Frequently Asked Questions (FAQ)

You should have all the information you need at your fingertips so you can make smart financial decisions. To help you along the way our brokers have put together a list of the questions that they get asked every day so you can get answers fast. Have a question you can't find? Ask us and we'll answer your question and add it to our list!

Positive Home Loans FAQ

  • How can I own my own Home sooner?
  • If you're looking to purchase a home, as long as you can service the loan on your own income, you can get a home loan a deposit as little as 5% of the purchase price.

    If you currently have a home loan, and you want to pay it off sooner, there are a few options you can consider:

    • If you have a little extra each pay cycle, then pay off a bit more than the minimum repayment. This will reduce the balance on your loan, so it'll reduce how much you interest you pay over your loan term. Check with your mortgage broker as to the maximum amount you can repay, and to find out if it's worthwhile moving to a variable rate at the end of a fixed term, or refinancing your home loan to access lower rates.
    • If you make payments by direct debit each pay cycle, rather than a single monthly payment, you can reduce the loan balance and interest rates paid, compared to if you make a single monthly payment. It just depends on how you get paid.
    • Consider an offset account: the balance of this account will count towards your loan balance, but you can easily access it when you need to.
  • How do I know which home loan suits my needs?
  • For an overview of the types of loans that are available, have a look at our Compare Home Loans page. When you're ready for more information, it's best to chat to one of our brokers. They'll be able to take your personal circumstances and your goals into account, and recommend something that is going to work for you. It might be a combination of the types of loans described.

  • Do I need a home loan pre-approval before I bid at auction?
  • It certainly is a good idea to have your pre-approval before the auction day. This will give you confidence knowing exactly how much you can afford, and you'll be able to keep a clear head and bid within your budget. It could save lots of stress in the long run.

  • How do I apply for a home loan?
  • It's pretty easy to apply for a home loan. You can choose to apply online, and one of our home loan brokers will contact you when you choose to arrange the details and progress the application.

    If you'd rather, you can call us on 1300 366 287 for a discussion about what you're looking for, or make a face to face appointment. You can come to our office, or we can come to visit you where ever you choose.

  • My parents would like to help me buy a home. How does this work?
  • As long as you can afford to make the repayments on a home loan, your partner or parents may elect to go Guarantor for your home loan. This effectively means that they'll pledge the equity in their home as your deposit until you've made enough repayments to have sufficient equity in your home. Once you 'own' enough of your own home you can release your guarantor.

    Apart from not needing a deposit, you also avoid having to pay the Lender's Mortgage Insurance.

    You can read more about taking out a home loan using a family guarantor to completely understand how it all works.

  • What documentation do I need to apply for a home loan?
  • The documents that you need can be split into 4 categories:

  1. Identification
    1. Passport, driver's licence, proof of age card, Birth certificate, citizenship certificate, Pension card
  2. Income
    1. Evidence of wages, payslip, contract. rental or investment income, and any Government income.
  3. Loans and Savings
    1. 3 months statements of bank accounts, and any secured loans.
  4. Other
    1. If you've received a gift of money towards your deposit, a statutory declaration that the funds are an unconditional gift.
    2. If you're using your equity in an existing property, the rates notice with the street address and title reference of the property.
    3. If you've found the property you'll purchase, a Contract of Sale or Offer of Acceptance, and the contact details of your solicitor or conveyancer.
    4. If you're building: a fixed price building contract plus original council approved plans
  • How much deposit do I need?
  • You'll need a deposit of 5% of the property purchase price to get a home loan. The larger the deposit that you can save, though, the less risk you pose to lenders. This means you'll be eligible for more flexible loan options and lower interest rates available to you.

    A bigger deposit will also mean that you'll have lower repayments and the loan will cost you less as you pay less interest over the life of the loan.

    If you manage to save a 20% deposit you won't need to pay Lender's Mortgage Insurance.

  • How much can I borrow?
  • This depends on your income, expenses, existing debt and financial commitments. You can get a rough idea of how much you'll be able to borrow using our calculator.

  • What is a deposit bond, and how do I arrange one?
  • A deposit bond is a guarantee from the bank to the seller that you will pay the home deposit at the time of settlement. It's a document, so not actual money changes hands. All of the funds, both the deposit and the purchase price, will be paid at the settlement. If the purchase does not go through for any reason and the deposit is forfeit, then the deposit bond is paid to the seller.

