What is the maximum amount I can borrow?
Each bank calculates your maximum borrowing capacity differently using their own serviceability calculators. We run your figures through the calculators and determine the amounts each bank is willing to lend you. We also suggest ways to increase your borrowing capacity. In general, the higher your income and the lower your other liabilities are, the more you can borrow.
Should I get a fixed or variable rate loan?
It depends on your circumstances and your outlook as well as the market/economy at the time. Fixed rates are usually a little higher than variable rates so you have to weigh up the alternatives and compare the cost of each option. You would also need to consider the requirement you have for certainty in your repayments, what you believe rates will do in the future, and the question of how long to fix for. Fixed rates have the benefit of giving you peace of mind on what you repayments will be over the term you fix. You also have the option to split the loan and take some fixed and some variable.
Fixed rates though do have a number of disadvantages. These include:
- There may be significant break costs if you have to break the fixed rate period before its expiry date for any reason, such as you decide to refinance or sell the security property.
- The fixed rate is usually set at time of settlement – not at the time the rate is quoted to you at the research or approval stage. You can however “lock in” the fixed rate at the time of application. This is similar to insurance and as such there is usually a charge, often 0.15% of the loan amount.
Can I pay extra off my loan?
As long as it’s a variable rate loan, virtually all banks allow you to pay off as much as you like in extra repayments. With fixed rate loans the situation varies between banks. Splitting your loan to half variable and half fixed overcomes the problem if you want pay extra and still have the security of a fixed rate loan.
What is an offset Account and how does it work?
An offset account is a savings account linked to the mortgage. It has its own separate account number to the mortgage and is fully transactional like any normal savings account. When it’s time to calculate the interest due on your mortgage for the month, the amount in the savings account is deducted from the balance of the loan. So if your mortgage balance is $300,000 and there is $100,000 in the offset savings account, you’ll pay mortgage interest on $200,000, not the mortgage balance of $300,000. This then reduces the interest you have to pay on the loan for that month and for the time the funds are in the offset savings account.
What is mortgage insurance and do I have to pay it?
Mortgage insurance covers the bank in case you default on your loan repayments. It does not cover you – the borrower. As a general rule, the banks require you to pay for this if the loan amount is greater than 80% of the purchase price. The only way to avoid it is to borrow less than 80% or provide additional real estate security to bring the loan to value ratio (LVR) to below 80%.
Can I redraw excess funds from the loan?
Yes, many loans come with redraw, it depends on the actual loan. Most variable rate loans have this facility and the cost is often free if you use internet banking. Some lenders have a minimum amount you must redraw at a time.
What are the ongoing fees associated with the loan?
It depends on the loan and how you structure your accounts. For example if you opt for a Professional Package type loan, you can expect to pay around $400pa with benefits of discounts on the standard variable rate and other advantages. Basic loans have little or no ongoing fees. They are usually less flexible and are more of a ‘no frills’ type of loan.
Should I go for a honeymoon rate loan?
Honeymoon rate loans can be good for those people in a situation who want as low a rate as possible in the early days of their loan – usually the first 12 months. These loans aren’t as popular as they used to be, although a few lenders offer are much lower rate for the first 3 years of a loan, which then increases to more than the discount variable, so it would depend on your circumstances whether this would be beneficial. One thing to be aware of is the fee if you decide to ‘switch’ to another product after the honeymoon rate.
Are there additional benefits, other than the interest rate, that l should consider when choosing my loan?
Yes most definitely! The interest rate is important, however there are many other facets to a loan that should not be overlooked. Making sure you get the right loan with the right structure is paramount. We often help clients out of loans that have been set up incorrectly or are just confusing and costly with features that are not used or necessary. Features and benefits of a loan are just as important and understanding these and how they can work for you is something that shouldn’t be left to chance.
