In particular we focus on getting the loan structure right the first time, choosing which lenders to use in the right order (yes this is important) and finally getting our clients the best deal possible.
Serviceability
Refers to the borrower’s capability to meet the repayments of a home loan. Lenders will access the borrower’s income, expenses and any other financial obligations to determine if they will be able to afford the loan repayments in their current circumstances.
Income – generated from employment or investment. You will need to provide proof of income via pay slips, tax returns, bank statements or rental statements.
Expenses – you will need to disclose all current liabilities like credit cards, personal loans, car loans and student loans (HECS), along with your monthly household living expense plus anything additional (discretionary) like private health insurance, private school fees or strata fees.
Examining Income and Expenses will produce a DTI (Debt to Income) score which compares the borrower’s debt obligations to their income.
Other factors considered – Current interest rates, loan term also will affect the loan servicing.
Once the factors above have been disclosed and reviewed the broker or lender can determine the maximum loan the client can afford.
A security interest in a loan is a legal claim on collateral provided by the borrower that allows the lender to seize and sell the collateral if the loan defaults. A security interest reduces a lender's risk, allowing them to charge a cheaper interest rate on the loan.
Learn MoreA security is the physical asset (ie. property) that the lender uses as a guarantee from the borrower that they will repay the home loan in full. It also gives them protection if for some reason you stop paying or can’t afford the loan, they can take possession and potentially sell it to reclaim any outstanding funds.
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