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Frequently Asked Questions

What is my borrowing capacity?


This should be the first and very important question that we have to ask ourselves, how much can I borrow? After calculation our

come in fund and going out fund, we can get clear picture and know how much you can borrow to purchase a property. While determining how much you can borrow banks and lenders mainly look at:

  • Credit card limits, Car loans, personal loans
  • Income and types of income e.g. full-time, part-time casual, contract,
  • The size of the loan compared to the property value ( LVR )
  • Number of dependents and their age
  • General living expenses, and
  • Existing asset position (Client contribution towards the loan)


To increase borrowing power

  • Pay off ( or decrease ) and close any credit card & other current liabilities if possible
  • Start saving by decreasing miscellaneous expenses
  • Try to find the bank which does not calculate existing mortgage with same assessment interest in proposed loan.



Should I find a property or get approved for a home loan first?


We recommend that you get a Pre-approval before hunting for a property. This will give you peace of mind that you have a loan approved as well as knowing how much you need to spend without exceeding your budget.



What is Loan to Value Ratio (LVR)?


It is a risk assessment ration that banks and lender use before funding. It is calculated in following way.

LVR = Borrowing loan amount / value of the property



What is lender mortgage insurance (LMI)?


When you borrow more than 80% of the property value, the lender will seek mortgage insurance to protect the lender from losses. Mortgage insurance provides coverage to the lender NOT to the borrower. It is a one-off payment and can be accumulated in loan amount itself, talk to Laxmi Home Loan Team to get a clear idea.




What is Mortgage Protection Insurance?


This is an insurance policy to protect the borrower against unforeseen circumstances such as unemployment, death, illness or injury. Talk to Laxmi Home Loan Team to get a clear idea.



What documentation do I need to apply for a home loan?


To get quick, easy and hassle free approval you will need to supply the following:

  • A copy of Driver's License, which as current address on it ( or current address )
  • A copy of two most recent payslips ( last two years Group Certificates )
  • Recent statement for all savings accounts
  • Recent statements for all credit cards, personal loan, car loan, etc. if applicable of all applicants
  • Last 3 months rent statement of current property ( if applicable )
  • Contract of sale (if property finalised – not required for pre-approval)
  • Rent appraisal from Real estate agent – if investment property finalized

And require more document depending on the situation, talk to Laxmi Home Loan Team to get a clear idea



How long will it take for my home loan to be approved?


Most financial institutions will grant you one of the following but depend on the client’s situation.

  • A pre-approval within two to three business days which will allow you to shop around for a property.
  • A conditional Approval within two to three business days.
  • A formal (unconditional) approval within two to seven business days depending on the valuation of the property.


How long will my pre-approved home loan last for?


Generally, a pre-approved will last for three months. Beyond this time most lenders will wish to re-confirm client’s details like payslips.


What is the process for self-employed? / What documentation do I need?


If you are Self-employed, you can still apply for a home loan:

  1. To a full financial documentation loan, a self-employed person will need to supply the following to verify their income:
     Full financial information for the past two years including Personal and Company Tax Returns, Profit & Loss Statements, Balance Sheets, ATO Assessments and Tax Portals.

  2. A Low financial documentation loan, Self-employed person will need to supply the following to verify their income:
  • At least one Borrower must be Self Employed.
  • An Executed Declaration from all Borrowers.
  • BAS statement and/or bank statements may also be required.



I'm not an Australian resident or citizen I hold visa like 457, 489, can I apply for a home loan?


Yes you can, providing you obtain a Foreign Investment Review Board approval. For full details you can visit the Foreign Investments Review Board website at: www.firb.gov.au



Can somebody buy a property with someone who s/he not related to?


Yes, s/he can purchase a property with another person.



Should I find a property or get approved for a home loan first?


We recommend that you get a Pre-approval before hunting for a property. This will give you peace of mind that you have a loan approved as well as knowing how much you need to spend without exceeding your budget.



Can I use a guarantor to help get my loan approved?


You can use a guarantor provided they're a Spouse or a Family Member. They can assist you with a Guarantee over Security or act as an income Guarantor. The rules for this do tend to vary according to the situation and the lender, it is best to talk with Laxmi Home Loan Team to get a clear idea

Can I make lump sum repayments, if I take a fixed rate loan?


Yes you can but the lender will apply penalty on early repayment. Talk to Laxmi Home Loan Team to get a clear idea.



Will I be penalized if I make extra repayments on my variable loan?


We recommend that you get a Pre-approval before hunting for a property. This will give you peace of mind that you have a loan approved as well as knowing how much you need to spend without exceeding your budget.



Can I have a combination of a fixed and variable home loan?


Yes, you can have a combination of fixed and variable rate facilities.



I have a default; will I get approved for a home loan?


Depending on what the default is, who lodged it and how much it is for, you may be considered for home loan approval, talk to

Laxmi Home Loan Team to get a clear idea.


