Ask a Mortgage Broker

Do you charge fees for your service?

No we do not for residential loans, info from our website;

Free service – unlike some other mortgage brokers, there is no charge for our services*. We are paid by the lender for processing your application with them, which saves them advertising and administration.

* Free Service on all standard residential lending which comprises over 95% of our business. A brokerage fee may apply to some commercial loans.

Thanks...

No problems, If you have any other questions please check our website www.zar.com.au or contact me on 1800180927.

Mark Lewis

if moving from canada will my outstanding credit history assist me in purchasing a home or will i need to establish new credit after gaining citizenship, and if so how long will it take?

bones2

Very good questions and I think I will break it down into a few parts;

Credit History
1. Your existing Credit History from Canada will be taken into consideration with the new credit within Australia in relation to your income being able to support your new debts and your existing commitments. In addition your assets held in Canada will be added to your Assets and Liabilities when assessing the application. I am not aware of any Australian lenders that can secure mortgages against Canadian property so you will need to bring funds over for deposit for the Australian property purchase. Banks will also look at repayment history on debts from overseas normally for 6-12 months.
2. In relation to obtaining a credit history in Australia we would suggest opening account/s with local bank/s as this will create a history with them and can allow higher borrowing levels (Some lenders prefer you to open a Bank Account and Credit Card to establish a credit history). Probably worth having a quick chat with us on this so we can lead you in the right direction on entry.

Time for purchase
2.. This is totally dependant on the application quality and could be as soon as 1 day or over 2 years.
In some cases you may be able to purchase property without citizenship although may require approval from the foreign investment review board (FIRB) http://www.firb.gov.au/content/real_estate/real_estate.asp . There are certain exemptions which you should refer to the FIRB website for details. One of these exemptions which we regularly deal with is;
temporary resident and you are purchasing certain residential property as follows:
• single block(s) of vacant land;
• new dwelling(s); and/or
• a second hand dwelling to be used as your principal place of residence (including if it is going to be demolished first then redeveloped);

In these cases you may be granted temporary residency on entry which could allow you to purchase on entry. At this time lenders may also ask you to contribute a larger deposit for the purchase (Normally 20% of the purchase price).

Some disadvantages of buying prior to having citizenship is that you may not be eligible for Stamp Duty Concessions and First Home Owner Grants. Information on First Home Owner Grants are available at http://www.firsthome.gov.au/ and is state based so hard for me to give you specific information without knowing where you are buying. Information on Stamp Duty is available from the State Revenue office here is a Google search which might help; http://www.google.com.au/search?hl=en&q=state+revenue+stamp+duty&meta=cr%3DcountryAU&aq=f&aqi=&aql=&oq=&gs_rfai=
again this is state based so hard for me to give you specific information without knowing where you are buying.

Please send back any questions or give me a call to discuss specifics.

Kind Regards
Mark Lewis
International M - +61405780870
Aus 1800 180 927

Now for the legal jargon;
NOTE – The details above totally dependent on your residency status and is subject to changes by lenders and the government.
The information above has been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire any of the financial products mentioned on this forum or to transfer your personal business to Zar Mortgage Brokers, consider whether that is appropriate having regard to your own objectives, financial situation and needs.

Just another quick question. I am thinking of selling my current property before purchasing another can you please explain what options I have? I have been told I can use portability but do not really understanfd how it works, please explain. Thanks Kate

Firstly you really need specific advice on your situation so I would suggest speaking with us in detail or speaking with your lender or solicitor.

Again I will break this one up as there a few options depending on how and when settlement on the purchase and sale take place.

Portability - Mainly used when the purchase and sale of a property happen at the same time or settlement of the sale happens first*.

Same time portability
Some Lenders offer a ‘portability’ option, which means that should you wish to move home, you can transfer the loan to the new property. There may be some conditions and fees attached to this option and, depending on the value of the new property, you may be required to repay a portion of the loan. Normally portability can only occur with simultaneous settlements meaning the sale and purchase of your properties happens at the same time. This means your loan is not closed so you may not pay Exit Fees or Other Fees.
*Delayed Portability
With some (not many) lenders you can settle on your sale first and then purchase at a later time (Normally restricted to 90 days and subject to lender approval). Normally after you have sold your property the bank will setup a Term Deposit as security for your loan and then draw against this when your purchase takes place, this means your loan is not closed so you may not pay Exit Fees. In this case you will probably have to pay higher government duties but this is dependent on which state you live in and should get advice from the lender and your solicitor.

