You don’t necessarily need to refinance your existing property to access your equity.   However, it may be optimal to refinance your property.  Ultimately that will depend on the offers you have in front of you.  We’ll compare your existing lender’s offer with external lender offers and you can decide what’s better for you.

The simple answer is ‘yes’.  The realistic answer is ‘it depends’.  There are strict rules around Limited Recourse Borrowing for Self Managed Super Funds.  Your super fund will have to have enough balance to provide a minimum 20% deposit plus government costs.  The fund will also need to retain some immediate balance after the purchase as required by the lender to ensure your fund can maintain its commitments.  Quora Financial  will help you navigate through the complexities of SMSF Lending.

There are numerous borrowing calculators accessible on the Web.  They provide a ‘rough’ indication of your borrowing capacity but there are pitfalls with them.   Many variables need to be taken into account when calculating your borrowing.  These include but are not limited to the nature of employment, variable income such as Overtime or Commission, your outgoings and lender policies.  We’ve barely scratched the surface.  It’s necessary to seek professional advice from a broker who can test numerous lender calculators.  Quora Financial is here to help. 

That will depend on your situation.  Use the following as a guide.

If you’re an Owner Occupied First Home Buyer entitled to a Federal and or State Government scheme, you could purchase with a minimum 5% deposit.

If you’re purchasing an Owner Occupied Property and are not a first home buyer, you’d need a minimum of 5% deposit plus government costs including Stamp Duty.

If you’re an investor, you will need a minimum of 10% deposit plus government costs including Stamp Duty. Some exceptions apply.

As always, each solution needs to be tailored to the individual.  Quora Financial can help. 

Lenders Mortgage Insurance (LMI) is insurance that protects the lender from losses incurred by a mortgage going into default and a property having to be sold.  LMI is applied to loans where the Loan to Value Ratio (LVR) is above 80%.    The higher the LVR, the higher the cost to the consumer. Lenders will generally fo up to a maximum of 95% LVR inclusive of LMI for Owner Occupied Loans.  90% LVR for Investment Loans.

The customer will pay the LMI either from their own resources or more commonly by adding the LMI on top of the loan and paying it back over the loan term.

LMI is not evil, it gives the lender confidence to lend to you now so that you can start living your dream now rather than in a far distant future.

We’ll advise you on how to minimise LMI wherever possible.  Quora Financial is here to help.

There are several State and Federal Government Schemes designed to assist first-home buyers entering the property market.  State Governments offer First-Home Buyers Stamp Duty discounts for properties up to a certain amount.  For example, in Victoria, First-Home Buyers pay ‘Zero’ stamp duty for purchases up to $600,000.00.  Stamp Duty ramps up to full stamp duty between $600,000.00 and $750,000.00 purchases.

For more information about your state’s offers,  click on the following links.

Victoria:     VIC SRO

NSW:           Revenue NSW

QLD:            QLD SRO

SA:                Revenue SA

WA:              WA Govt

TAS:              TAS SRO

ACT:             Revenue ACT

NT:                NT Govt

The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible home buyers to buy a home sooner. It is administered by Housing Australia on behalf of the Australian Government.

Under the FHBG, part of an eligible home buyer’s home loan from a Participating Lender is guaranteed by Housing Australia. This enables an eligible home buyer to buy a home with as little as a 5% deposit without paying Lenders Mortgage Insurance.  Qualification criteria apply.

To find out if you qualify, go to Housing Australia.

If certainty over repayments is important to you, then a fixed loan may be your best option.  Beware that as the name suggests, fixed loans are not flexible and will incur fees if you need to break the loan by selling your home or trying to refinance.  You also have limited ability to make extra repayments with a fixed loan.

If paying your home off sooner is important to you then a Variable Interest Rate loan may be your best option.  You can make unlimited extra repayments and there are no break costs if you need to sell or would like to refinance.  Beware that a with variable loan, the interest rate may move up or down affecting your repayments positively or negatively.

Often a client will choose to split their loan if there are attractive fixed rates on offer.  That way they can pay the variable portion off sooner while still having the certainty of the fixed loan portion repayment.

There is no ‘one size fits all solution’.  To discuss what suits you best, talk to your Quora Financial Advisor.

If you’re focusing on your immediate investment holding expenses and cash flow, then interest-only options may work for you.  As the name suggests, your repayment obligation to the bank is for the interest accrued every month which is calculated daily based on the balance of your loan.  Beware that the overall interest expenses would be higher over the full term of the loan if you start the loan as an interest-only option rather than a principal and interest.

If you’re less focused on cash flow and more focused on debt reduction and paying your loan off steadily, then a Principal and Interest Loan would suit you.  Beware that you’re responsible for the full monthly Principal and Interest repayment based on the initial loan amount and loan term.  The repayment does not reduce if you pay a lump sum or hold significant savings in your offset account.

Choosing between Interest-Only and Principal and Interest options can be complicated.  It’s always worthwhile seeking advice.  Let Quora Financial help you.