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LVR is the loan to value ratio. Lenders use this to determine their risk exposure when deciding whether to lend. For example, if a property you wish to buy is $100,000 and the loan is $80,000, then the loan to value ratio is 80%. Generally, lenders prefer a lower LVR as it lowers their risk. However, lenders will go up to 99% LVR where lenders’ mortgage insurance is available, also known as LMI.

LMI stands for Lenders Mortgage Insurance, which is applied when loans exceed an LVR of 80% or more. This LMI charge is applied on top of the loan amount so it does not come out of your cash you have to put forward but it will increase the size of your loan by a relatively small amount. LMI is often seen as a negative thing however, it is an enabler. If it weren’t available, then many people today would not own their own home.

Reduce your credit card limit.

Lenders look at the likelihood that you might default on the repayments. They look at a number of factors including your credit history, job security and your credit card limits.

In the eyes of a lender, the higher your credit card limit, the more chance you have to get into financial difficulty. So, to increase your borrowing limit, get rid of any surplus cards, and reduce your credit card limit to the absolute minimum you need.

Fixed rate terms last for a set period of time that is prearranged between you and your lender. Fixed rate periods last between one and five years.

When your fixed rate term ends, your loan will usually revert automatically to the standard variable interest rate unless you have provided instructions to refix your loan.

As the end of your fixed rate term approaches, it’s important to plan ahead and talk to your mortgage broker about what your new, or roll-off, interest rate and repayments might be and what your options are.

Repricing with your current lender

Lenders may not apply the lowest interest rate they offer when a loan reverts to a variable rate.

But, you can ask for a reprice to a more competitive rate. If you do find a more competitive rate with a different lender, you could also ask your current lender if they can match it.

Refinancing to a different lender

Once your fixed rate term ends, you may be able to refinance to a different lender.

While the interest rate is a key factor when choosing a loan product, it’s important to know the ‘true cost of switching’.

You may see tempting cashback offers from lenders, or lower rates advertised, but there are a myriad of fees and charges involved in setting up a new loan that you will need to consider.

If your loan-to-value ratio (LVR) is above a certain limit – usually 80% LVR – you may be required to pay Lenders Mortgage Insurance if your refinance.

We can help you understand what it will actually cost you to change lenders, and how much you could save.

Entering the property market is no easy feat for a first homebuyer, and it’s common for parents to want to help first homebuyers either through gifting funds for the deposit, or by acting as guarantor on the loan.

Before taking the plunge however, it’s crucial to be aware of the implications involved. Here are three questions to ask yourself to see if a family guarantee is right for you.

  1. Am I financially fit to be a guarantor?

The first thing you should be certain of is whether you are in a financial position to pay off the loan if the borrower finds that they can no longer do so.

There can be many disruptions to an income, such as loss of employment or a serious accident, and some types of guarantor loans hold the guarantor legally accountable to ensure the mortgage is paid off.

Always get independent legal and financial advice if you’re considering being a guarantor to ensure your financial position is strong enough.

  1. Do the benefits outweigh the risks?

It’s no secret that it can take a long time to save for a deposit and by becoming a guarantor you offer the borrower the chance to enter the property market sooner, and in some case even avoid Lenders Mortgage Insurance.

However, any time you borrow money, or a bank places a mortgage over your property, there are things that need to be taken into account. For example, there are certain factors that can put you or your property at risk and your ability to borrow for yourself will also be reduced after offering collateral against someone else’s loan as a guarantor.

  1. Are there other ways I can help without being a guarantor?

If contributing to a deposit is an option, it allows you to provide a little help without needing to put yourself or your property at risk, but there are some extra hoops to jump through if a deposit includes gifted funds.

Gifted funds are not considered genuine savings by lenders. If the deposit is less than 20% of the property’s purchase price, the lender will most likely want to see five per cent of genuine savings from the borrower.


If you’re looking for a creative way to overcome being locked out of the property market by rising prices, buying a house with a group of family or friends may be a solution. It can also be a minefield though, so here’s how to avoid a blast.

