Day: 10 September 2019

in 0by

4 Top Reasons Why Your Home Loan May Be Declined

4 Top Reasons Why Your Home Loan May Be Declined

What Can Cause My Home Loan To Get Declined – 4 Most Common Reasons

The process of buying a home is very tedious and lengthy, especially if you need a loan as the solution to financing.

You first have to see how much you can borrow and then find a home that would fit the criteria – after all, we can’t quite borrow as much as we’d want to. On top of that, there’s also the chance for your loan to get declined.

Because of this, you should submit your loan application as early as possible so that you don’t miss the purchase of your dream house. Still, why could your home loan be declined?

Credit File Defaults

During the home loan application process, your lender will take a look at your credit report. The latter records the current loans that are in your name, any previous loan applications, as well as whether you have defaulted on a loan or failed to pay a bill on time.

Defaults and bankruptcy are considered as black marks and may count against you when applying for a home loan! We do however have alternative second tier lenders who can consider approval if you have bad credit or listed defaults.

Deposit Issues

Every home loan comes with a maximum loan-to-value ratio – LVR. The LVR is the maximum amount you can borrow and is expressed as a percentage of the property’s value.

As you may know, a deposit is also required for a home loan. For example, if you apply for a home loan which has a maximum LVR of 80%, then you will need to put down a deposit of at least 20%. Naturally, if you can’t do so and this is the requirement, your home loan will be declined.

It is also imperative you consider holding genuine savings if you are applying for a home loan with a deposit less than 20%. Not holding genuine savings may see your home loan get declined.

Serviceability

Under Australian law, each lender has the duty to responsibly lend money to their customers. This means that, if you are a low-income earner and want to buy an expensive property via a loan, the chances for your application to get declined are quite big.

Basically, if the lender determines that you will not be able to make regular loan repayments – now and in the future – they will decline your home loan application. The lender will need information regarding your income, as well as your debts. They will use this information to see how much of your monthly income you use to pay off your debts.

If too much of your income is used for previous debt, then they will deem you as unable to afford mortgage repayments.

The Valuation

Home loans will not be approved until and unless the property that one wishes to purchase is professionally valued.

The lender wants to make sure that they will be able to recoup their losses in case you default, and the property has to be sold. You may be willing to pay more for your dream house, but a lender will definitely not take any risks.

The valuation will need to be within the LVR guidelines and if it is a purchase, the valuation will need to match the Contract of Sale. Unless you have the funds to cover the shortfall, the lender may decline your application should the valuation not match the LVR or contract of sale.

Here at Highline Lending, we have access to ordering complimentary upfront valuations prior to starting a loan application and prior to clients committing to a property purchase, this ensures the valuation doesn’t have the loan declined and also helps us structure your finances.

The Bottom Line

As you can see, there are a lot of reasons why your home loan may be declined. In fact, you can be faced with such a decision even if you fail to provide your lender with enough documentation.

Therefore, applying for a home loan and ultimately buying a house is not as easy as it may seem.  To overcome or prevent any issues that may get your home loan declined, you can always contact us and have one of our experienced mortgage brokers help you.

We will guide you through the entire process of finding a loan and help you find the one that fits your needs! Just reach out and contact us today for questions or more information! Contact us on on 02 9121 6247 or submit your scenario online. 

SHARE THIS WITH YOUR FRIENDS
Share on email
Email
Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on linkedin
LinkedIn
View All Our Articles
view all articles

Access our free e-guides

Whether you’re a first home buyer looking at entering the market or an existing home owner looking at ways to save money on your home loan, we have you covered. We’ve put hundreds of hours of research into these guides to ensure you end up ahead, and it’s completely on the house.

FREE HOME LOAN GUIDES
FREE HOME LOAN GUIDES

So, why use Highline Lending for your home loan?

