Bankruptcy can stay on your credit file for up to seven years, but this doesn’t have to stop you from getting a home loan

Bankruptcy can happen for many reasons, many of which might not be your fault.

Unfortunately, your credit file doesn’t list the reasons behind your bankruptcy, meaning you could find it very difficult to get any sort of home loan even once you’re discharged.

Because these listings stay on your credit file for seven years, this can put your dreams of owning a home on hold.

Luckily, there are now a range of specialist lenders willing to offer home loans, some of which will consider borrowers who have been discharged from bankruptcy for as little as one day. While these can come with higher rates and fees, they’re an option to help you get into a home or refinance an existing loan without having to wait so long.

Discharged bankrupt? Don’t apply for another home loan until you’ve spoken to us on 1300 855 244

The number of young first home buyers entering the property market is nosediving, an online property agency has warned.

According to them the number of first home buyers aged 25-35 years fell from 55% of the sector at the end of the 2015 fiscal year to 40% by 30 June 2016.

Using a mortgage broker to help you choose a home loan can save you considerable time and could result in huge savings. However, before you decide on a broker, you need to make sure they’re going to meet your needs.

Knowing the right questions to ask a mortgage broker makes that much easier. Below are ten questions to ask your mortgage broker at your first meeting, along with the kind of answer a good broker should give.

1. How long have you been a mortgage broker?

Knowing your broker is experienced and has a solid track record can make you more comfortable with your decision. This question tells you how long they’ve been broking and what sort of lending they’re involved in. Also ask for client testimonials or reviews.

Answer to expect: a clear number of years, the types of loans they handle most often and examples of clients in situations like yours.

2. Are you licensed and a member of an industry body?

It’s important to check a broker’s qualifications and credentials. Brokers must complete at least a Certificate IV in Finance and Mortgage Broking and either hold an Australian Credit Licence or be authorised under a licensed aggregator or lender. They should also belong to the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).

Answer to expect: their licence or credit representative number and the industry body they belong to, without hesitation.

3. How many lenders do you have access to?

The broker you choose should be able to offer loans from a large number of Australian lenders. Ask how many they work with and whether they can provide a full list.

Answer to expect: a specific number, a mix of major banks and smaller lenders, and a willingness to share their panel.

4. How do you determine the best lender?

Your broker’s primary job is to source the right home loan for your specific needs. A low interest rate is key, but a broker should also assess your requirements, present a number of product options and show how they compared them.

Answer to expect: a shortlist of two or three loans, with reasons each one suits you.

5. What fees and commissions are you entitled to?

This question may seem blunt, but brokers earn income from every loan they arrange, so it’s good to understand how they’re paid and how that may affect you. Your broker must disclose all payments and commissions they receive.

Answer to expect: a plain explanation of upfront and trail commissions, plus any fees you might pay, set out in a credit guide.

6. How much can I borrow?

A broker should give you an idea of how much you can borrow based on your deposit, income, assets and liabilities. This helps you understand what type of property you can afford.

Answer to expect: a realistic range, not just the maximum a lender might approve, and what your repayments would look like.

7. What grants or schemes am I eligible for?

First home buyers may be entitled to government grants, stamp duty concessions and low-deposit schemes. Your broker should know what’s available in your state or territory and help with the paperwork.

Answer to expect: the specific schemes you qualify for and how they affect your deposit.

8. What’s the best loan structure for me?

A good broker should advise on which loan structure makes the most sense for you. Ask whether a variable rate is best, or a split loan with variable and fixed portions. Also ask whether it includes an offset account or redraw facility, and whether you should pay principal and interest, or interest only.

Answer to expect: a recommendation tied to your goals, such as paying the loan off faster or keeping repayments flexible.

9. What are the next steps?

Ask about the process for getting your application underway, including the information and documents you need to provide. A good broker should be able to give you a checklist.

Answer to expect: a written document checklist and a clear outline of each stage.

10. How long will it take?

This determines how quickly you can start shopping around. Ask your broker to estimate when you should get pre-approval and how long full approval and settlement should take.

Answer to expect: an honest timeframe for pre-approval and settlement, plus what could cause delays.