While the excitement of banding together in such a life-changing moment can put everyone on a bit of a high, you need to plan for situations in which things might go wrong.

It’s essential you have all been completely upfront from the start about what you want to achieve by purchasing property together, as well as your personal expectations about timelines for purchasing the property, paying it off and selling it; and all of this must be documented in a co-ownership agreement.

Your finance broker can refer you to a solicitor or conveyancer with experience in working on co-ownership agreements, who can advise and create yours and make sure it’s suitable, providing the necessary legal protection for everyone involved.

The big question will be what structure your ownership takes. There are two options: joint tenants and tenants in common. Joint tenancy is the most common ownership structure in Australia, as it is how most family homes would be owned.

However, because friends are less likely to share assets and long-term debts than a couple, and less likely to will their assets to each other, the ‘tenants in common’ model would usually be more suitable for this situation.

Under this model, each person owns a specified share of the property’s value. These shares may be equal, but needn’t be.

So, if you are willing to contribute $500,000 to the price of a property, but your two friends are not quite at that stage and only comfortable contributing $250,000 each, you could own a 50% stake, while they each own a 25% stake. Keep in mind that each stake is in the property’s value, not control of the property. Legally, under this model, each owner has the right to full access to the entire property.

The co-ownership agreement created in collaboration with your conveyancer should set out how the costs of maintenance and insurances are divided, as well as how sale proceeds will be divided.

It should also cover plans for depreciation and capital gains tax, selling a share of the property to another co-owner, choosing tenants or determining rent, selling a share of the property to a third party, and selling the property altogether.

If all purchasers are planning to occupy the property, the agreement should make plans for if one wants to move out but continue their ownership. Under the tenants in common co-ownership structure, the other owners occupying the property would not be obligated to pay rent to the one who has moved out, as long as they are not restricting that co-owner’s access to the property.

As is the case with any property purchase with any structure, each co-owner should have an up-to-date will that specifies who inherits their stake in the property.

There are many more considerations when buying property jointly, so speak to an expert early on to make sure you’re doing it the right way.

When it comes to saving on your mortgage, some of you may not have to look further than your job. If yours is a profession that classifies you as a ‘low risk’ borrower in the eyes of lenders, you may be entitled to special discounts.

Doctors, accountants, lawyers and teachers are commonly eligible for home loan discounts, or particular loan types without fees, based on their professions.

The benefits on offer differ depending on the lender and the industry, it’s also a constantly changing situation. An example of this is the slowing down of the mining industry in 2015, which saw mining engineers lose their ‘in demand’ status and their profession-based discounts.

How the perks work

Simply being in a certain profession won’t automatically save you on your home loan. To qualify you must apply with a lender that offers your profession a special discount and meet that lender’s criteria.

For example, doctors will often need to provide evidence of membership of a certain industry body such as the Australian Medical Association.

Because lenders don’t publish these better interest rates, to benefit from the discounts it’s best to have your broker by your side. Not only will they know which lenders to apply to, they will also assist you with pricing requests and negotiating the best possible interest rate.

If you sell an investment property, you may be required to pay capital gains tax (CGT) on that sale.

What is CGT?

CGT is a tax that you’re required to pay on any capital gain earned on the sale of an asset, such as a property.

CGT applies to any asset obtained after 19 August 1985.

What is a capital gain?

Put simply, a capital gain is made when a profit is made from the sale of an investment, so when the sale price exceeds the original purchase price.

If you sell an investment property for less money than the purchase price, you will have made a capital loss. An industry expert can help you work out your net capital gain or loss.

Calculating CGT

For the sale of a single investment, take the selling price of the property then subtract the amount you originally paid for it, along with any associated costs such as stamp duty and legal fees. The amount remaining will be your capital gain. If you make a loss rather than a gain, you will not be taxed.