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT

We meet for a consultation, obtain your supporting documents and proceed to structure and package your application for approval knowing exactly what the banks want to see. We also monitor your home loan post approval ensuring you’re home loan suits you and your financial position

We get paid a commission from our lenders as a result of introducing your business to them. Subsequently, our service is at no cost to you. Our commission does not affect your interest rate whatsoever, if anything, we’re in a position to get you a lower interest rate than the general public due to our relationships with our banks

With our many years experience in the industry, we’ve been exposed to both easy and complex loan scenarios. Each loan we process gets presented to over sixty financial institutions, ensuring we have explored all options possible and are able to provide a solution

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT
in 0by

How a Mortgage Broker Can Help You Get a Loan, Why Use One

How a Mortgage Broker Can Help You Get a Loan, Why Use One

Trending Articles

Applying For a Home Loan With a Trust Structure? What You MUST Know!

Australian Property Valuations Explained & How Property Is Valued

Conditional vs. Unconditional Home Loan Approval – The Difference Explained!

Our Fees – How Mortgage and Finance Brokers Get Paid, How Much Do They Make ?

Everything You Need To Know About The National Consumer Credit Protection Act 2009 (NCCP)

How a Mortgage Broker Can Help You Get a Loan, Why Use One

What Is Stamp Duty In Australia? It’s Not Hard To Understand!

SUBMIT YOUR

SCENARIO.

To discuss your scenario, contact us and we’ll be in touch to discuss your next financial move, we’re here to help get your loan approved!

 

Start
view our

CALCULATORS

Browse our suite of property and finance calculators to start preparing your next strategic move

Browse

Why Should I Use a Mortgage Broker When Applying For A Home Loan

Statistics show that mortgage brokers are responsible for writing more than half of all the home loans approved in Australia. In short, being a mortgage broker means being part of a multi-billion-dollar industry.

It is also obvious why people rely on mortgage brokers to find the loans that fit them the best. Looking for lenders and working out which offer is the best can be confusing, not to mention time-consuming as well.

In short, it is much easier for you to just hire a mortgage broker to do all the hard work for you – and for a good reason. We’ll explain everything you need to know and also have another guide warning you on 4 crucial factors to consider when looking for a mortgage broker.

What Does a Mortgage Broker Do?

As mentioned above, a mortgage broker can be seen as a financial adviser that will help you find the best loan for your needs. However, the main question is still there – what do they do exactly and how they help you?

Well, one of their first jobs is to look into your financial affairs, figure out your creditworthiness, and then help you determine the exact type of loan that will fit you the best.

Then, they introduce you to the variety of home loans that they have available from the panel of lenders they act for. Keep in mind that mortgage brokers offer products from several financial institutions, but not always from all of the lenders on the market. At Highline lending we are supported by over 60 financial institutions!

Naturally, as they have access to so many resources, they will most certainly have the loan that you need available. On top of that, they will also discuss the goals and options that you have and will help you deal with the paperwork.

Why Should You Use a Mortgage Broker?

Obviously, you should use a mortgage broker when you think that you are not versed enough in matters regarding finance or mortgaging. For example, you may know how loans work – but you may not know how to pick one that will place you in a favorable position.

They help you choose the right lender or bank

A denial from a lender doesn’t necessarily translate into a lost opportunity. Many individuals are under the impression that lenders follow the same stringent rules and policies. When they’re turned down, they often assume that they’re going to be denied by banks and other financial institutions as well.

While many lenders strictly follow mortgage lending and real estate guidelines, their policies do vary. This means that you can shop around to look for other lending options. Don’t have the time? No problem—a mortgage broker can do the job for you.

With the knowledge and expertise, your mortgage broker can match you up with a lender whose policies best suit your circumstances. 

They guide you to loans that you qualify for

Every loan application gets registered on your active credit file. This means that every time you apply for a loan, it is recorded on your credit file. A build-up of inquiries on your credit file is a big no-no as they can have negative repercussions on your ability to get credit in the future.

Lenders do not want serial applicants, so it’s better to have your broker match you up with a suitable product the first time so that you can avoid this trap. Besides, your mortgage broker will set you up for a better chance of getting approval.

They aid you in improving your credit and sorting through your paperwork

The services of a mortgage broker go beyond setting you up with the right lender. Apart from that, he or she can educate you on how to improve your chances for loan approval. As your mortgage broker has access to your financial information, he or she will provide you with feedback and recommendations on how to improve your credit score.

