Frequently Asked Questions
No.1 Why use a mortgage planner when I can go to the banks directly?
No.2 How do I know if the loan been recommended is suitable?
- More options; we give you access to more lenders, as if the bank will tell you the other bank down the road is cheaper.
- Free of charge; we do not charge our client for our service, if we do, we will let you know before we start our service.
- We do the hardwork; did you know that a loan sometimes could take up to 6 months to settle? do you remember how long you waited last time on the phone before you can speak with someone? our broker will track the loan status for you.
- Expertise and experience; our mortgage planners are very knowledgable about which lenders can meet your borrowing needs and objectives.
There are some mortgage brokers would recommened loans that do not meet client's needs but try to maximise their incentives, which gave the rest of us in the industry a bad reputation.
We often recommend serveral loans for clients to decide which to go for. In fact, as a holder of an Australian Credit License, it is against the law for us to assist you in applying an unsuitable loan.
No.3 Are you a licensed business?
Yes we are, we hold an Australian Credit License (ACL) for more than 10 years.
We are also a member of Mortgage and Finance Association of Australia (MFAA) and Credit Ombudsman Service Limited (COSL).
We regularly participate in training, education and seminar to meet government regulation and compliance.
No. 4 Who are your lenders?
We have access to a wide range of lenders, ranging from
No. 5 Why your business loan was rejected?
- Major banks such as Westpac, CBA, ANZ, who give client confidence through their brand name.
- Smaller banks such as ME bank, Bank of China, Heritage Bank, Australian Military Bank, who provide more personal service for customers. For example, if you serve in the military or in reserve army, you may eligible for DOHAS loan, Australian Military Bank can help you.
- Non Bank lenders such as ResiMac, Pepper, Liberty, they have a much more flexible lending guideline to help borrower that could not obtain a loan in banking channel.
- Private lenders, we also help clients to seek funding from private lenders. For example, owner has a big land and recently has changed zoning, they would like to borrow money to build several houses and become property developer.
Due to the risks involved, strict guidelines are imposed on business finance, so securing approval can be difficult. Here are a few mistakes to avoid to increase your chances of approval.
No. 6 Can I borrow against the asset I own?
- Not knowing your credit score
Many consumers may not realise the importance of a credit score. Not only is it taken as a reflection of your ability to make repayments, it also highlights your financial history which is why understanding what it is and how it can be improved can be vital.
- Lack of planning
Understanding the assessment criteria and having a well-prepared application increase your chances of approval. The key things to be aware of when it comes to your application are a healthy debt to income ratio, existing business assets and a justified cash flow position, the broker explains. “This ensures that the lender has a full picture of what has happened and what the future forecasts are.”
Aside from providing these financial statements and forecasts, be prepared to discuss the purpose of the finance and how the business will service the loan. “Business owners need to articulate how they are going to use the capital and demonstrate how repayments will be made.”
- Poor strategy
Longevity in a business is what lenders want to see and, in order to showcase that, a good strategy supported by financial statements must be in place, and those statements should be geared towards demonstrating strong earnings. “Many businesses are focused on minimising taxes and not maximising earnings,” advises the broker. “While there are tax advantages, not managing your business in order to demonstrate maximised earnings can have a negative impact when it comes to applying for a loan.”
- Not having the right advice
Surrounding your self with industry experts can provide you with a solid understanding of what needs to be included in your application, and a good equipment and commercial finance broker can match you with the right loan product. “A good broker understands that running a business can often leave you with little time, so ensuring you have someone qualified and trustworthy to do the legwork can be the difference between a success or decline,” says the broker.
Most of the time the answer would be No. Lenders love to see serviceability, which will calculate how much net income you have after living expense to repay the loan interest. Therefore how much you could borrow is also depend on your net income, not simply by the asset value.
No.7 What are the common required supporting documents?
The common required documents includes:
- 100% identification completed (e.g. Driver licence, passport )
- Proof of rental income: Current tenancy agreement, or current rental statement from real estate agent for existing investment property, or a rental appraisal from real estate agent for new purchase
- Most recent statement of all existing liabilities, such as home loan, personal/car loan, credit card, etc.
If you are a PAYG applicant, you are required to provide:
- Two most recent consecutive payslips
- Latest group certificate (Some lenders)
If you are a Self employed applicant, personal and partnerships, you are required to provide
- Tax returns from the past two years and most recent year’s Tax Assessment Notice
If you are a Self employed applicant, company, in addition to personal tax returns and assessment, you are required to provide
- Company tax returns, Balance sheets and P&L statements from the past two years
Besides these, the following documents are also needed based on different purposes of financing—purchase or refinance:
- Proof of funds
- Copy of contract of sales
- Most recent council rate notices for existing property
- Home loans statements for the past 6 months
And it is important to note that you may be asked to provide other documents according to different situations.
No.8 How much can I borrow?
This will depend on your financial circumstances, and also the specific lending policies of a lender.
No.9 What is my monthly repayment?
There are numerous factors that determines how much you need to repay. These includes: the loan amount, the interest rate and the loan term. Click here to try the repayment calculator
No.10 What if I am not so certain what to do?
You are always welcomed to consult our professional & friendly team of brokers.