Home Loan Basics [Mortgage Explained Simply]
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- เผยแพร่เมื่อ 15 มิ.ย. 2024
- Hunter Galloway - Home Loans Made Easy! If you're looking for a mortgage broker and live in Australia, we can help!
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www.huntergalloway.com.au/
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1300 088 065
Mortgage Explained Simply
00:26 - What is a mortgage and how does it work?
02:03 - How does a home loan / mortgage work?
03:19 - What does a 95% mortgage mean?
04:27 - What is loan to value ratio?
04:58 - What is lenders mortgage insurance?
06:18 - What does principle and interest mean with mortgages?
08:18 - Can I buy a property without a mortgage?
08:45 - How much money should I save before I buy a house?
09:15 - Conclusion.
Topics we cover in this video.
What even is a mortgage. Home loan jargon explained simply. A beginners guide to mortgages in Australia. A mortgage is a residential home loan secured against a residential property. We look at what loan to value ratio is. How the banks facilitate lending.
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This video offers no Legal, Financial and Taxation advice, and the information contained is general and does not take into account your personal situation. The Listener acknowledges, consents and agrees to the viewing of the content presented on the Channel is subject to the full Disclaimer (below) and agrees to be unconditionally bound by this Disclaimer.
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Awesome video. Thanks guys.
Thanks for watching! :)
Another great video, thanks gents.
Thank You! :)
Maybe a video about Pexa & complications with transfers that might come up (Caveats issues with the vendor sides of things etc) would be good.
Thanks for the suggestion Clayton. Will put it on the pad :)
Whats ANZ turnaround time for final approval after valuation?
Full details on their process here
www.anz.com.au/personal/home-loans/tips-and-guides/understand-the-home-loan-application-process/
Typically if all that's required is the valuation report and a conditional approval was already issued then they take roughly 3 - 6 days to complete the approval. But this can vary for many reasons and is a moving target. Your banker or broker will be able to offer your more guidance based on your specific situation.
Hey boys, could you do a farm loan series . Many many different options and I’d love to hear your practical breakdowns. Also in particular do you guys have any experience in setting these up I’d love to get in touch if so. Cheers
Hi Zak, I'm afraid farm loans are outside of our area of speciality. Great suggestion and thanks for watching :)
Same, situation atm. 2 years to late.😮
New follower here
Welcome aboard Arnold! Great to have you join our community.
Why banks accessment is different for broker's application and why they take longer to access as compared to their own direct applicants?
Hi Habib,
Each lender differs so vastly and is really hard to answer this question. But in short it really depends on the banks application process for a bank vs broker. This will dictate if the process is quicker, slower or the same going through to a broker or direct to the bank.
To complicate matters further, lenders offer brokers status. So for example if you're considered a "premium" broker (metric such as submission quality, customer service results, and volume is what determines this usually) then whilst a normal broker's turn around time for assessment might be 14 days, a "premium" may only be 3 days. This could mean that it's even quicker than going direct to the bank who sometimes have a similar system too.
Unfortunately there no short answer to this and is multifactored.
All the best.
Hi-Im just curious if anyone have any information on CBA Pre-Approval, is it fully assessed, if it’s reliable?
Thank you
Really depends on how the lender/broker completed the pre-approval for you. If they requested all information upfront by way of income, expenses, assets and liabilities, chances are it’s a ‘firm’ pre approval. Just check whether the only condition is subject to finding a property and valuation.
Anthony Sciano Hi Anthony - Thank you very much for your response, i did provide all the mentioned information above, Just wanted to check if Commonwealth Bank does full assessment for their pre-approvals.
Once again you very much for your time.
Regards
Hi Koorosh, yes CBA do offer fully assessed pre-approvals :)
You initially receive conditional approval - once you find a property, and have made an offer that was accepted and you have provided a signed copy of your contract which is accepted by the bank - that is when you receive your formal approval and proceed to settlement.
Hi Can an Australian PR who stays abroad , buy a home in Australia with bank mortgage , but who doesn't have any credit history in Australia? That is just by paying the deposit , can a PR buy a home on mortgage or loan against property ?
80% of the property value: Most temporary visa holders can apply for a mortgage if they are allowed to work in Australia for at least 12 months. 90% of the property value: Some visa holders may be eligible to borrow up to 90% of the property value if they have a strong income, stable employment and longer term visa.
How are deposits percentages decided upon? When I have been looking at apartments in Melbourne the real estate app claims that nearly all properties require a Deposit worth about $250K.
Deposit percentages and the total deposit amounts required for property purchases are determined by a combination of factors:
Lender Policies: Lenders have their own criteria for assessing risk. Typically, the higher the loan-to-value ratio (LVR) - meaning the larger the loan amount relative to the property's value - the riskier the loan is for the lender. Lenders might set minimum deposit requirements to manage this risk.
Regulatory Environment: Regulatory authorities, such as the Australian Prudential Regulation Authority (APRA) in Australia, can influence deposit requirements by setting guidelines for banks to ensure financial system stability. They might encourage banks to have tighter lending standards, especially if there's concern about a property bubble or excessive household debt.
Property Type & Location: Some property types are seen as riskier investments. For instance, off-the-plan or high-density apartment purchases might be seen as more risky compared to standalone houses in established suburbs. Lenders might require a larger deposit for these riskier property types.
Market Conditions: In a hot property market, there might be more competition among buyers, potentially leading to higher prices and possibly larger deposit requirements. Conversely, in a buyer's market, where demand is lower, deposit requirements might be more flexible.
Buyer's Creditworthiness: Lenders assess the creditworthiness of borrowers. A borrower with a strong credit history, stable employment, and a good savings record might find lenders more willing to offer a loan with a lower deposit. Conversely, those deemed riskier might be asked to provide a larger deposit.
As for the specific situation in Melbourne you mentioned, a $250K deposit might be related to the higher property values in certain areas of Melbourne, especially in prime locations. If properties are priced at, say, $1.25 million, then a $250K deposit represents a 20% down payment, which is a standard deposit amount often recommended. However, the actual deposit required can vary significantly based on the factors mentioned above.
If you're finding that many properties seem to have a high deposit requirement, it might be beneficial to work with a mortgage broker, like Hunter Galloway. A broker can help navigate the lending landscape, potentially finding loan options with lower deposit requirements or advising on strategies to meet these requirements.
- If i do not pay my monthly payment on time, do i get charged a late fee?
- Also, what sort of risks is the bank taking e.g. if the property is possessed by the bank but the value of the property has gone down, how do they recoup the money lent if they could not sell the house for high enough in the market? Meaning, do the banks share in any losses which may be incurred or will they only make a positive cash flow?
- Who possesses the title during the mortgage? The bank or the borrower?
Thanks John, all great questions and might be worth checking out: consumeraction.org.au/resources-and-toolkits/my-house-is-being-repossessed-what-can-i-do/
Can a permanent resident who has been in australia for only three months and working full time get a lender if he or she has 10% deposit for a residential mortgage
Thanks Jane, they sure can!