Apart from this, your mortgage broker is also an expert in low-doc loans. He or she can review all your paperwork to ensure the whole application process won’t be held up. A good mortgage broker will tell you exactly what paperwork you need and how to rise above any obstacles in the criteria set by the lender.

They lead you to the best deal

Choosing to seek the professional help of a mortgage broker instead of shopping around for a lender on your own can mean a world of difference in your financing experience. A mortgage broker has the knowledge, skills, and expertise in the real estate industry. They are familiar with the lenders and can identify the one that is most suitable for your loan application.

Working with a mortgage broker will not only give you all the chance in the world to get approval but make it possible for you to secure a loan with a much lower interest rate, lower monthly contractual payments, and bonus features. The better deal will potentially save you thousands of dollars over the course of your loan.

Main Advantages of Using a Mortgage Broker

1. As mentioned above, if you have little to no knowledge in terms of the mortgage or finance industry, then a mortgage broker can very well be an invaluable resource for your endeavors in the property market. On top of that, they are also great if you have a hard time understanding your own financial affairs.

2. It is well known that a mortgage broker can find you a mortgage that’s way better for your individual affairs and situation than what you would have found.

3. Assessing home loans requires a lot of free time. If you don’t have enough time, you can rely on a mortgage broker to do the extensive research required – they will analyse the home loan products that are available and then consult with you.

Top Reasons for Hiring a Mortgage Broker

They Teach You How to Buy – an experienced mortgage broker will guide you through the whole home buying process, including application, compiling the documents, liaising with your solicitor, and so on.

Their Services Are Usually Free – unless you borrow a small amount or have complex situations on your hands, most brokers are usually free. As they are paid by lenders to find them customers, they have no need to charge you.

They Have Experience You Can Benefit From – if you choose to handle your first home loan with a mortgage broker, then you will most certainly learn from their experience and actions. These brokers know how to get your application approved, so it goes without saying that you will learn a thing or two, for future loans.

They Can Make the Application Process Faster – given that mortgage brokers have good relationships with the lenders they work for, they can actually speed up your application, making it two to three days faster than usual.

They Specialise in Different Types of Loans – there are also specialist mortgage brokers, who are able to handle special or complex requirements without any issue. For example, there are brokers that specialise in construction loans, property investing, and even commercial properties.

The Bottom Line

Now you see that a mortgage broker can be a good addition to the team responsible for getting you your home loan and, ultimately, your home. As mentioned above, depending on your knowledge and experience, they can prove to be invaluable to this whole experience.

However, you must remember that you have to carefully question and choose mortgage brokers. After all, you don’t want one that works with only three to four lenders and comes at you with little to no home loan products.

On the other hand, if you need help finding the best home loan available, then you can contact us. Our team of experts will guide you through the entire process of finding a loan – making sure that you get what fits your needs the best. We work with over 60 lenders and set a standard in the finance industry making sure you a provided with a world class level of service and get your finances approved with the most suitable bank.

If you’re looking for a mortgage broker in Sydney, get in touch with us today to see how we can help! We are always ready to provide you with our assistance!

Get in touch with us because we are always ready to provide you with our assistance! Contact us on on 02 8530 1107 or submit your scenario online.

View All Our Articles
view all articles

Access our free e-guides

Whether you’re a first home buyer looking at entering the market or an existing home owner looking at ways to save money on your home loan, we have you covered. We’ve put hundreds of hours of research into these guides to ensure you end up ahead, and it’s completely on the house.

FREE HOME LOAN GUIDES
FREE HOME LOAN GUIDES

So, why use Highline Lending for your home loan?

