Mortgage Broker Update

June 2013

Callum Scott ph 0413 580 735

Credit Rep No 437438

Why use a mortgage broker?

Because we can save you time and money. As the Home Loan market becomes increasingly complex, more people are turning to

mortgage brokers. The quickest way to understand the lending and property market conditions and the most appropriate loan for you is through talking to a mortgage broker.

Here are some other reasons: We can save time We give you choice We can help find the right loan We take the fuss out of setting up a mortgage We can help you avoid pitfalls

...why go direct to a bank when you can have a choice of lender through a finance broker?

The lowest cash rate in recent memory...

Steps to

buying a

home...

Which loan is right for me?

• Fixed Rate (Principal and Interest) Fixed rate loans are priced according to a pre-

determined interest rate and therefore have fixed loan repayments. The time period of these loans can vary, but you can usually ‘lock in’ your repayments for between one and five years. When the fixed term expires, you can decide whether to fix the loan again for another period of time at the current market rates or convert the loan to a variable interest rate.

• Variable (Principal and Interest) The rate charged on variable loans moves up or down in

accordance with interest rates. A basic variable has fewer features and flexibility than a standard variable, which may typically offer low introductory rates and the ability to make additional payments (redraw).

• Split Rate (Principal and Interest) You can divide split rate loans between fixed and variable

interest rates, selecting yourself how much to allocate to each. • Interest-Only You repay interest only on the loan principal for a period of

between one and five years. At the end of this period, you revert to making both principal and interest repayments.

• Line of Credit A line of credit allows you to access additional funds by

drawing on the equity value of your home. After fixing a limit on how much you can borrow, you direct income from all sources into your loan account and then draw down funds as required.

Which loan is right for me?

What are others doing?

DEFINITIONS 1. Standard Variable: includes the full range of features available. 2. Basic Variable: without some features, lower fees and rates. 3. Intro: also known as ‘honeymoon’ where the borrower is offered a very cheap initial rate (fixed or variable) before the loan reverts to a Standard Variable. 4. Fixed: interest rate is fixed for a nominated period before it reverts to a Standard Variable. 5. Equity: also known as ‘line of credit’ allows the borrower to draw out money up to a specified limit. Generally more expensive than Standard Variable loans.

Source: AFG Home Loan Index June 2013

Things to avoid, and where a broker

can help...

• Ignoring the extra and hidden costs

• Getting independent inspections and advice

• Going beyond your budget

• Not having the right protection clauses in your contract of sale (use a solicitor)

• Not having pre-approval for finance at auction

• Incorrectly setting up an SMSF property purchase

Month in Review – May 2013 Source: Herron Todd White Property Valuers

Month in Review – May 2013 Source: Herron Todd White Property Valuers

Month in Review – May 2013 Source: Herron Todd White Property Valuers

Questions?

Disclaimer: This presentation is intended to provide general news and information only. You should rely on their own enquiries before making any decisions regarding your own interests. Please do not rely on any part of this presentation as a substitute for specific legal or financial advice.