Helpful tips

Your mortgage broker is on hand to answer any of your questions relating to home loans and property purchase. Check out our list of tips below to get started.

Your top property FAQs answered

  • What does LMI do?

    Lender Mortgage Insurance (LMI) is designed to protect the lender in case of mortgage default and is required if the buyer has less than 20% deposit and has no guarantor. Finding a guarantor removes the need to pay for LMI which can cost thousands of dollars.

    Read more about LMI here.

  • How would I cope with a future rate increase?

    Many prospective buyers and current owners are not prepared to deal with rate changes and are not up to date in reviewing their loan.

    However, it's important to always keep on top of the rates you are paying to make sure you are getting the best deal and consider how rate changes may affect you.

    Reviewing your home loan at least annually is recommended - think about seeing a broker even if you aren't planning to refinance to make sure you have the best deal for you.

    Find out more about our free Home Loan Health Check.

    LMI opened the door to our dream family home sooner, rather than wait to save the required deposit.

    Two in five first home buyers don’t understand what Lenders Mortgage Insurance (LMI) is but for Mortgage Choice customers, Lenka Mrkvickova and Miro Mrkvicka it opened the door to a dream family home on the Gold Coast.

    After having rented in Mudgeeraba, on the Gold Coast, Lenka decided it was time to buy a family home. Upon seeing a number of open homes, she fell in love with a two-storey townhouse in a gated community complete with a pool and tennis court.

    Luckily the home was within their price range and the couple felt they would not be stretching themselves too thin with loan repayments.

    “We decided to see a mortgage broker as we had no previous experience with buying a property and we felt that discussing our options with a professional was the right choice for us”.

    The couple knew before speaking to the broker that they may need to use LMI to secure their loan and allow them to get into their home now rather than wait to save the required deposit.

    “The entire process was very positive and our broker calculated in LMI, so they could let us know what our options were,” said Lenka.

    The broker kept Lenka and Miro in the loop every step of the way, all she needed to do was provided some documentation and the team did all the leg work.

    Lenka says they chose not to go straight to a lender as they are too busy working and juggling busy lives, and felt it would be too much work to assess different lenders policies and products themselves.

    “We didn’t want to take their chances by going it alone, and preferred to speak to someone qualified who had industry experience who would maximise their chances of a home loan approval”.

    Top tips for property buyers

    If you haven’t saved a sufficient deposit that amounts to 20% of the purchase price consider engaging a guarantor or paying Lenders Mortgage Insurance (LMI), to help you get into the property market.

    Remember that LMI protects the lender not you the borrower, so be sure to research the ramifications should you not be able to keep up with your mortgage payments.

    Don’t put off financial decisions about how much you should be saving or investing, make your money work harder for you now.

    Take control and consider how you are going to pay off your debts and build your capital.

    Mortgage rates are changing all the time, so keep on top of your home loan interest rate to ensure you get the best deal.

    Consider how rate increases may affect you and undertake an annual review of your home loan - it could save you thousands of dollars a year.

    Build your financial knowledge by researching on the internet or seeking independent financial advice.

    Try using an online tool or app to track your finances and establish goals.

    If you plan to put your property on the market in the near future, consider renovating your kitchen or bathroom just prior to sale, to create the greatest financial gain.

    Stick to a budget and don’t get swept away by emotion while renovating.

    Remember renovations are stressful and can test any relationship, so consider hiring professional tradespeople.

    Private treaties are an important alternative to buying or selling property at auctions so make sure you explore your options and find out what works for you.

    Remember to do your due diligence (building & pest inspections) before auction day - it’s too late once the hammer falls.

    Be prepared to make sacrifices to get into the housing market, including budgeting and savings schemes, coupled with moving to affordable suburbs or smaller properties.

    Consider all your options such as engaging a guarantor for your deposit, or paying Lenders Mortgage Insurance to make up for the shortfall on your 20% deposit.

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