Questions to ask based on your situation

Ready to dive deeper?

Frequently asked questions

What should I ask a mortgage broker at the first meeting?

If you’re unsure what to ask a mortgage broker, start with their experience, licence, lender panel and how they’re paid. Then move on to how much you can borrow and the next steps. For more on judging a broker’s answers, see our guide on how to choose a mortgage broker.

Are there specific questions to ask a mortgage broker in Australia?

Yes. The best questions to ask a mortgage broker in Australia reflect local rules. Brokers here are legally required to act in your best interests, so ask how they meet that duty. It’s also worth asking whether they’re a member of the Australian Financial Complaints Authority (AFCA), which handles disputes.

Does it cost anything to meet a broker?

Most brokers, including our finance broker Gold Coast team, offer an initial consultation at no cost, because they’re paid by the lender when your loan settles. Still, confirm any fees upfront so there are no surprises.

Should I choose a local broker?

Plenty of brokers work online, but a local broker understands the area’s property market and can meet you face to face. If you’re buying in South East Queensland, for example, a home loan broker Gold Coast residents can visit in person may know which lenders are comfortable with certain suburbs or property types.

Should I bring documents to the first meeting?

It helps to bring recent payslips, bank statements and details of any debts. Your broker can then give you a more accurate idea of your borrowing capacity from the start.

A home loan is generally a long-term proposition, but in some situations it can make sense to refinance your mortgage. Read this guide to the refinancing process, and speak to your broker, before deciding whether it’s right for you.

Refinancing involves taking out a new mortgage and using those funds to pay off your existing mortgage. Doing so can save money and result in significant financial gains over time.

First home buyers have been cautioned against postponing the purchase of property based on “unfounded predictions” that house prices are about to drop.

First home buyers are mistaken in thinking it is wise to delay entering the housing market in the hope that prices will soon fall.

Buying a property isn’t always a straightforward process, and one area that can cause confusion is the question of who is responsible for insuring it between the signing of the contract and settlement.

There are differences in regulations between states, but the basics are as follows…

• First, it’s important to clarify whether the property is at the buyer’s risk or the vendor’s.

• Generally speaking, the property only passes to the purchaser on settlement, and the vendor is responsible for passing the property to the purchaser in the same condition it was in at the time of contract exchange. If the purchaser takes early possession of the property, they take on the risk for the property from the day they take possession.
• As the purchaser, it’s important to seek legal advice on whether to get the property insured before settlement. This may be required in case substantial damage occurs to the property during the period before settlement.

Example: Standard Clause in Queensland Contracts

General tips

When it comes to property insurance, there can be some grey areas, but it’s important to understand your general obligations.

The best Option = if both parties are insured throughout the entire process, it saves the headache should anything go wrong.

As the vendor, if there’s substantial damage to the property but the purchaser still wants to go ahead with the sale, you may need to consider a negotiation on price, or you may need to fix the damage before settlement. If you’re still insured, your insurance policy will cover the work needed.

For purchasers, if there’s substantial damage, you have the option to negotiate a price reduction or alternatively get out of the contract.

Importantly, it’s the vendor’s obligation to leave the property in the same condition it was in when contracts were signed, regardless of who holds risk over the property.

This is a complex area that can be hard to navigate without support, so it’s a good idea to talk to us as your mortgage broker to gain a clearer understanding of how best to proceed and protect yourself. we can also help you put in place a cover note and/or an appropriate Insurance poilcy for the property.

For detailed advice about property insurance in your State, contact an experienced property lawyer.

The home loan market is constantly changing, with new and attractive deals coming up all the time. Refinancing can help you secure a more competitive interest rate, access the equity in your home, add features (such as an offset account) or consolidate your debts, but there are some important questions to consider before you get the ball rolling.

1.Has my financial situation changed since I first applied for a home loan?

A refinance is effectively a brand new loan application. All of the personal financial data you had to gather the first time around will need to be produced again. The stability of your income stream, your assets, and your credit card debts and other debts and expenses will all be reviewed, and may impact the result of your application.

