Brokers can help connect you to the lender better fit to serve your mortgage needs by shopping around on your behalf.

In order to decide whether or not to provide you with a loan, lenders will generally assess you against five qualities.

1. Your ability to repay the loan. To establish your capacity the lender will look at your employment history and salary to evaluate whether you have enough cash coming in reliably to pay the loan over time.
2. How much cash you have up front. Assessing your ability to put down a percentage of the value of the property being purchase up front is standard. The percentages vary though, and specialist lenders may approve a five per cent deposit.
3. The property appraisal price. Since the property is used as collateral if you are unable to repay the loan, the lender will value the property. Based on the report, the lender will decide whether the property is worth the loan being approved.
4. Your financial history. Your credit rating, expenses and debts will help the lender assess your character as a borrower and whether you are worth the risk.
5. Market conditions. Economic circumstances in the market can influence what interest rate you have access to and whether you need to provide extra security. They can also influence the repayment schedule.

While loan officers work solely for a lending institution and can only offer that institutions products, an Aloha Loans Finance Broker is able to shop around for you.

Finance Brokers are paid commissions by lenders to match borrowers to the right products, and can negotiate the lower rate on your behalf, which is why half of borrowers today turn to finance brokers when it comes to finding a home loan.

For assistance in tailoring your application to the lender and product that suits you contact on (02) 9614 0888 or enquire via our website here.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post How do lenders assess applications? appeared first on Sydney Financial Services - Aloha Loans.

Late payments and loan defaults leave marks on a credit history that can complicate any effort to refinance or secure a loan in the future. Default can also lead to a home being repossessed and sold by the lender, so it’s very important to act quickly to avoid it.

While late bill payments and a loan in arrears can impact your credit report and lead to difficulty securing finance in the future, the worst case scenario is repossession of a property.

In the past, lenders may have taken months to start the proceedings that lead to repossession. However, according to the Financial Rights Legal Centre (FRLC), this is not the case anymore.

Lenders work to a timetable to begin court proceedings and this can be very difficult to stop once this process has started.

Once a mortgagee has defaulted on a loan by failing to make repayments as agreed, they can be sent a Default Notice, which gives them 30 days to catch up on the repayments that are in arrears, as well as continuing to make any repayments that are due in the 30-day period.

This notice will include an acceleration clause. This means that if the arrears are still outstanding after the 30 days has lapsed, the entire loan becomes payable.

Thirty days after the Default Notice, the lender can take vacant possession of a property that is not occupied, or seek a court order for possession of a property that is occupied.

The key to avoiding this substantial trouble is, of course, to keep making repayments. From time to time, circumstances such as unexpected job loss or illness will impact a mortgagee’s ability to make payments and, when this happens, the key is to act quickly, as there are more options before a Default Notice is served than there are after.

Many lenders will negotiate short-term variations to repayment schedules as long as there is a plan to get back on track, and there are circumstances in which lenders are obligated to agree to such arrangements. It is important, however, not to agree to payment terms that cannot be met.

Make sure you think through your plan as to when you will resume making payments. Do not promise something you are not certain you can achieve or is not realistic. If you don’t know when things will improve, ask for an initial arrangement to be reviewed at the end of the agreed repayment arrangement.

One of the advantages of recognising a looming problem before you get behind in repayments is that a finance broker may be able to assist you to pinpoint the source of the problem, as well as identify savings that may be available by refinancing to a lower-rate or lower-fee loan. Once there are clear signs of financial distress, this will become much more difficult.

If you are struggling to make your mortgage repayments, Aloha Loans may be able to help you negotiate with your lender or find a more manageable loan. For more information, please contact us on (02) 9614 0888 or enquire via our website here.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post The Secret to Avoiding a Loan Default appeared first on Sydney Financial Services - Aloha Loans.

It’s easy to get carried away with the fun part of buying a property – looking at houses – but delaying the less compelling task of arranging finance will weaken your negotiating position on both the property and the loan.

Looking for a property to purchase is an exciting time. Choices regarding location, size, number of rooms and local amenities often see house hunters carried away in a deluge of daydreams and anticipation.

But, before you get carried away, it’s important to check off the essentials first. Although organising your finances may seem drab in comparison to perusing sales listings, gaining pre-approval with a lender will give you confidence about how much you can afford to borrow.