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT

We meet for a consultation, obtain your supporting documents and proceed to structure and package your application for approval knowing exactly what the banks want to see. We also monitor your home loan post approval ensuring you’re home loan suits you and your financial position

We get paid a commission from our lenders as a result of introducing your business to them. Subsequently, our service is at no cost to you. Our commission does not affect your interest rate whatsoever, if anything, we’re in a position to get you a lower interest rate than the general public due to our relationships with our banks

With our many years experience in the industry, we’ve been exposed to both easy and complex loan scenarios. Each loan we process gets presented to over sixty financial institutions, ensuring we have explored all options possible and are able to provide a solution

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT
in 0by

What Is Stamp Duty In Australia? It’s Not Hard To Understand!

What Is Stamp Duty In Australia? It’s Not Hard To Understand!

What Is Stamp Duty In Australia – How Much Do I Pay?

When it comes to buying property, there will always be additional costs – and most of the time, these costs will go way beyond what you have to pay for the deposit. You will have to deal with lender’s fees, legal fees, building inspection fees – but what will most likely burn a great whole through your budget is the stamp duty fee.

To make things even more complicated, stamp duty has no standard rate in Australia. In fact, each state will feature its own rate – and this might leave you confused about what it is exactly and how much you will have to pay. To make things easier for you to understand, this article will present you the basics of stamp duty.

What Is Stamp Duty?

Stamp duty is practically a tax that pays for the property transfer (e.g. homes or lands) from one lender to another. They also apply to other types of properties such as mortgages and vehicles – as well as any other belonging that has your name on the contract.

When it comes to property, the value of the property will be the main deciding factor into how much you will have to pay. Moreover, the state in which you are making the purchase will also have its own role – which is why it is recommended that you make use of a stamp duty calculator.

However, as a general rule, the higher the price of the property, the more you will have to pay in stamp duty. Sometimes, this may add up to thousands of dollars.

When Do I Need to Pay the Stamp Duty?

This will differ from one state of Australia to another. For instance, in the ACT, you must pay the stamp duty within 28 days of settling, whereas in Tasmania and NSW you will have up to 3 months to make that payment. However, as a general rule of thumb, it is payable prior to settlement. Contact a conveyancer or your mortgage broker for more information.

How Does Stamp Duty Differ from Place to Place?

As you might have noticed, stamp duty differs depending on the place where you made the purchase. Three factors, in particular, will determine exactly how much stamp duty will cost.

Location: Stamp duty price is generally set as a percentage from the full price of the property – but this will also depend on the location where the property was built.

Property Type: Each property type will have a different value in stamp duty. For example, you will have to pay a different price for an existing residential loan compared to a vacant land.

Purpose: Do you want to rent the property straight away, or is your intention to live in it? In this case, the stamp duty might also differ.

Grants: Depending on what state, grants are available to first home buyers with no stamp duty payable up to certain values with discounts applied thereafter. Get in touch with our mortgage and finance brokers who will fill you in with what grant you may be eligible for.

The Bottom Line

If you need help calculating your stamp duty, contact our office right away. Moreover, if you are in need of help to finance the stamp duty, we may be able to help you out. We have many years of experience in helping our clients find an appropriate loan for their needs, and we would be more than happy to guide you through the process. Contact us on on 02 9121 6247 or submit your scenario online.  

SHARE THIS WITH YOUR FRIENDS
Share on email
Email
Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on linkedin
LinkedIn
View All Our Articles
view all articles

Access our free e-guides

Whether you’re a first home buyer looking at entering the market or an existing home owner looking at ways to save money on your home loan, we have you covered. We’ve put hundreds of hours of research into these guides to ensure you end up ahead, and it’s completely on the house.

FREE HOME LOAN GUIDES
FREE HOME LOAN GUIDES

So, why use Highline Lending for your home loan?

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT

We meet for a consultation, obtain your supporting documents and proceed to structure and package your application for approval knowing exactly what the banks want to see. We also monitor your home loan post approval ensuring you’re home loan suits you and your financial position

We get paid a commission from our lenders as a result of introducing your business to them. Subsequently, our service is at no cost to you. Our commission does not affect your interest rate whatsoever, if anything, we’re in a position to get you a lower interest rate than the general public due to our relationships with our banks

With our many years experience in the industry, we’ve been exposed to both easy and complex loan scenarios. Each loan we process gets presented to over sixty financial institutions, ensuring we have explored all options possible and are able to provide a solution

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT
in 0by

What Is Negative Gearing? It Can Save You LOADS!

