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Finance - Mortgages Made Easy
EBS Financial Services sources loans form a wide cross-section of well-known lenders, including the major banks.
We specialize in sourcing a mortgage that suits your personal needs.
How do we do this?
- We access lenders who are providing the best interest rates
- We access lenders that can provide the loan features you want, and with the lowest fees and charges
- Our goal is to locate the best loan for you.
For free assistance with your loan, contact us now.
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Home Buying- Owner/Occupiers
Three important questions that need to be answered before the search begins for a home, or an investment property of your choice.
1. Loan security ratio:
The amount of money that a lender will make available to you against the value of the property.
Most lenders will lend up to 95% of purchase price for an owner-occupier. However, each application is judged on its merits. Applicants need to show evidence of savings for deposit and costs including “first home owners grant”Investment properties WHERE? Click Here
Loans against investment security vary from lender to lender. Generally if you can apply the 90% rule against the value of your own property and 80% against an investment property you will get very close to an amount that you could borrow against your property and any new property.
Shortfall needs to be provided by you from your own resources.2. Serviceability Factor HOW MUCH CAN I BORROW?
The most important equation that needs to be answered satisfactorily before any lender will approve a loan.
Under the NSW Credit Act, lenders are obligated to ensure that after all commitments have been serviced, i.e. loan payments known credit card payments etc, there are sufficient funds left over on a per annum basis to provide general living expenses. Again lenders have different standards but generally speaking if you have $20,000 for a couple and say $15,000 for a single person left over after loan payments are calculated then you would satisfy the serviceability factor. Allowances also need to be made for children generally about $1800 per annum.
If you earn less than say $40,000 per annum then lenders generally would not approve any loans that would obligate your income to more than 35% committed of gross income.Investment Property WHERE? CLICK HERE!
Generally, lenders will take into account 80% of expected rent receipts when assessing the income factor. Some will also take into account depreciation factors, if the source is considered reliable. You can assess your own serviceability.
View loan calculator and interest rate trend.
3. Employment/ Income
Evidence of income needs to be available. If self employed, generally two years taxation returns are required. As an employee generally twelve months, however allowances are made for job change etc.
One of the most common pitfalls is an applicant who is seeking a property loan and has just started a new business as a self-employed person. Most lenders will decline until the two year period has passed.Owner / Occupier.
When looking for a home to live in you need to assess how much you can borrow before you “find that house” and become unnecessarily excited and then possibly disappointed.
Always assess costs of purchase, stamp duty/ legal and allow for your eligibility for the first homeowners grant.
When you have assessed the above then you start looking!
At EBS Financial Services we can help. Contact us if you have any questionsMoney first house second.
Investors.
Unless incomes are high, say in excess of $70k per annum, if mortgage insurance is required to assist with a purchase in most cases, it is better to wait and further reduce that home loan.
Investors need to satisfy the “Loan security ratio” if borrowing 100% including costs of purchase.
For your loan application CLICK HERE
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There is a great variety of loans out there in the market place. We at EBS Financial Services can shorten the time you need to take to find the right one for your needs. From Personal Loans, Credit cards, Business loans, Home loans and Investment Loans.
What is a line of credit?
It is a loan secured against your property. This loan allows you to redraw to the prearranged credit limit, as you need.
This is useful for property investors who can use one loan to buy and sell property eliminating the need to apply for additional home loans.
Interest is provided on at least a monthly basis.
A General rule is that the balance can be reduced by additional deposits in excess of interest provisions and funds redrawn up to the agreed limit value at your convenience.
This type of loan is very popular with investors.What is a redraw facility?
As described above under line of credit, a redraw facility allows you to redraw extra money that has been paid into the loan through extra repayments or lump sum. This is a great way to help save as the extra money paid into the loan helps in the reduction of the interest until it is redrawn.
Should I go for the discount variable rate for the first year?
Usually taken by first home buyers to help them get started. Often they mean higher interest rates when the discount period is over, and often involve extra charges if you try and change the loan later on.
Fixed or Variable Rate
With a fixed rate, your repayments will remain the same for the period that the loan is fixed for, regardless of whether the Reserve Bank reduces or increases the interest rates. This is beneficial for budgeting as the repayments stay the same. However, often you are unable to make additional payments to help reduce your loan sooner. Variable rates are subject to the increases or decreases of interest rates implemented by the Reserve bank. This particular rate allows you to make additional payments to help the repayment of your loan sooner.
What size deposit do I require?
The larger the deposits the better off you are, but the recommendation is at least 20% of the value of the loan you require. Especially if you are trying to borrow more than 80% of the value of a property as the lenders generally take out mortgage insurance.
What is Mortgage insurance?
This covers the difference between the sale of the home and the loan debt. Mortgage insurance protects the lender not you and can be an indirect cost to you.
The above is general information, but EBS Financial Services can obtain loans up to 90% of the value without mortgage insurance.
What is a 100% offset Loan?
This type of loan allows you to deposit all your income into the loan, which reduces the interest you would pay and you access the loan to pay for your living expenses. The best way to have this loan work for you is the longer you leave the money in the account without drawing on it the less interest you pay. Reduction of loan principal is accelerated. A disadvantage is that many lenders charge additional fees.
Do you have any questions about home loans?
If so, send them to us and we'll get right back to you with the answer.
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Loans that look after themselves.
Buying an investment property and assessing the loan payments and ownership costs rates etc, against rental income and taking out a loan to a level where it is self-serving. This means that the investor would have cash to contribute, although in some cases outside the Sydney Metro area, this can be achieved without a great amount of cash because of property prices and rental income-the rent pays off the loan.
Many investors strive to reduce their initial investment loan to a level where rental income services the loan and all ownership commitments. When you reach this stage, it is then time to buy another investment property (not that it wasn’t before) it presents an opportunity to consider buying.
Having your investment property valued after a period of ownership in approximately two years, can often provide an opportunity to increase your loan to enable the purchase of another property.
For information in investment property click here.
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The benefits of a Portable loan
When you sell your property the current loan may be taken to the next property. This eliminates establishment fees and other costs, which are usually present when purchasing a new property.
These loans benefit those who will not be staying in their new home for good.Back to top | Home | Contact Us
Warning:
Do not be misled into thinking there is some magic way that you can pay off your home loan in record time. Reports on some current affair shows are grossly misleading. Yes, with some lenders you can apply to have all your income into your home loan account together with rental income from your investment property and allow the investment loan to grow bigger.
BUT all this does is create a bigger taxation deduction for you, which is fine. However, keep in mind that your home loan may be disappearing quickly but the lender still has a mortgage over it to secure the investment property loan.Example
Now you can apply total reductions to your investment property loan i.e. $3,461 per month.Advantages are that additional taxation deductions can be accessed due to the greater amount of interest being paid on the investment loan.
Discuss with your accountant and or Financial Adviser before making your decision.
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Credit Ratings
Can I get a loan if I have bad credit?
No loan application proceeds without a credit check, it is of the upmost importance to maintain a clean credit record and be very honest with previous loan information when applying for a loan.
However, there are facilities available for loan applications that are unable to satisfy credit check requirements.Loan defaults and non-payments can remain on an individuals record for up to 7 years and so affect their future borrowing capacity.
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