    A deposit bond is commonly used when:

    • you make an off the plan purchase
    • you intend to bid at auction
    • you have equity in some property but no liquid assets
    • you're waiting on funds to come through from another source.
  • What is the First Home Owner's Grant and how can I get it?
  • If you've never owned property in Australia before, you plan to live in your new home, and you are buying a brand new home that hasn't been lived in, or you're building, you might be eligible for the First Home Owner's Grant. The exact amount of the grant and the criteria for eligibility vary from state to state.

  • Will I need Lender's Mortgage Insurance? What does it cover?
  • Unless you provide a 20% deposit in cash or through equity in another property - whether it's your own or a guarantor - you will need Lender's Mortgage Insurance (LMI). The advantage of LMI is that you can borrow up to 95% of the property value, as the insurance provides the protection that would otherwise be your deposit, in the event that you default on the loan, and sale of the property fails to cover the lender's costs.

  • When should I go to a solicitor?
  • You'll first need to consult with a conveyancer or a solicitor once you've decided to buy a property, but before you make an offer or bid at auction. They'll be able to check over the contract before you commit to the purchase.

    After the contract of sale is signed, the conveyancer or solicitor takes care of the legal side of checking the property title and transferring it, free of any encumbrances, so that it's legally yours. They also take care of paying the stamp duty, title transfer fee and any other charges to make the property your own. For more information on the role of the conveyancer in your property purchase, you can read on here.

  • How long will it take for the bank to approve my home loan?
  • It takes 2-10 working days from submission of the initial application for a home loan to be approved, depending on the loan type and the lender that you've selected.

  • What if I've found my new home, but I haven't sold my current home?
  • You can get a bridging home loan to buy the new property. The bank will lend you the money for your new home, based on the fact that you expect to sell your current home within 6 months. The time period can be extended if need be. Both home loans will be held by the same lender, and you will generally make repayments on only the new mortgage. You'll need to have enough equity in your first home to provide security for the loan otherwise you may need a deposit towards your new home.

  • How does a full interest offset home loan work?
  • An 'offset account' is a bank account that is linked to your home loan. You can access this bank account for your regular banking. The money in the bank account counts towards the balance of your mortgage, so you only pay interest on the amount owing on your home loan, minus the balance of this bank account. You can usually pay you salary and other income into this account.

  • Can I pay out my home loan at any time?
  • You certainly can. There is usually a fee applied to finalisation of your home loan. This is sometimes called an 'exit fee'.

  • How do I increase or decrease my repayments?
  • You can change the frequency of your repayments so that you're paying a smaller amount more often, or a larger monthly payment. With a principle and interest loan with a variable rate, you have more flexibility to change your repayment amount. If you're on a fixed interest loan term, you might have to wait until the term ends to change your repayment amount. Have a chat to a mortgage broker, who can assess your options and help you to secure a repayment amount that you're satisfied with.

  • What is a principle and interest home loan? How is it different to an interest only home loan?
  • A principle and interest loan is a regular home loan where your repayments pay the interest (costs of borrowing the money), but they also count towards paying off the home itself. This means with each payment you build equity in your home, and you owe the bank less in total.

    An interest only loan means that you have elected to pay only the interest on the home loan, and not contribute to paying off the total amount borrowed to purchase the home. You may be able to elect to pay only the interest on your own for a period of time, usually 1-3 years. This can free up some money if you have expenses - like renovating your home to add value.

  • What if my personal or financial circumstances change?
  • If things change, the best thing to do is to speak to your broker about what your options might be. You may decide to refinance your home loan to a different loan structure. If you're struggling to make repayments, you might be eligible to request a repayment pause. This will mean you can take a break from making monthly payments for 3 to 12 months. If you have extra money coming in, there are options to pay back your home loan faster too. Speak to a broker to make your new financial plan.

  • Will I have to pay stamp duty if I refinance?
  • You do pay stamp duty when you refinance. The amount payable is based on how much the new home loan is for.

  • What is a comparison rate?
  • The comparison rate is calculated using a formula set by the National Credit Code. It allows you to accurately compare home loans as it is calculated to include both the interest rate paid on the loan and the fees and charges for the home loan. So it reflects the true cost of the home loan, with no hidden fees and charges.

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