You may be eligible for a 50 per cent reduction of the CGT payable if you purchased the property after 21 September 1999, owned it for at least one year before selling, and the property was purchased by an individual, trust or complying superannuation entity.


While any investment properties sold will be subject to CGT, you do not have to pay this tax on every property you buy and sell. Your main place of residence is exempt, as long as you have never rented it out.

You are not required to pay this tax at the highest marginal tax rate – any capital gain obtained will be added to your taxable income and then taxed at the relative margin.

This article is for information only; please seek advice from a tax adviser before making any decisions.

Interest rates are a big factor in each repayment and the total cost over the life of a loan, so staying on top of your current rate, as well as the interest trends across the market, is essential.

By staying on top of interest rates, borrowers can make informed decisions about choosing a first-time home loan or getting a better rate by refinancing.

Interest rate percentages are based on a number of factors – the Reserve Bank, the cost of money on overseas markets, and the general state of the economy. Interest rates don’t appear to move by much when looked at as a simple number, sometimes only a fraction of a percent, but each basis point makes a significant difference to the total cost of a loan, and makes a big difference when you’re working to pay down your mortgage.

When you first lock in a home loan, you’ll choose a fixed or variable interest rate.

A fixed rate does not change over a set period of time, and your payments will be predictable each pay cycle. On the other hand, a variable rate is attached to the market interest rate and will move up and down with the market.

Interest rate calculators are very useful to help you compare rates across fixed and variable loans, and translate the rates into an impact on monthly repayments, loan length and the total cost of a loan.

The best way to keep on top of those movements is to stay in contact with your finance broker. They will be able to help you shop around to find the best deal for refinancing when the time is right for you.

When taking the plunge into the world of home loans and property investment, the challenge often lies in knowing which expert to approach for help. Finance brokers and financial planners, although similar in their professional outlook, cater to different financial endeavours.

Brokers that deal in home loans must be qualified and licensed loan advisers with in-depth knowledge of home loans and options suitable for a range of different financial situations. They negotiate with lenders to arrange loans and help manage the process through to settlement.

Options relating to loans and refinancing can only be recommended by qualified brokers.

In contrast, financial planners assist with anticipating and managing long-standing financial outlook. They help sort through and select options for investment and insurance, with attention paid to retirement planning, estate planning and investment analysis.

Planners take care of more of the long-term, wealth-creation strategy, as well as super and life insurance, and other sorts of wealth protection insurances.

A financial planner’s work is wide reaching and important to your long-term financial health and stability.

There are some situations where it would be best to include both types of financial professional. For instance, if your broker is helping you refinance your loans in order to undertake a financial investment, a financial planner can step in to help you to assess the best investment option for you.

So, the expert you need depends on your situation. For loans, see a finance broker; for investment advice, ask a financial planner. Of course, your broker can always refer you to a planner if you need one.

Preparing a detailed business plan will inform the lender about your business proposal so that it can assess your application as favourably as possible.

  1. Know your numbers

To inspire confidence in you as a borrower, it’s important you are familiar with your key financial figures, even if you don’t prepare your own financial statements. This includes current income, net profit and expenditure.

Include a profit and loss budget, and, if your business is new or you are starting a new business, prepare your personal credit history.

  1. Estimate how much funding you need

Are you looking for funds to help with cash flow and operations on a regular basis, with a larger overdraft limit for occasional use? Or do you need one-off funds to open a new branch or purchase additional equipment?

Prepare an updated business plan to establish all of the factors in your application, including any partners and strategies.

  1. Project your cash flow

You can use this to prepare pro-forma statements, or projections of what your business will make going forward, making adjustments based on past trends.

  1. Provide proof of loan security

A lender will evaluate your risk factors to determine if you and your business are a good investment. Consider the maximum payment you can afford before meeting with your finance broker, who can advise you on whether you should offer collateral or a third party willing to guarantee the loan on your behalf.