Bridging Loan - Mainly used when the sale of a property happens before a purchase.

Normally Bridging loans are limited to 90 days and you can't achieve simultaneous settlement, bridging loans are used to cover a finance gap between the purchase of a new property and the sale of an old property. e.g. You Sell for $100k with a $50k debt although settlement on that is in June You Purchase for $100k which settles in May, the bank will setup a loan for $150k to complete the purchase on the new property and then when the sale goes through reduce the debt to $50k (Or debt level that has been arranged with the lender). This can be expensive with fees and charges if not done correctly so definitely worth speaking with a few lenders for options.

Hope this info helps if you need any more detail please give me a call.

Kind Regards
Mark Lewis
M - 0405780870
P - 1800 180 927

Now for the legal jargon;
NOTE – The information above has been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire any of the financial products mentioned on this forum or to transfer your personal business to Zar Mortgage Brokers, consider whether that is appropriate having regard to your own objectives, financial situation and needs.

Had a question from jessedean which I thought I might add to this forum;

QUESTION
jessedean says:
28 minutes ago
I have experienced some issues with clients having pre-approvals with lenders and when it comes to finance clause finance is declined. Do different lenders have different levels of Pre-Approval?

RESPONSE
The simple answer is Yes their definitely are differing levels of pre-approval for each lender. In some cases lenders do not even assess documents sent to them to verify details; realistically these pre-approvals may not be worth the paper they are written on. A few lenders look at the entire application except for valuation on the new property. It pays to have your pre-approval with a lender that does all the work to start with as this will also save you a lot of time and stress once you have located a property.

Good questions Jesse and very appropriate in the current market.

Thanks Mark Lewis
Zar Mortgage Brokers

Home loan demand falls for fifth month

http://www.news.com.au/business/breaking-news/fed-demand-for-home-loans-falls-for-fifth-straight-month/story-e6frfkur-1225852690128

More Questions Please?

To fix or to float? And where do you see rates in 12 months?

JVS,

Very good question and one that we get everyday.

Our Million dollar answer is 'it totally depends on your circumstances'.

We suggest when looking at your rate to look at the type of risk you are prepared and able to take, we can assist you with this. We also suggest considering split rates (Some Variable, Some Fixed) as this can reduce your risk of rate rises.

Timing your switch to fixed or variable is important we suggest discussing this with your broker. Some aspects to consider are the costs of funding as if this goes down it could reduce fixed rates in an increasing variable rate market. You must also remember that variable rate movements and fixed rate movements do not come from the same source. They are certainly linked, but the drivers are totally different. Variable rates are driven by Reserve Bank policy; fixed rates are driven by the views of those that put their money out to the fixed rate wholesale market.

Some Articles that might point you in the right direction, with advice from economists, be warned though they do get it wrong at times;

Analysts forecast 5.25pc interest rate by year's end amid hot growth numbers
http://www.theaustralian.com.au/business/markets/analysts-forecast-525pc-interest-rate-by-years-end-amid-hot-growth-numbers/story-e6frg926-1225856003808

RBA's minutes offer little reason to hope for rates pause in May
http://www.tradingroom.com.au/apps/view_breaking_news_article.ac?page=/data/news_research/published/2010/4/110/catf_100420_170100_3031.html

Westpac chief expects another rate rise soon – this also includes discussions about ‘cost of raising funds in wholesale and investment markets has increased and it is unlikely to return to levels seen before the global financial crisis’
http://www.abc.net.au/news/stories/2010/04/13/2871649.htm?section=justin

RMBS a cheaper source of home loans, says Wayne Swan
http://www.theaustralian.com.au/business/rmbs-a-cheaper-source-of-home-loans-says-swan/story-e6frg8zx-1225846623863

Fixed or variable?
http://www.smh.com.au/news/domain/australian-capital-territory/fixed-or-variable/2010/03/01/1267291836057.html

Thanks
Mark Lewis
Zar Mortgage Brokers

Now for the legal jargon;
NOTE – The information above has been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire any of the financial products mentioned on this forum or to transfer your personal business to Zar Mortgage Brokers, consider whether that is appropriate having regard to your own objectives, financial situation and needs.