What is offset account?


We can say offset account as an interest saving account. When we put extra money in our offset account, we don’t have to pay interest on that balance, this will reduce the mortgage interest charged accordingly. So you might have a $200,000 loan and $25,000 in your offset account. Because of your offset account, you will only be charged interest against $175,000. If we manage to have a decent amount of money in your offset account, we can effectively cut years and thousands of dollars from your home loan.



Which is better, redraw or offset?


Both account have its own benefits, following is one simple example…

  • You may wish to purchase a property to live for the next two to three years and then convert it into an investment property loan. In this instance, we would recommend an Interest Only loan with an offset account.
  • If you plan to live in the property long term and aren't looking to purchase another owner occupied property then either redraw or offset would be suitable. Talk to Laxmi Home Loans Team, to get a clear idea.


How can I make loan repayments?


There are a number of ways that you can make repayments to your loan:

  • Direct Salary Crediting
  • Direct Debit facility
  • Internet Transfer


Will I need a solicitor?


You can choose to get a Solicitor or Conveyancer to assist you with the purchase of a property but we highly recommend getting professionals advice.

I already own a property; can I get my equity out to purchase another property?


Yes, you can but we need to do the valuation of the property of the property to get an idea how much we can top up on our existing loan. It is easy to do top up, if our LVR is up to 80%. If it exceeds, we need to pay LMI, however, if we remain with same lender and if we have already paid LMI while borrowing previously we get discount on it. Talk to Laxmi Home Loans Team to get a clear idea.

What is Stamp Duty?


Stamp Duty is payable on purchases of properties. There are two different types of Stamp Duty:

  • Stamp Duty on the Transfer of Title, which is charged by state governments and paid by the purchaser.
  • Stamp Duty on the Mortgage - this duty has been abolished for most owners occupied and investment property loans but you may be required to pay it on other types of loans. Stamp Duty varies by state to state. The information on Stamp Duty or eligibility for an exception by state is available on the following websites:

    NSW - www.osr.nsw.gov.au

Why Refinance?


Save on Interest
But firstly why refinance? Well more often than not, it’s to save money on interest. Interest rate is often the number one reason borrowers refinance. Particularly these days, because many of us are highly leveraged in terms of the amount we owe. If this is the only reason you are looking to refinance then it’s a good idea to approach your current lender to see if there is anything they can do to help, it may save you time and energy. Identifying a better rate will come from research in the market. But remember this is only part of the equation. You may have the lowest rate in the market, but if the rest of the package is costly or inflexible, it may not be best deal for you.


Getting a better overall deal

Getting a better overall deal. Getting the right home loan to help you achieve your goal should be a priority. But first you need to set those goals and match the loan to help you reach them.

Apart from interest rate, some other things you may need to consider include: - Low Fees: low or no monthly or annual fees.

  • Loan Features: The right features. Some loans come with redraw, offset account, line of credit and online access. Depending on how you operate your loan and indeed the purpose, would determine what features you need.

  • Flexibility: The right amount of flexibility. Well additional and lumpsum repayments are a must for any variable loan arrangement. Access to move to a fixed rate or interest only payment option can also be useful.

Other reasons to refinance can include preparing for immediate or future projects. For example: Home Renovations

Renovating your home, it’s common practice to combine the need for additional funds to renovate your home with the renovation of your home loan.

Property Investment

Creating wealth through investment property. Accessing the equity in your home to purchase an investment property can be a great way to build wealth over the longer term. If this is part of your financial future, it’s important to structure your new loan arrangement effectively and efficiently.

Family Circumstances

Changing circumstances. Whole life is full of change. For example starting a family, a significant pay increase or the loss of an income temporarily can prompt a review of your financial situation and perhaps the refinance of your loan.

Consolidating Your Debt

Consolidating your debt. When credit cards, car loans or personal loans get out of hand, consolidating all debts into your home loan can help you pay those debts off sooner. However, rolling short term debt into long term debt can mean you pay more over time. So make sure you structure your repayments appropriately to maximise the benefit and remember don’t fall into the trap of letting short term debt get out of control all over again.

Better Service

Quality service and guidance. A quality lending professional can make all the difference when it comes to saving you money on interest and paying that loan off sooner. Look for a lender you can have an ongoing relationship with. One who will look for ways to structure your finances according to your goals and provide you with strategies to achieve them.


Refinancing Costs

Exit Fees: But before you do anything relating to refinancing, you need to understand whether there will be any costs involved in exiting your current loan arrangement. This cost will be determined by how long you have had your current loan and the type of facility you have. So please ask that question first.

Establishment Fees: There will also be costs involved in establishing the new loan and these could vary from lender to lender.

Whatever you do, remember that when choosing your next home loan, you need to ensure it ticksall the boxes in relation to interest rate, fees, flexibility and of course service. Don’t work hard for your home loan. Let your new lender and your new loan do the work for you.



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