First and foremost, you need to determine if you’re eligible to borrow money from a lender. Your ability to repay the loan will need to be assessed as you don’t what to find out after you have made an offer that your credit history or deposit is not up to scratch.

Arranging finance before finding the perfect property will put you in a good position when it comes time to make an offer. When you do find the house you have always wanted, you can present to the seller and estate agent as a prepared applicant who is serious and reliable.

It shows you mean business, and gives them peace of mind that your financing will not fall through. Don’t be afraid to let the selling agent know you have conditional loan approval in place.

Sellers are most interested in completing their sale fuss-free and with steadfast funding, and showing that you are capable of both will help put you at the top of a potentially competitive list of applicants.

In the instance that you find and secure purchase of a home without having your loan pre-approved by a lender, there are a few pitfalls that you risk running into.

If you don’t have financing to pay for your property, you run the risk of forfeiting your initial 10 per cent non-refundable deposit you need to put down to secure the property. This may differ depending on what state you live in, but the point is it always pays to be organised and have pre-approval in place.

Saving home loan applications to the last minute also leaves less time to find the most suitable loan and have it approved ahead of settlement.

Arranging financing as an afterthought also adds immense pressure to the process of shopping around for the right loan and gathering the paperwork to prove you can service the loan.

The first step towards finding your new home is to sort out the finances. For further information about how we can help, give us a call on (02) 9614 0888 or enquire via our website.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post What Comes First: the Property or the Loan? appeared first on Sydney Financial Services - Aloha Loans.

Buying a property carries more costs than just the purchase price. In addition to moving costs, council rates, strata fees, renovations and furniture, homebuyers face additional fees to complete their property purchase.

Stamp duty

Stamp duty must be paid in order for mortgage documents to be legal. It’s essentially a tax levied by the state or territory government on the purchase value of the property or the market value, whichever is greater.

Legal costs

The legal transfer of ownership of the property will require a solicitor, conveyancer or settlement agent. He or she will perform property and title searches to ensure the seller is entitled to release the property, for instance, by checking the strata body corporate records.

Inspections

Pest and building inspections are an added cost, but they can save you from dealing with a major building problem after the purchase is complete. The amount is often dependent on the size of the property.

Agent fees

First-home buyers don’t have to worry about paying commission, since it is charged to the vendor of the property, most often as a percentage of the sale price. However if you’re selling your current home to buy another, you’ll probably have to take these fees into account.

Borrowing costs

Lenders have application, valuation and settlement or loan approval fees that vary depending on the lender. Finance Brokers are familiar with these fees and can help you take them into account when choosing a lender.

Insurance

Depending on your loan-to-valuation ratio (LVR) you may be required to take out lenders mortgage insurance (LMI). Read more about LMI here.

Although the borrower pays for it, LMI is not insurance for the borrower; it protects the lender should you default on the loan. You may also need building insurance if you are not purchasing a strata property.

If you are currently trying to obtain a property loan Aloha Loans has access to a wide range of lenders and experts in assisting first home buyers. For more information, please give us a call on (02) 9614 0888 or enquire via our website.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post The Added Cost of Purchasing Property appeared first on Sydney Financial Services - Aloha Loans.

Lenders Mortgage Insurance
How to Buy a Property Without a 20% Deposit

Read Our Article: Guaranteeing Your Child’s Loan

How to buy without a 20% deposit

When you consider that a small flat in Sydney could set you back half a million dollars at the moment, saving a 20% deposit to buy that flat ($100,000) can seem an insurmountable task. That’s where insurance can help.

Lenders mortgage insurance (LMI) may be an added expense, but it offers buyers the opportunity to dive into the property market earlier, without saving up an entire 20 per cent of the property’s purchase price as a deposit.

What is Lenders Mortgage Insurance (LMI)?

LMI protects the bank or lender, should a home loan go into default, guaranteeing that the lender will get its money back if the property needs to be sold and there is a shortfall in repayment of the loan.

While a 20% deposit generally provides a good buffer against any drops in property value over the life of a loan, LMI can also provide the same protection for lenders, meaning borrowers can purchase property with a smaller deposit.

What’s in it for you?