More Questions Please?

More Questions Please?

Zar Mortgage Brokers has been nominated for a Business Award for 2010 and we need support!

Please Click Link: http://www.questawards.com.au/vote.php?paper_id=5
Copy and paste the following;

a. Full Business Name: Zar Mortgage Brokers

b. Suburb: Kedron

c. Category: Professional Services

c. Address: Gympie Rd

d. Phone: 1800180927

Thank you in advance for showing your support!

At its meeting 4 May 2010, the Reserve Bank Board decided to raise the cash rate by 25 basis points to 4.5 per cent, effective 5 May 2010.

http://www.rba.gov.au/media-releases/2010/mr-10-07.html

The May edition of Herron Todd White Property Valuer's 'Month in Review' is now available.

http://www.htw.com.au/Month_in_Review/Month-In-Review-May-2010.pdf

Please remember we offer FREE property sales reports and suburb sales data so you research your property investment or sale. Please send us a comment or email with the property or suburb details so we can return a report.

Thanks for the info...

More questions please...

Zarcomau, thanks for all those detailed answers.

I think traffic on these forums is not exactly heavy, but if you keep providing great answers like you've already done I'm sure you'll get heaps of questions over the coming months.

Keep up the good work.

zarcommau, with the recent consolidation of a few mortgage brokers (Wizard and RAMS bought by Banks) can you tell me what the benefits are of dealing with brokers, wouldnt I be better off dealing with the banks direct and saving on any middleman costs? (I found this thread through Google by the way so your questions are getting noticed)

Quick response as I have to go into a MFAA 12.15 meeting. I would have to disagree (obviously as I am a Broker).

I apologise in advance for any typo’s or grammar issues it was rushed....

Knowledge
The knowledge of a good broker should help a client obtain a product that suits their requirements and be competitive. Specifically we look at clients loans to make sure they are not paying for something they do not and will not require.

Volume
As quality broker firms place between $4 - $10mil per month with banks we are often given deals which are not available to the general public through the branch networks. Normally we can negotiate on clients with total lending above $750k in lending but at times we also get specials for lower valued lending. Unfortunately when a client goes to the bank with their average loan of $450,000 they do not have the same power to negotiate.

Bank Savings
I think the main point is that we do not charge a fee for our services. I understand we are a middle man but we also save the bank advertising, sales staff, follow up work, client retention, etc. In addition a research study showed that approx 70% of new clients to a major Australian Bank were sourced through brokers so we actually help the banks grow a new client base. From my experience in marketing for our firm I know the high cost of gaining new clients. For a consumer this will benefit them as obviously the bank would need to offer something to entice the new business.

Credit History
Another major advantage is that brokers are aware (or should be) of each banks policies so you are not wasting your time and most importantly you do not have declined loans showing on your credit history. Since the global financial credit problems this point is becoming very important as Mortgage Insurers and Banks are now looking harder at loans that have more than 4 enquiries on the credit history in the past 2 years. Each time you apply or have someone else requests your credit history this will add an enquiry. NOTE – if required we ask our clients to obtain their own credit checks (it is free) as this does not add a enquiry.

Service
I think you also have to add something for service and the ability to continue to use the same person long term. Normally with banks you do not speak with the same lender or manager as they have high staff turnover. I have been a broker for over 8 years (prior to that I was with a major bank for around 7-8 years), this month I completed an application for clients I dealt with in the first 3 months of starting business. I have now completed approx 6 hassle free loans for them over the past 8 years and at all times saved them money on what they had researched, plus why would they come back if they didn't see any value. I have also spoken to two other clients this month that I have had for over 4 years who I am assisting with an interstate purchase and investment purchase.

I will look at my response a little later on and probably add a little more. I

Thanks
Mark Lewis, Zar Mortgage Brokers

I have read my previous post in relation to why using a mortgage broker is beneficial to clients and although rushed was not too bad. If you have any further questions please feel free to post a response.

