What is an offset account?
An offset account is a transaction account linked to an eligible home or investment loan. The money you have in this account offsets the amount you owe on that loan, and you'll only be charged the interest on the difference. This means the more money you have in your linked offset account, the less interest you'll need to pay on your home loan.
Why should I use a mortgage broker? How much does it cost?
A mortgage broker is a type of financial adviser who specialises in helping people find a home loan. Hobart Home Loans' services are offered free to our clients, as we are paid on a commission basis by your chosen lender.
A mortgage broker is essentially a conduit between the lender (usually a bank) and you. Their first job is to assess your financial affairs, put together a picture of your credit-worthiness, and help you determine what type of home loan will be right for you. They then offer you a variety of home loan options from the panel of home loan lenders they act for.
Mortgage brokers generally offer lending products from a number of different financial institutions. Because they have access to numerous products, they will almost certainly have access to something that suits your needs and they can spend the time with you to understand what your goals are, to explain the options, and to help you with the paperwork.
Why should I refinance?
You’re probably already aware that a refinance can lower your monthly payment. However, a lower interest rate can also allow you to more quickly build up equity and pay off your loan balance. When you pay your mortgage each month, look at your statement carefully. Because your mortgage is amortised over a long period of time, typically 30 years, interest payments make up a significant chunk of the monthly payment, particularly during the first ten years of your loan.
When you refinance your mortgage to a lower interest rate, the amount you pay in interest will go down. Moreover, if the term of your new mortgage matches how many years remained on your original mortgage, the amount you pay toward principal will go up. If you can afford it and don’t have other high interest debt, a good strategy is to direct the amount of money you save from a refinance toward extra principal payments. In this way, your monthly mortgage amount doesn’t change, but you can pay off your home much faster.
How much should my deposit be?
The Big Four banks are generally willing to finance home purchases of up to 95%, provided you have a very strong employment history and savings history and evidence of genuine savings. The loan amount will also strongly influence the lender’s decision.
Non-bank lenders are also offering up to 95% of the property value. They may also add an extra 2% to help cover lenders mortgage insurance (LMI) capitalisation. This means the borrower can get a 95% loan and then add the cost of the LMI to the loan.
For example: In order to purchase a home of $400,000, you could access a 95% loan of $380,000, meaning you’ll need to provide a cash deposit of $20,000. However, you can add the cost of LMI of to the loan amount (up to $8,000), which brings the total loan up to $388,000 or 97%.
Ultimately, it doesn’t matter whether you’re looking to buy for investment purposes or for your own home - advice from Hobart Home Loans can help boost your chances of approval.
How do I calculate stamp duty?
Stamp duty is payable on nearly all home purchases. It is a tax on the sale of property and shares and covers the costs of changing the title of the property and ownership details. By knowing how much you will have to pay in stamp duty, you can better plan for the expenditure of finalising the purchase of your home.
The amount of stamp duty you pay is determined by the state or territory that you live in, the amount you pay for the home and the type of property that you are buying. Use our Stamp Duty Calculator to get an idea of the amount of tax you may have to pay when buying your home.
How long will the process take?
Your first appointment with Hobart Home Loans will take approximately 1 hour. This is so we can gather all your needs and requirements information in order to provide you with the best options tailored to your situation, and to ensure you have a solid understanding of the home loan process.
You can download our forms online to complete and bring with you to your appointment with Hobart Home Loans!