Dear RPBROWN,

The answer is that it depends on which lender you speak to and what type of work you do (full time, contract, casual, self employed etc etc).

Assuming you work full time, most would ‘prefer’ for you to have been working for 2 years plus for the same employer, however many will accept 6 months, and some even 3 (partly dependant on what you were doing before).

For this reason I’d advise you find a broker so they can do the ‘legwork for you.

I hope this is of assistance,
Regards

Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]

Dear Andrea,

As has been said, you can get 100% loans for investment properties. This implies that you do not need a deposit but as Bridge says you would still need monies for the closing costs:
Property Stamp Duty
Possibly Loan Stamp Duty
Your Legal Costs
Lender’s application fees
Plus the fees for a deposit bond if you used one.

You could as you’ve suggested use the equity in your own property as security for the investment property as you’ve suggested. Many people do. However, if for any reason you defaulted on the investment property, and the lender forced its sale, if they could not recover their costs they could come after your own property.

Another option would be to take out a Line of Credit on your existing property. You ask your lender to provide you with more credit than you need to cover the mortgage on your existing property. You then use this credit, which naturally you’d need to make repayments on as the deposit for the investment property. Thereby keeping the 2 properties seperate. However, Line of Credits often come with higher interest rates.

A lender/ mortgage broker should be able to provide further advice.

Good luck

Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]

Apart from the fact that the LoC gives you access to just that credit, which you could use as a deposit for another property or to pay for renovations etc.

Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]

Dear SK2,

My response to whether you should go and see a mortgage broker, or better still get them to come and see you would be whats the harm?

I appreciate that I am a mortgage broker so I am likely to say that, but most of us don’t charge you for our services, and get paid by the lender when and if you decide to pursue a loan through them.

The benefit is that we do the research for you. I know for example of 10 lenders that provide 100% loans, so though the rate is obviously important there might be other factors that you’d like considered as well. The ability to make extra repayments, offset accounts, etc etc.

If you do decide to go through a broker I’ve included some questions you might want to ask to determine whether they are the right broker for you:

1. Can the broker clearly explain in writing:
• The process the loan application will take from enquiry to settlement?
• Full disclosure of commissions received and how they are calculated?
(Not merely the fact that they are paid by the lender but the amount and how it is calculated).
• Their Complaints procedure and Privacy policy?
2. Can the broker demonstrate professional standards?
• Have they completed an accredited training course?
• Are they familiar with and comply with the Uniform Consumer Credit Code?
• Do they carry adequate professional indemnity insurance?
• Are they a member of the Mortgage Industry Association of Australia (MIAA) and comply with the
Code of Practice?
3. Is the broker working in your best interest? If so, can they demonstrate:
• They receive the same amount of commission regardless of lender or product chosen?
• They do not have branded products of their own?
• If they have their own “branded” products – clear reasons for any recommendation of those products?
• They disclose any alternative forms of remuneration?
• They disclose any referral fee they pay for being introduced to you as a potential client?
• They have a Customer Charter that clearly outlines their service levels, remuneration and dispute resolution policy?
4. Do they have at least 15 lenders on their panel?
• Can they offer a wide range of lenders – banks, non-banks, building societies, credit unions etc, to choose from?
5. Can they offer a choice of home loan?
• Will you receive a written comparison of home loan options including the upfront and ongoing fees?
• Are you satisfied that there is no conflict of interest? In other words, the lender and product are the right loan for you and not the broker.
6. Will an estimate be given of the recommended lender’s loan processing time?
• Will any history of lender delays be discussed with you?
7. Do you consider you have been encouraged to borrow within your means?
8. Will the broker charge you for his/her service?
• Outside of the normal lender application fees, there will be no fees requested by the broker to cover their individual costs.

If you have any other questions feel free to give me a call.

Best wishes and good luck
Regards

Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]

Dear Queen,

Sounds deplorable to me. Common sense (and decency) would suggest that the costs should have been outlined to you.

What stage are you up to now?
Have you managed to get any sort of resolve?

I was interesed to read the discussion about whether you as a property investor, i.e. using mortgages to buy property for business or investment purposes, were covered by the UCCC. Like Terry, I would have assumed that you weren’t?

Good luck with it all, again like the others if can be of assistance please let me know,

Regards
Neil

Neil and Kate Gorman
Mortgage Choice
0430 500 848