Regards
Mark Lewis

Decline in finance for housing

http://news.smh.com.au/breaking-news-business/decline-in-finance-for-housing-20100517-v7lx.html

I highly recommend the use of a finance broker to everyone who basically isn't a finance broker themselves. Consider Law, sure you can represent yourself but will you get the best outcome possible. I argue probably not. Good realistic points zarcomau.

Thanks Dacey.

Zarcomau,
I have used you guys about 7 years ago in Brisbane and now and looking at buying at home in Cairns. As you made the process very easy the first time, Is it posible to use you again or is Cairns too far? I've heard some horror stories of brokers up here, so your honesty would be greatly appreiciated again.

Mickeeed, Best way to contact us is via phone on 1800180927 and ask for myself or the broker you dealt with or alternatively input your details on http://www.zar.com.au/rate-quote.html for us to return your call.

Thanks Mark Lewis

I am looking at buying an investment property although want to build up a portfolio in future. Do you see any reason why I should use different lenders for each property?

Kate, thanks for the questions. I will summarise below;

What are some of the benefits of using separate lenders?

1. Some lenders have a maximum loan amount per client or per security so you may be limited to borrowing $1-2 million dollars with one lender. This is not the case with all lenders so get some advice of a broker.

2. Separating lenders can reduce your risk of the bank being able to go after your own home. Most lenders will be able to chase other assets if you go into bankruptcy though.

What is the disadvantage of using separate lenders?

1. Lenders these days are offering large discounts for loans above $750,000, so if you keep all your loans with one provider you or your broker will probably be able to negotiate a higher discount

2. In the past separating lenders may have allowed higher loan amounts, these days it is probably not the case as most lenders assess other bank debts at a higher rate.

There may be some advantage with a few small lenders as they assess the existing debt at current repayments. Could be interest only repayments which can greatly reduce the commitment.

TIP – speak with a Mortgage Broker as we will be able to run through the above very easily and add specific advice for your situation.

Mark
www.zar.com.au

We have a lot of people looking at NRAS properties at the moment and have some great info. Please give us a call or email if you are looking for details.

Mark,

From all the press out there about the banks post global financial crisis, do brokers feel like there is a lack of competition amongst lenders? I do remember years ago there were so many more non-bank lenders as John Symonds would say "to keep the banks honest". Are brokers feeling loved or do you have little choice in where you can source funding?

JVS

Great question, my thoughts are that prior to July last year competition had left the market and some of the smaller players did not have access to funds for lending. Over the past few years some of the banks increased margins and reduced payments to brokers which had negatively affected clients and increased banks margins. Fortunately for the Australian consumer the NAB/Homeside stayed close to the Reserve Banks increases to cash rates, others increased well over the Reserve Banks increases. This has created a 0.19% difference between some of our major lenders standard variable rates, I expect this margin to reduce in future. In addition NAB/Homeside has offered some addition discounts for lower equity positions which the other major players are only starting to offer to compete. Does this mean everyone should use NAB/Homeside, probably not as the others are now starting to offer deals which better the offer and at times NAB/Homeside can have delays with loan processing which can cause issues. I also feel that as international economies recover (which hopefully they do) the cost of funding will reduce and the Australian dollar may reduce which will create competition and international players will invest. I think this time that ‘NAB/Homeside has kept the Banks REASONABLY honest’. I know I sound like a NAB/Homeside supporter but to be honest less than 15% of my client book is with them.

Thanks again for the question
Mark Lewis

More questions please.

Great Posts and info, Thanks...

A few things I have recently assisted a client with for a first home purchase;

1. Helped them save $5,000 on the purchase price by providing property data and advice on negotiations.
2. Showed how to save $5,000 on Mortgage Insurance.
3. Negotiated a better home loan rate if they reduced the loan amount, In addition showed them the loan policy of another lender we were not eligible for who had... a slightly better loan rate.
4. Showed how to save $300-400 on Conveyancing Fees.
5. Communicated and helped out with all steps of the property purchase.

I am happy to help you, please call on 1800180927 or email [email protected] www.zar.com.au