Some of the additional features of a loan that may or may not suit you include: Parental and holiday leave, direct salary crediting, offset capability, redraw facilities, loan portability, card auto sweep, interest in advance, paying at different intervals, i.e. weekly/fortnightly and of course the products other associated fees and charges. Many of these features alone can save you thousands of dollars over the life of the loan depending on how you set it up and make it work for you.
Altitude Finance helps you sort through this information and narrow it down based on what’s important to you and suits your needs.
How much does Altitude Finance charge for arranging a loan?
Our fees vary from $220-$595 depending on how complex your loan is. This fee is charged once you decided to engage our services. As a member of Connective Aggregation Services the group refer large volumes of loans to different lenders and commissions are paid from these lenders based on this volume. The end result is that you end up with the same loan as if you went to the bank directly and in some cases a better deal. However, we work with you to provide a thorough plan for your present and future objectives and ensure we provide you with the most favourable solution to meet your requirements. You gain from our extension knowledge of loans as well as property and advice on the best way to structure your loan which often gets overlooked.
What do you do & how does it benefit me?
We are an independent intermediary between lenders and you as the borrower to source the most suitable finance arrangement based on your individual circumstances. We create solutions, solve problems and add VALUE to clients & to lenders. As such we are remunerated by our lenders for introducing, looking after and managing their customers. Mortgage Brokers and Advisors are a very valuable service, especially in the current environment where there is a lot of confusion around lending and product differentiation.
The Risk appetite for lending has dramatically changed in the last 12 months and our job is to keep informed, not only where to place your loan but how each lender is going to assess it and what they need to know in order to approve it. Each lender have their own preferred borrower profile and appetite for different securities, so it’s our job to know this and keep up to date so when we meet with a client we know who to talk to in order to match the client with the right lender.
There is a lot of leg-work that goes on in the background to ensure your loan process goes as smoothly as possible. There is a vast array of different service providers that we need to liaise with to bring it all together from the Agent, Solicitor, Valuer, Lender, Lenders Solicitor, Property Manager etc. This saves you a huge amount of time and cost in using our services. For further information see Why Choose Us.
How long have you been in the industry?
Do you have a strategy for the current interest rate outlook?
Yes, depending on the timeline. By the time you are reading this it will have changed. Part of our role is keeping abreast of market changes and discussing the options of both fixed and variable rates, subject to your plans, your preference and where the interest rates are heading.
Do you have a mortgage?
Yes, several. Our partners actively invest in property and regularly attend property market updates and educational forums to keep up to date of current trends.
What can you provide that other brokers and lenders can’t?
Firstly we are independent of any lender. What this means is that we give our clients choice and advice with the right mix of product, lender and structure. If you walk into any bank, they can only sell their suite of products which may not suit your profile, property and or requirements. You must also carefully assess who you choose to take advice from. Always seek to take advice from someone who has direct experience and first-hand knowledge.
Most brokers have access to the same lenders, however it comes down to the ability to source a solution. We are hands-on giving our clients our first-hand knowledge and experience of property and finance. We actively invest in property and have a good working knowledge of the industry and take a genuine interest in the client and often source solutions where others fail.
How do I know you’re going to look after my best interests?
Because the outcome we obtain for you is a direct reflection on us and our business. Our ability to provide the best solution is what we are interested in. We don’t charge by the hour or limit our time with our clients. We work with you until we have a solution that you are happy with. Besides, we want you to come back and tell all your friends!
What happens if the lender makes a mistake with my loan?
This can, and does happen from time to time. We work with the lender and you to resolve any issues that may come up. This takes a lot of stress off you to know you have someone looking after things. We often have several channels in the Bank or lending institution that we can escalate things with if necessary. This is not available to individual customers who are often fobbed off when they ring up and are left in a confused and frustrated state.
Do you have any testimonials?
Do you specialize in any particular type of client and why?
Yes, predominately property investors including clients wanting to learn how to invest in property and not sure where to start. And anyone buying a home or already has a mortgage and are not sure if their current loan/s are working for them.