Backyard barbecues should come with an advice warning…. Something along the lines of, “the advice you have received at our barbecue, may be fictitious, incorrect, non-applicable or generally not right for you”. Like a game of Chinese Whispers, the truth is often lost in the handing on of the message.
I have been a Mortgage Broker in Townsville 15 years and have heard some interesting misconceptions.
So here are a few that I have heard recently that have almost drastically changed the course of someone’s life. Thanks goodness they came to see us at Mortgage Choice in Townsville.
“You need 20% deposit to buy an investment property now” This would be the one I have heard the most recently. While certainly the investment landscape has changed, and it is an evolving space, you can by an investment property with 5% deposit and enough to cover purchase costs. If you have equity in an existing property, you may not need a cash contribution at all. You can also consider using a Guarantor. If you have a family member that has equity in property, his could be a great option as well. Particularly for First Home Owners looking to get into the market.
“I have just started a new job, no one will give me a loan” This is sometimes true. Often though, if you have a history in the industry where you have just commenced, you may be eligible sooner than you think.
“I won’t need mortgage insurance, I have it in my Super” This one is a confusion of a few different things happening at once. Mortgage protection insurance and Lenders Mortgage Insurance (or LMI) are different beasts, but are often thought of as the same thing.
Mortgage protection insurance basically protects your home loan should you lose your income or job unexpectedly. Whilst not compulsory, it is highly recommended. The biggest asset you have is not your home, it is the income that allows you to keep making the payments on your home, and stop it from being sold off by your lender.
Lenders Mortgage Insurance (or LMI) is for the lenders benefit. It can be paid as an upfront cost or in some cases can be added to your loan amount. LMI protects the lender against loss, should they have to sell your property to recover your debt. You can avoid this one by having 20% deposit typically, in some cases 10% or 15% will see you not pay mortgage insurance. Depending on a range of different circumstances.
Hope that has cleared some myths for you. If you have any others you are not sure of, feel free to give us a call on 4721 6033 or email me at firstname.lastname@example.org