  1. Ask questions

Your finance broker will shop around on your behalf to find out what products are on offer. If you’re already a customer with one lender, discounts may be available. If one option is much cheaper, your finance broker will be able to tell you if it carries higher fees or a likelihood of the interest rate changing.


Considering transforming your home from ‘banal’ to ‘brilliant’, but lack the funds to support your makeover? Never fear, we’ve rounded up five home renovation finance options that could help turn your dream into reality.

  1. Equity release/top up home loan

An equity release/top up loan is probably the most common way people borrow money when they want to renovate. It involves borrowing against the current value of your home before any value-adding renovations and in most cases allows you to obtain the funds upfront.

If you own your home outright, you can usually borrow up to 80% of its value.

If you have a mortgage on your home, the amount you can borrow is usually the difference between the balance of the loan and 80% of the value of the property.

For example, if your home is valued at $500,000 and your loan balance is -$300,000, you could borrow $100,000 – making the total loan amount $400,000 (80% of $500,000).

One potential problem is that the cost of your renovations may be higher than the equity you have available. If you run out of funds mid-construction, and if the property is then not in sound, lock up condition, you may have an issue obtaining extra funds down the track.

  1. Construction loan

If you’re planning to completely transform your home and undergo a major makeover, a construction loan may be a good option as you can spread the cost over a long period of time.

With a construction loan, the lender will assess the value of your home after the renovation based on the building plans and you can typically borrow against that value. You may be able to borrow up to 90% of the end value of your home and take advantage of mortgage interest rates, which tend to be lower than credit card and personal loan rates.

 You won’t be given the full loan amount upfront, but usually in staggered amounts over a period of time – these are called ‘progress payments’ and are linked to a fixed price building contract you will have with your builder.

  1. Line of credit

You can establish a revolving credit line that you can access (up to your approved limit) whenever you want.

You only pay interest on the funds you use and, as you pay off your balance, you can re-borrow the unused funds without reapplying if necessary.

However, care must be taken not to get in over your head in terms of serviceability. Make sure you can make repayments on the line of credit that will reduce the principle because your minimum repayment only pays the interest – it will not reduce the loan balance.

Interest rates on this type of product are typically much higher than a construction loan or equity release loan.

  1. Personal loan

A personal loan may be a good option if you’re only making minor renovations.

Personal loans are usually capped at around $60,000, but interest rates on personal loans are higher than on home equity loans and payments need to be made, usually, over a maximum of seven years.

  1. Credit cards

Using credit cards to fund renovations should only be considered if you want to undertake really small projects.

The interest rates are usually much higher on credit cards than mortgages, but for a very small project that extra interest might actually total less than loan establishment fees.

Ensure your renovations are adding value

There are very few exceptions to the rule that your renovations should add more value to your home than they will cost to carry out.

Think about how the money you spend on a renovation will increase the value of your property. For example, consider making changes that would appeal to the majority of potential buyers to help you sell your house faster and at a higher price.

Fixed rate loans

A fixed rate loan is one that maintain the same interest rate over a set period of time regardless of market fluctuations in interest rates.

A fixed rate home loan can offer stability for those conscious of a budget and who want to take a medium-to-long term position on a fixed rate. It can also protect borrowers from the volatility of potential rate movements.

Fixed rates are locked in for an amount of time that is prearranged between you and your lender – this could be a term of one to ten years depending on the lender. Three and five-year terms are generally the most popular for borrowers because a lot can change in that time.

However, fixed rate loans usually come with a few provisos. Borrowers may be restricted to maximum payments during the fixed term and can face hefty break fees for paying off the loan early, selling the property or switching to variable interest during the fixed rate period. Also, you may not be able to leverage an offset account against a fixed rate loan.

Borrowers should consider, and be aware, that at the end of the fixed-rate term the loan will usually ‘revert’ to a variable rate.

Borrowers should talk to their mortgage broker when the end of fixed rate term is approaching as lender offers may not apply the lowest interest rate they offer when a loan reverts to a variable rate.

