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FAQ
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Frequently Asked Questions
1. Why should I use a Mortgage Broker?
1. Save money
With access to thousands of financial products and mortgage, and direct bank contacts, Capricorn Financial Services can source, negotiate, and structure the most suitable home loan for you. By ensuring you have the right mortgage for your needs, we can save you thousands of dollars throughout your home loan.
2. Receive guidance & advice
The Australian lending market has a huge variety of lenders; including banks, credit unions, building societies, and mortgage managers. Our expert team can guide you through the finance jargon, and not only help you find the right home loan, but also answer all of your questions and educate you along the way.
3. Save research time
Contacting banks and comparing loans online can take a substantial amount of time. At Capricorn Financial Services, we have the software, bank contacts, and systems to quickly filter through the loan products – meaning you don’t have to!
4. Avoid the paperwork
We complete all the necessary paperwork, and coordinate settlement between the lenders, conveyancers, settlement agencies, real estate agents, and builders. We’re here to make life easier for you.
5. Gain long-term peace of mind
Our team is always here to help; whether you have questions about your home loan, are seeking ongoing home loan suitability checks, or market updates we’re here to help. You have our ongoing support, at no cost.
6. Avoid lending hazards and pitfalls
Many products available look like a great deal on the surface. But under the surface, they may impose penalties and, fees & charges that aren’t so obvious. Capricorn Financial Services will help you avoid signing up for any loan product that you may regret later.
2. What are your fees?
You don’t pay us anything!
Mortgage brokers in Australia are paid an upfront commission and a trail commission from the lender for successfully introducing you to them. At Capricorn Financial Services, we rely on this commission for our income and we provide our services to our clients, like you, free of charge.
3. What does LVR mean?
When you are working out how much you can borrow to purchase a property, the size of the deposit you need to save, and whether you are eligible for a particular mortgage product, the Loan to Valuation ratio (LVR) is one of the most important considerations.
In the simplest terms, the LVR is the percentage of the property’s value, as assessed by the lender, that your loan equates to. So, if the property you want to purchase is valued at $500,000, and you need to borrow $400,000 to pay for it, the loan is 80% of the property’s value, making your LVR 80%.
LVR is important because different lenders and their respective loan products have different maximum LVRs, and some lenders will only lend up to a certain LVR for certain property types, or properties in certain areas.
Most lenders will finance 80% LVR or higher with Lenders Mortgage Insurance (LMI) while Low Documentation (Low Doc) loans may be limited to 60% LVR without LMI.
4. What is Lender's Mortgage Insurance?
Lenders Mortgage Insurance protects your lender against a loss should you, as a borrower, default on your home loan. If the security property is required to be sold as a result of the default, the net proceeds of the sale may not always cover the full balance outstanding on the loan. If this happens, your lender is entitled to make an insurance claim to the LMI provider for the reimbursement of any shortfall.
Lenders Mortgage Insurance typically becomes payable when:
- You have a Loan to Value Ratio (LVR) of over 80% for a full documentation home loan (standard home loan)
- You have a Loan to Value Ratio (LVR) of over 60% for a low documentation home loan (self-employed person).
It’s important to remember that your lender is the insured party – not you as the borrower, nor any guarantor.
LMI should also not be mistaken for Mortgage Protection Insurance, which covers your mortgage in the event of death, sickness, unemployment, or disability.
5. What's a Pre-Approval?
A pre-approval is confirmation from the lender that they are happy with the scenario your broker has prepared and submitted, and are happy to lend you money providing their conditions are met. There may be specific conditions requested but there are some that are standard as follows:
- A satisfactory valuation
- An employment check
- Formal acceptance from the mortgage insurer (if applicable)
A pre-approval usually lasts for 90 days, but we can assist you to renew your pre-approval if you haven’t found a property to purchase in that time.
6. Why should I use a Mortgage Broker when I can just go to the bank myself?
7. What do Mortgage Brokers actually do?
At Capricorn Financial Services, our mortgage brokers take the time to understand your needs and requirements and work with you to determine your finance needs, repayment ability, and cash flow requirements to select a loan or financing solution suited to your circumstances. We manage the entire process, from application through to settlement, and beyond.
- We do all the research and provide you with the most competitive solutions for your specific needs.
- We have access to a wide range of loans and lenders
- We understand the market and the available products
- Provide greater flexibility and options than just one lender
- We have great expertise, as we only focus on lending
Ask Your Questions
Do you have a question you can't find the answer to? Get in touch and we'll be happy to give you the help you need.