Frequently asked questions
Does Gadsden Finance charge a fee for service?
Generally No. Our service to you is complimentary and paid by the lenders.
There are however some circumstances where a fee is charged. Generally this is when the renemeration we recieve doesn't equate to the work required to process your application. These occassions are very rare and we would discuss this in detail BEFORE we proceeded with your enquiry.
Do the Banks charge me extra to cover your commission?
The lenders do not pass on this cost to you, the customer. They pay us in the same way that they would have to pay a bank employee who writes loans for them.
What is a Pre-Approval?
A pre-approval is simply an indication of the maximum amount you can potentially borrow.
It will give you confidence to negotiate with agents/vendors knowing your borrowing capacity.
Why use Gadsden Finance instead of going straight to the bank?
A bank is restricted by their policies and products which may not suit you best.
We will assess all your options and present you with a range of lenders/products that will better suit your situation.
What is a Mortgage Broker/Credit Advisor?
We are qualified finance industry professionals. We are advocates for our customers and above all we ensure that you don't take out a loan that is not right for you.
A Broker can assist you with finding home loans, car loans, commercial loans and more.
We assist you to pre-qualify, choose an appropriate loan product, and complete the neccessary application and mortgage documents. Then we follow the process through to loan settlement and beyond.
Because we have access to mainstream banks and other financial institutions as well as a range of private lenders, we can offer you a broad range of choices and taylor loans to your needs.
A Gadsden Finance broker is also with you not only now, but into the future. We provide you with a constant contact point for all your financial enquiries in the years ahead, unlike banks who have staff turn overs regularly making it challenging dealing with different staff members every time you have a need for a loan.
How much can I borrow?
Every bank/lender will assess your situation differently.
They will look at a verify a range of variables including your income, employment history, level of savings and the security property being purchased/refinanced.
It can be quite complex, but we will take the time to help you understand how your circumstances will be assessed.
Most importantly, we will take the time and discuss and understand your current and future financial committments so you are able to manage your repayments.
What documents will I need to have to get a loan?
Whilst lenders differ slightly with their requirements, the most common documents that majority of lenders will initially need to see are:
1. Proof of Identity - Ideally a drivers license and Passport/Birth Certificate
2. Proof of Income - Your 2 most recent payslips OR Tax Returns for self employed
3. Proof of General Living Expenses - The most recent 3months statement history for your main transaction account(s).
4. Proof of Deposit - Bank statement showing where the funds are currently held OR reciepts if the deposit is already paid.
Do I have to use a broker who is in my own home town?
Not at all!
Although we have brokers based out of Bendigo, Melbourne and Geelong our clients are Australia wide!
Technology like zoom meetings and docusign are making remote assistance so so much easier that ever before.
Who decides what interest rates will be?
The Reserve Bank of Australia set the interest rates. They meet on the first Tuesday of each month to decide what the official Cash Rate will be.
From there, lenders use this rate to set their own rates. They will adjust their rates taking into consideration not only the Cash Rate, but also their costs and other economic considerations.
How can I fund a home renovation?
As experts in the finance industry we can find you the best way to fund your renovation.
Because your situation will be different from anyone else, we will take into account things such as the value of your home and balance of your current home loan. This will show us what equity you will have available and from here we can go to your current lender or look at other lenders that will let you draw against this equity to complete the renovations.
There will be other factors to consider along the way, but that is what we are here for! Let us put your mind at ease and guide you through all your options.
What parties are involved in a real estate transaction?
Great question!! You might use all of the people listed below or only some of them.
We would recommend you always enlist the support of a Mortgage Broker and Solicitor to ensure you understand everything you are signing and committing yourself to along the way.
* MORTGAGE BROKER
The person that works for the purchaser to find a loan and liaise with all the parties involved to get the real estate transaction completed successfully.
This is the person(s) selling the property.
This is the person(s) buying the property.
This is the person/company/buyers advocate that brokers/negotiates the sale between the vendor and purchaser.
* CONVEYANCER or solicitor.
This is the person who will look over the Contract of Sale between the vendor and purchaser to make sure that you understand everything in the contract and what you are signing. Your solicitor will also negotiate term in the contract like a Finance Clause and Settlement date. The vendor and purchaser should each have their own solicitor to avoid any conflict of interest.
This is the bank/private funder that is providing the home loan to the purchaser to buy the property.
Can I use home equity to buy a house?
Yes you can!!
In fact, this is often how we assist First Homebuyers to get their first home. In this instance we can use the equity that a family member has in their home to assist with the purchase.
If you are already a property owner you can also use the equity to purchase another property. An investment property for example. This is what we would refer to as leveraging.
If you are wanting to use your equity for a purchase then we highly recommend contacting us for a FREE CHAT to look at your options and make a carefully considered plan to move forward.
What is LMI???
Lenders Mortgage Insurance (LMI) is insurance that covers the lender/bank if you default on your mortgage and are unable to continue paying the repayments. Even though the actual house acts as security, there is a chance that its value could decline, resulting in a financial loss for the lender. This is when LMI would be drawn upon.
Lenders will apply LMI to your loan most commonly when the loan is greater than 80% of the property's purchase price/value.
The amount of LMI charged is dependant on several factors, such as the loan size & property value as well as the location and type of property.
Mostly, LMI is just added to the total loan amount, so will be repaid by you, the borrower, va your loan repayments.
The advantages to the borrower is that using LMI allows you to purchase property with less than 20% deposit or without guarantors.