What Is Negative Gearing? It Can Save You LOADS!

What Is Negative Gearing and How Does It Work?

Long story short, negative gearing means that you are making a loss. Basically, it shows that the interest expenses and repayments on your investment are greater than the rental return.

This can somehow be seen as good news, mainly because Australian property investors can significantly reduce their tax bill if they are subject to negative gearing. It also helps get your home loan approved as lenders take this deduction as borrowing power!

As expected with any useful benefit, negative gearing is now part of some controversies. Therefore, there are risks that come with it, as well as strategies that you can use to maximize the profit you gain from your property investment.

The Basics of Negative Gearing

As mentioned above, an investment property is considered negatively geared when the net rental income, after the deduction of expenses, is less than the interest that comes with the borrowed funds.

Naturally, the main result of negative gearing is a net rental loss. For example, you buy an investment property, renovate it, and then cover some of its maintenance costs. However, at the end of the year, you can be faced with a hard truth.

Namely – that the annual rental income that your investment generates is less than the expenses you have incurred and are related to that investment property.

The Good Side of Negative Gearing

We did mention that negative gearing comes with its own benefits, even if – overall – you are still losing money.

You can turn this loss into a benefit by offsetting negative gearing against the income that you earn from your other sources – other investments, income, and so on. In the end, you will be effectively earning less income. This means that you will have less tax to pay at the end of the next financial year.

In short, negatively geared investments give you the opportunity, and right, to deduct the difference resulted from your loss in your taxable income.

How Do You Calculate Negative Gearing Loss?

You need to do three things in order to come up with your negative gearing loss:

Add Up the Income from Your Property – this consists of the amount of rent that you collect from your investment property (multiply the weekly rent by 52).

Add Up the Expenses from Your Property – this includes maintenance costs, interest payments on the mortgage, as well as property management fees.

Deduct the Depreciation – depreciation is the loss that can be seen from the decrease in value of certain assets within your investment property as well as of the building itself. Almost anything can depreciate – drapes, carpets, appliances, and so on.

The Bottom Line

When looking for a deduction via negative gearing, you may even be able to deduct the full amount of rental expenses against your income (even your rental income), including wages and salary.

Overall, property investors can claim deductions in revenue, capital items, and building allowances – not to mention any additional deductible expenses, such as land tax, insurance, etc.

Basically, negative gearing can protect you in case of a loss. It can also be used as a strategy when your investment property is not doing well but be aware that strategies do come with risks.

We can offer you more information and answer your questions if you have any. Simply contact us! Our team of experts will answer your questions and help you with anything related to home loans – including the process of finding the best one for you.

Contact us on on 02 9121 6247 or submit your scenario online.

SHARE THIS WITH YOUR FRIENDS
Share on email
Email
Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on linkedin
LinkedIn
View All Our Articles
view all articles

Access our free e-guides

Whether you’re a first home buyer looking at entering the market or an existing home owner looking at ways to save money on your home loan, we have you covered. We’ve put hundreds of hours of research into these guides to ensure you end up ahead, and it’s completely on the house.

FREE HOME LOAN GUIDES
FREE HOME LOAN GUIDES

So, why use Highline Lending for your home loan?

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT

We meet for a consultation, obtain your supporting documents and proceed to structure and package your application for approval knowing exactly what the banks want to see. We also monitor your home loan post approval ensuring you’re home loan suits you and your financial position

We get paid a commission from our lenders as a result of introducing your business to them. Subsequently, our service is at no cost to you. Our commission does not affect your interest rate whatsoever, if anything, we’re in a position to get you a lower interest rate than the general public due to our relationships with our banks

With our many years experience in the industry, we’ve been exposed to both easy and complex loan scenarios. Each loan we process gets presented to over sixty financial institutions, ensuring we have explored all options possible and are able to provide a solution

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT
in 0by

What Is Invoice and Debtor Finance? Borrowing Against Your Unpaid Invoices!