For the borrower, it may seem like Lenders mortgage Insurance is just another expense to cover. But insurance can mean that some buyers will be able to enter the property market with, for example, only a five per cent deposit saved. In the example above, a $500,000 property, this brings the deposit down from $100,000 to just $25,000.

And, if the market is hot and prices are rising rapidly, paying LMI so that you can buy now could be cheaper than taking the time to save a bigger deposit. In the time it takes to save a higher deposit amount, property prices may well have surged by more than cost of the insurance so, for some properties and purchasers, it can make good financial sense to purchase earlier even with the added cost of LMI, especially when you consider the rent that you may have to pay while you’re saving.

What you need to know

The insurance premium is generally a one-off payment, but you may be able to roll it into the loan amount so that you are paying for it month-by-month along with your mortgage.

There can be a big difference in the cost of LMI premiums if you have, for example, a 10 per cent deposit saved compared with a five per cent deposit, so it may well be worth trying to gather together some extra funds, even if you despair of reaching the full 20 per cent.

The mortgage specialists at Aloha Loans are experts in the industry and the credit markets. Investigating your options and working out whether to buy now or save a larger deposit is a decision that we can help you with.   Contact us on 02 9614 0888 or through our website.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post Lenders Mortgage Insurance: Buying Without a 20% Deposit appeared first on Sydney Financial Services - Aloha Loans.

Understand about being a guarantor on your child’s loan.

If you apply for a home loan, particularly if the loan is for more than 80 per cent of a property’s value, you’ll more than likely have to prove to lenders that you have a satisfactory amount of savings. This is to demonstrate your ability to funnel a portion of your income into repayments.

Although it can differ, in most cases lenders generally look for consistent additions to savings over a period of at least three months and preferably a year or more. This means that the following are not considered genuine savings:

• a cash gift
• an inheritance
• casino/other gambling winnings
• proceeds of the sale of a non-investment asset
• government grants and other finance offered as incentives

The great thing is you can still get a loan without genuine savings.

For those who don’t have any genuine savings but still want to obtain finance, there are options. These include:

• Guarantor loans – Having a guarantor on your loan may mean that no deposit is required, with the equity or asset the guarantor stakes standing in for a deposit.
• Other significant assets such as shares, managed funds and/or equity in residential property – Depending on your chosen lender, cash isn’t the only thing accepted as genuine savings. There are even situations where the sale of a vehicle can be considered as genuine savings if proved that it was owned for three months or more.
• A strong rental record may see a lender allow you to forgo the genuine savings route – Some lenders will waive the requirements if a letter can be produced from a licensed real estate agent confirming that rent has been paid on time and in full for the preceding 12 months, as it highlights your ability to make repayments on time and on an ongoing basis.

We can help you find a lender with politics to suit what you are trying to achieve. For further information, please gives us a call on (02) 9614 0888 or contact us via email.  

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Licensing statement: Credit Representative 488658 is authorised under Australian Credit Licence 389328.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post What counts as genuine savings in a loan application? appeared first on Sydney Financial Services - Aloha Loans.

Read our Article about using your parents as a guarantor on your loan

Paying off your education is no reason to put off buying property.

You can remember it now: sitting in a chair at the back of the lecture theatre, chatting to your friends and ignoring the debt that each day at university was plunging you into.

But now you’re older and wiser, and reality has set in. You want to buy a property, but you’re unsure how your student HECS or HELP debt could impact your ability to take out a loan.

When you apply for a home loan, you’ll need to reveal information about your liabilities, poor credit ratings and any other debts you have. This is where you need to start worrying about your student debt.

If you chose to defer any of your HECS/HELP payment, you don’t need to start paying it off until you’re earning an annual taxable income of $54,869 or more (As of the 2016-17, http://studyassist.gov.au/).

At this point your employer is required to hold a percentage of your taxable income and direct it towards your HECS/HELP loan. The percentage increases with your income but tops out at 8 per cent when you earn over $101,900 annually (http://studyassist.gov.au/).

Essentially, this decreases your net annual income.

Mortgage brokers at Aloha Loans are more than capable of dealing with the impact of student debt on a loan application.

By having the ability to compare several lenders at the one time, we are able to recommend a product suitable for the applicant’s individual needs.

During the initial contact with the applicant, the broker will complete a broker fact find, enabling a comprehensive financial analysis to be conducted. From there, guidance can be given on paying down or consolidating debt in order to reduce outgoings and increase borrowing capacity.

