated in loan amount itself, talk to Laxmi Home Loan Team to get a clear idea.

How long will it take for my home loan to be approved?

Most financial institutions will grant you one of the following but depend on the client’s situation.

A pre-approval within two to three business days which will allow you to shop around for a property.

A conditional Approval within two to three business days.

A formal (unconditional) approval within two to seven business days depending on the valuation of the property.

I'm not an Australian resident or citizen I hold visa like 457, 489, can I apply for a home loan?

Yes you can, providing you obtain a Foreign Investment Review Board approval. For full details you can visit the Foreign Investments Review Board website at: www.firb.gov.au

Can I use a guarantor to help get my loan approved?

You can use a guarantor provided they’re a Spouse or a Family Member. They can assist you with a Guarantee over Security or act as an income Guarantor. The rules for this do tend to vary according to the situation and the lender, it is best to talk with Laxmi Home Loan Team to get a clear idea.

Will I be penalized if I make extra repayments on my variable loan?

No, you will not be penalised for making extra payment. However, if you pay more than certain limit on fixed portion of loan, you will be penalised. For example:- some banks allow to make extra payment up to $10k per year in fixed portion of loan amount.

I have a default; will I get approved for a home loan?

Depending on what the default is, who lodged it and how much it is for, you may be considered for home loan approval, talk to Laxmi Home Loan Team to get a clear idea.

Will I need a solicitor?

You can choose to get a Solicitor or Conveyancer to assist you with the purchase of a property but we highly recommend getting professionals advice.

What is Stamp Duty?

Stamp Duty is payable on purchases of properties. There are two different types of Stamp Duty:

Stamp Duty on the Transfer of Title, which is charged by state governments and paid by the purchaser.

Stamp Duty on the Mortgage – this duty has been abolished for most owners occupied and investment property loans but you may be required to pay it on other types of loans. Stamp Duty varies by state to state. The information on Stamp Duty or eligibility for an exception by state is available on the following websites: NSW – www.osr.nsw.gov.au.

Frequently Asked Questions

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