What Is Invoice and Debtor Finance? Borrowing Against Your Unpaid Invoices!

What Is Invoice & Debtor Finance

When running a business, the only thing that you need – as soon as possible – is the cash that your customers owe you. With invoices, you can wait for quite a while before your cash flow starts moving, so to speak.

Luckily, businesses can rely on invoice and debtor finance to have one thing less to worry about. Such forms of finance will help your business release cash from the outstanding customer invoices – the perfect solution for slow cash flow!

Let’s now take a closer look at invoice and debtor finance!

The Basics

Invoice finance, also known as factoring, is one of the oldest lending forms in the world. Basically, clients that offer a service or conduct certain work with a factoring finance facility will not have to wait 30 or more days for their payment – instead, they will be paid straight away by the lender

By definition, factoring means that you provide a financier with completed invoices and get paid a certain percentage of an invoice anywhere between 24 and 48 hours. We have a lender who can offer same day invoice & debtor finance!

Naturally, roughly the same aspects apply to companies that rely on invoice and debtor finance. Businesses with factoring will enjoy very fast access to working capital – the same working capital would be tied up in accounts receivable for as long as 60 days without factoring.

Cash Flow Improvement – The Main Advantage

As mentioned above, invoice and debtor finance improves cash flow and helps businesses get their hands on their money much sooner than they would if they waited for customers to pay up.

Debtor finance provides a budget for slow-paying invoices and accelerates a company’s revenues. In short, working capital and cash flow are improved, allowing for the payment of wages, suppliers, and any other expenses on time – or sooner than needed.

How Does Invoice & Debtor Finance Work?

When applying for invoice & debtor finance, you will have to choose between invoice factoring and discounting – whichever suits your company the best.

Invoice factoring, unlike discounting, is fit for small companies that don’t have yet established the collection and credit departments. Factoring finances the invoices individually – while discounting does so in a batch.

The factoring company will then advance the business 80% to 85% of the invoice’s value – this process will start as soon as the invoice is submitted. The remaining 15% to 20% – minus fees – will be advanced to the business when the customer pays their invoice in full.

Benefits of Invoice and Debtor Finance

1. Cash Flow Improvement

2. Financial Stability

3. Ability to Extend Payment Terms

4. Flexible Financing Facility

The Bottom Line

In short, if you have a small business that could use improvement to its cash flow, then invoice and debtor finance is the thing you should apply for. However, keep in mind that your business must be well organized and free of major tax and legal problems.

Other than that, you shouldn’t have any issues applying for invoice & debtor finance!

On the other hand, if you need information or have questions regarding home loans and such, then you can contact our office. We will guide you through the process of finding the best loan for your needs – even exceeding your current one! 

Feel free to reach out and contact us today – we’re more than happy to help you! Contact us on on 02 9121 6247 or submit your scenario online.

SHARE THIS WITH YOUR FRIENDS
Share on email
Email
Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on linkedin
LinkedIn
View All Our Articles
view all articles

Access our free e-guides

Whether you’re a first home buyer looking at entering the market or an existing home owner looking at ways to save money on your home loan, we have you covered. We’ve put hundreds of hours of research into these guides to ensure you end up ahead, and it’s completely on the house.

FREE HOME LOAN GUIDES
FREE HOME LOAN GUIDES

So, why use Highline Lending for your home loan?

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT

We meet for a consultation, obtain your supporting documents and proceed to structure and package your application for approval knowing exactly what the banks want to see. We also monitor your home loan post approval ensuring you’re home loan suits you and your financial position

We get paid a commission from our lenders as a result of introducing your business to them. Subsequently, our service is at no cost to you. Our commission does not affect your interest rate whatsoever, if anything, we’re in a position to get you a lower interest rate than the general public due to our relationships with our banks

With our many years experience in the industry, we’ve been exposed to both easy and complex loan scenarios. Each loan we process gets presented to over sixty financial institutions, ensuring we have explored all options possible and are able to provide a solution

CHAT WITH AN EXPERT
CHAT WITH AN EXPERT