It’s important to think about your ongoing ability to pay off your loan, particularly if you’re planning on making big changes that will affect your financial situation, such as starting a family or quitting your job to start your own business.

Of course, if you’ve just received a big pay rise or are now an empty-nester, this may also make a difference to your loan application.

2.Will the refinance really save me money?

Negotiating a lower interest rate or consolidating debts may seem like a financial no-brainer, but the fees associated with switching loans can be hefty, so you need to look at all the costs to work out whether you will really be saving money.

Fixed rate loans can be particularly expensive to exit, and leaving your home loan early will usually see you pay some combination of exit fees, application fees, stamp duty or even legal fees. If you’re borrowing more than 80% of the value of your property, lenders mortgage insurance (LMI) may also be required.

Unfortunately, these fees and costs are not usually transferable from one loan to another, so you may need to pay them again even if you paid them when you took out your original loan.

3.Am I planning on keeping the property for much longer?

If you plan to sell your property within the next few years, refinancing might be a rather big investment of time and energy for little benefit. Similarly, if you only have a small amount left to pay off your loan, you may want to consider whether it’s really worth going through the process of refinancing for the marginal cost savings you may receive.

Refinancing can help you save some money, but it’s worth considering your plans and options before you decide to go ahead with it. If you need some support working out what’s best for you, contact us.

So, you’re looking for a home loan. Fantastic! The only trouble is, the term ‘home loan’ can refer to a number of different products- fixed, variable, construction, and so on. It’s great that we have ample choice when it comes to our mortgage, but what exactly is the difference?!

To help you understand, we have provided an A-Z listing of the most common loan types, along with a brief explanation of each!

Interest rates will almost certainly go down further. The good news is home loans are getting cheaper – the bad news is prices in some areas are going up. And, of course, as happens every few years, there are voices coming from everywhere telling us young people can’t afford a home any more.

Guess what? nothing has changed that much. Buying your first home has never been easy, but it is certainly still very possible.

First, get rid of the idea that home ownership is restricted to high-income-earners. Right now across Australia there are people who are doing it tough and there are people whose finances are in good shape. Did you know? Their financial position has got nothing to do with their income – it’s how they manage their money.

Managing your money gets back to choices. You can choose to take your lunch to work or buy it; you can choose to buy a new car or make do with your old one; you can choose to spend $35,000 on a wedding or $35,000 on a house deposit.

I am not going to go into a long list of money-saving strategies here – there are hundreds of websites and books that can do that. But it is important to stress that it is the choices you make, not your income, that will determine how well off you are financially.

If you decide to divert some of your income to savings and investments, your net worth will grow. If you decide to spend it all on consumption, you will be forever battling the debt treadmill.

Once you have got your finances under control, the next step is to set yourself the goal of buying a home. If you are not strongly motivated, there are ways to build your desire to do this, in particular, thinking about what will happen if you choose one action over another.

If you decide to rent, all your life you will be at the mercy of the landlord – if you decide to buy a home you will be acquiring an asset that will grow over time and, when paid off, will give you free rent for the rest of your life.

You can also consider the unique benefits of home ownership. Australia’s population is predicted to increase by more than 10 million people in the next 20 years, which will create a strong demand for well-located properties. Given that scenario, it is hard to see anybody losing money over the long term if they buy a well-located property.

Once you have your finances under control, and have convinced yourself home ownership is a worthy goal, you need to set a specific plan to make that goal a reality.

The secret is to focus so hard on the goal that everything else becomes immaterial. Start by looking at homes where you would like to buy, and then hang photos of them on the wall where you will see them every day. Talk to us to find out how much deposit you will need, and then make a sub-goal to save that within a specified time. We can help with setting your plan and/or refer you to a finanicial planning specialist that does just that.

As an example, If you were a couple each earning $850 a week after tax, you could decide to live on one income and bank the other $850 a week into a savings account. In just twelve months you would have $45,000, which would be an ample deposit for most properties.

As your savings grow the success pattern you are forming will be reinforced.

Mark my words – you’ll be more than adequately rewarded for your persistence

So get started today! Send us an enquiry and we will help you get into your first home and beyond