Thinking About a Car Loan ? This Is What You NEED to Know!

Many car loan types exist to cater to different people with different needs, for an in depth guide visit out car loans section. Because there are many different types, how do you select the right loan type for you?

Here five things you’ll have to keep in mind in choosing the right loan amongst the hundreds available:

Determine Your Budget

The most important factor in selecting a car loan is your budget. By knowing how much you can afford, you reduce the risk of getting into financial pressure. To help set a budget, factor in your monthly payments along with the costs to operate the car as well—fuel, maintenance, registration, and others alike. We’ve got a great car loan repayment calculator to help you determine what your monthly repayments will be!

Choose Between an Old or a New Car

Some loans are directed at different cars as well. Some are used for purchasing old cars, others new, while some others for both. Decide on what kind of car (old or new) you have in mind to help you determine which loan fits you best.

Consider the Different Loans

With a budget in mind, you can then select a loan that fits your pocket. If you don’t have much to spend, a fixed-rate loan will suit you best. However, if you have extra cash, a variable-rate loan can potentially be cheaper than a fixed-rate loan. Of course, this comes with its own risks, and no one knows for sure if rates are going to increase or decrease.

You’ll also have to decide if you’re going to select secured or unsecured loans. If you’re sure that you will not default on your loan, a secured loan will reward you with lower interests. If you do not want to risk losing your property or vehicle, an unsecured loan is a way to go, although you’ll have to work with a higher interest rate.

Do keep in mind as well that different loans have different features. Some may allow you to pay out your loan earlier, and some others may allow you to make extra payments. Some may even allow you to choose the payment period that suits you best, while others take longer to get your loan approved. In other words, no loans are the same. Your job is to decide precisely what you need and compare the different car loans to find one that will fit you. Alternatively, get in touch with us and we’ll guide you through the entire process start to finish and provide the most suitable lender based on your unique circumstances and lifestyle.

Preparing the Documents

To make sure that the process goes by without hassle, prepare all the documents appropriate for your loan before going out to sign the contract. Different loans will have differing requirements, but general documentation will include your credit history and proof of income.

Find an Insurance Provider

You never know what might happen to you in the future. You may face a disability or a disease that will cause you to retire from work. If that happens, you won’t have any income, putting you at risk of defaulting your loan if you cannot cover the total cost. This is where insurance comes into the picture. The insurance company will cover you and your car and will take care of your loans should you find difficulty paying it off due to unforeseen circumstances.

Before deciding on a loan, make sure that you do thorough research. Make sure that it fits your budget, offers most if not all, of what you’re looking for, and is the best deal you can get. You don’t want to select a loan only to find out a few days later about another better loan.

If you’re looking for a car loan in Australia, get in touch with Highline Lending to see how we can help!

Need a Mortgage Broker ? We have you covered, this is what you need to consider in 4 quick tips! 

Getting a mortgage is not an easy process. The entire journey of shopping for the best lender, complying with all the requirements, negotiating, and closing the deal can be tricky to accomplish by yourself.

Because of this, hiring the service of a mortgage broker can help you secure a loan that best suits your needs and perform all the legwork. In return, a broker is paid in commissions by the financial institution that lends you money.

That said, it all starts with looking for the right mortgage broker. Here are four tips to help you find the best broker for your mortgage hunt. Need to know WHY you should use a mortgage broker ? See our guide here.

Do your homework

When it comes to looking for a broker, preparation is the key. This means that you have to do your homework before hunting. Look for potential loans online and get a clear idea of the type of loan you want. Assess your home and mortgage needs and align them with what type of broker you’re looking for. Prepare a list of questions to ask from prospects and seek various recommendations from them. Being prepared can put you on the right track in choosing the right candidate.

Understand how a mortgage broker gets paid

It’s important to know how a mortgage broker gets paid. Doing so will help you be confident in hiring the service of a mortgage broker. Typically, most brokers get paid commissions directly from the banks for arranging their loans. There are two types of commission: upfront and trail commission. The first is a percentage of the total value of the loan paid upfront, while the latter is a percentage of the mortgage that brokers will receive over the life of the loan.

Check the experiences and assess the qualifications

The next thing to do is to check the experiences and evaluate the qualifications of your prospects. First, make sure that the broker is authorized to provide you with a loan, where they should have their Australian Credit License. Second, check their background by asking their educational attainment and broker certifications. Lastly, check out the broker’s extensive experiences in handling mortgages for various clients. Qualified brokers are usually members of the Mortgage & Finance Association of Australia (a professional association for brokers). Some will have a diploma while others have a degree in finance, economics, or accounting.

Ask the broker’s lender panel and ownership structure

Make sure to ask the broker for their lender panel and ownership structure. First, brokers are restricted by the list of banks they can access known as “lender panel.” A good broker will have a wide range of lenders on their panel. Second, make sure to ask your broker who is their aggregator Chances are, the broker is assisted by an aggregator. Good brokers won’t easily be influenced by their ownership structure and will recommend wide loan options from across the market.

A broker can be a great help in obtaining a mortgage and doing a lot of the legwork. As mentioned above, be prepared to shop around for a broker and look for one with experience beyond the minimum qualifications required to practice. Consider the broker’s lender panel and ownership structure. All these will help you choose the right mortgage broker.

If you’re looking for a mortgage broker in Australia, get in touch with Highline Lending to see how we can help! 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.  

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.