If you’re getting ready to buy a property for investment or to live in, there’s no need to hold out because you’re still paying for your education. To find out how we can help you secure a loan, give us a call on (02) 9614 0888 or contact us via email.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Licensing statement: Credit Representative 488658 is authorised under Australian Credit Licence 389328.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post How to Buy a House When you have a HECS or HELP Debt appeared first on Sydney Financial Services - Aloha Loans.

How we at Aloha Loans take you through the loan process.

The Home Loan Approval Process

Following the lodgement of a home loan application, hopeful borrowers are often keen to know what will happen next and how long it will take for them to receive the verdict. The bad news is that there is no one-size-fits-all answer. The good news, however, is that a solid application is the key to keeping the loan approval time short.

The amount of time it takes for you to receive a response to your home loan application can vary. An answer is usually received between two days to two weeks, depending on a range of factors. For a reasonably straightforward application, it takes 48 hours for a final approval. However, depending on how complex the circumstances are, it can take longer.

Before offering conditional approval, your potential lender will need to make an assessment of your application and conduct a valuation of the property. Of course, having a valuation that is acceptable to the lender done in advance will expedite the process.

With valuations, the intention is to support an application rather than to make or break it.

There are a few things that can result in an application not being approved based on valuation, like zoning, property size, or if the condition of the property is poor enough that major repairs would be required before it could realise its market value.

The lender will also assess your capacity to repay the loan amount you have requested. This is where all of the information about your salary and liabilities come into consideration, and where accurate and complete information is essential.

The credit review by the lender can include a bit of to-and-fro between the customer, the broker and the lender due to the lender’s request for further information as that credit review takes place.

Your potential lender makes an overall judgement of you as a borrower and the complexity of your financial history will affect how long this takes.

It is best to be full and frank in disclosure from a borrower’s perspective. The biggest red flag is non-disclosure of liabilities or adverse information on a credit history, whether it is included in documentation or not.

The complexity of the application process is a great reason why you would sit down with a reputable broker, as they can just explain all of that to you.

Following the submission of an application, you can expect your finance broker to be in touch with you to update you on progress, and to notify you of the outcome. If your application is approved, your broker will also advise you of when to expect a formal letter of approval from your lender.

Speak to us about how we can simplify the home loan application and approval process, and create the strongest application for you.  For further information, please gives us a call on (02) 9614 0888 or contact us via email.

Don’t forget about or Cash Draw Give Away! Contact us today and have us assess your eligibility for buying your new dream property

Licensing statement: Credit Representative 488658 is authorised under Australian Credit Licence 389328.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post Understanding The Home Loan Approval Process appeared first on Sydney Financial Services - Aloha Loans.

Tip #1: Never enter a negotiation empty-handed

Whether it’s hiring inspectors for a building and pest reports, or obtaining quotes from tradespeople, obtaining facts and figures will give you ammunition when requesting a price reduction.

Even if it does cost you extra, it’s worthwhile getting all the right information before making your offer.

Tip #2: Separate your emotions

The most tactful way to negotiate is to eliminate all emotions. It’s important to separate yourself from the outcome and present your side logically. The owner is under no obligation to accept what you offer, but if you remain positive this will position your argument in a favorable light.

Tip #3: Remember this is someone else’s house

Negotiation is a two-way street, so in order to come to an agreement, concessions will have to be made on both sides. It’s important to understand what’s important to the owner and what you can offer to counteract the price reduction you are after. It just takes a little enticement, such as a longer settlement period so they can find a new home for example, that can be valuable.

Tip #4: If you don’t ask, the answer is always going to be no

If you need certain fixtures included in the sale price, extra inspection requests and any other needs along those lines, you will not know what the owners are happy to provide unless you voice your desires. It’s all about thinking what’s important to you as realistically, the owners are unlikely to accommodate for everything on your list of requests.

A house that requires a bit of repair work is a great bargaining tool and generally an opportunity to secure a good price. Let us help you get closer to securing your ideal home by calling us on (02) 9614 0888 or Email Us.

Licensing statement: Credit Representative 488658 is authorised under Australian Credit Licence 389328.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post The Right Property at an Affordable Price – It’s Not a Myth appeared first on Sydney Financial Services - Aloha Loans.