Variable rate loans

The interest rate on a variable rate loan can change throughout the term of the loan in reaction to market fluctuations in interest rates. The interest rate on a variable rate loan can go up or down.

A variable rate loan may come with features such as an offset account (which can reduce the amount of interest you pay), a redraw facility and the ability to make additional repayments either regularly or in a lump sum.

A variable rate loan can offer flexibility, however, borrowers should consider the capacity to service the loan if the interest rate increased.

A split loan – the best of both worlds

A loan can also be split  – this option allows you to have some of your loan at a fixed rate and some at a variable rate. You can split your loan 50/50 or at a ratio that meets your needs.

Every home loan application is unique, so the time between your first contact with your broker and approval can never be predetermined.

If an application is not completed correctly, you risk delays in approval, or even being declined by potential lenders. There are, however, some things you can do to help the process move quicker.

The most common reason for a delay is a lender’s turnaround time to assessment, especially when some lenders have competitive offerings and experience larger application volumes, but a lack of preparation can cause this delay to snowball.

Be prepared

In order for a lender to assess your capacity to service loan repayments, every financial detail must be taken into account.

Other than the obvious documentation that needs to accompany an application – satisfactory identification and evidence of income by way of pay slips – many lenders will expect to see a reference from your employer, group certificates or tax returns, and records of any investments or shares that you might have.

If you are self-employed, you will need to organise alternative documentation to prove income, such as financial statements relating to the profit and loss of your business going back two years.

Lenders will also want to see bank statements going back a few months in order to track your spending and savings history. Most importantly, you will need to provide the details of your debts.

By having all your documents organised and a savings and repayment plan documented, as well as evidence that you can commit to the plan, you will increase your chances of receiving the loan you are after.

Disclose all information

Lenders want to see proof that you are capable of managing the responsibility of the loan, through steady employment, a good credit history and a debt-free approach to your financials.

To avoid back and forth requests, which can delay your application, ensure your lender has a thorough understanding of you as an applicant including appropriate identification of all borrowers.

Provide all the supporting and necessary documents upfront to your broker, have good, current information on your financial position and convey as much detail as possible in relation to your requirements and objectives as possible.

Your broker will not only need to have your full financial details, they’ll also need to take reasonable steps to verify them.

Skip the valuation queue

Not all applications require a valuation, depending on the property and lending institution and forgoing this step can save a considerable amount of time. You can also save time by having a valuation completed prior to your application, if it’s accepted by your chosen lender, but check with your broker first.


While loan officers work solely for a lending institution and can only offer that institution’s products, brokers can help connect you to the lender best fit to serve your mortgage needs by shopping around on your behalf.

Finance brokers on the other hand are paid commissions by lenders to match borrowers to the right products and can negotiate the lowest rate on your behalf, which is why more than half of borrowers today turn to finance brokers when it comes to finding a home loan.

In order to decide whether or not to provide you with a loan, lenders will generally assess you against five qualities.

  1. Your ability to repay the loan

To establish your capacity the lender will look at your employment history and salary to evaluate whether you have enough cash coming in to reliably pay the loan over time.

  1. How much cash you have up front

Assessing your ability to put down a percentage of the value of the property being purchase up front is standard. The percentages vary, and specialist lenders may approve a 5% deposit.

  1. The property appraisal price

Since the property is used as collateral if you are unable to repay the loan, the lender will value the property. Based on the report, the lender will decide whether the property is worth the loan being approved.

  1. Your financial history

Your credit rating, expenses and debts will help the lender assess your character as a borrower and whether you are worth the risk.

  1. Market conditions

Economic circumstances in the market can influence what interest rate you have access to and whether you need to provide extra security. They can also influence the repayment schedule.


Offset accounts and redraw facilities work in similar ways. They both allow you to reduce the balance of your home loan, and therefore the interest charged, by applying extra money to your debt.

Deciding between an offset account and a redraw facility on your home loan largely depends on how accessible you need your extra money to be.

Redraw facilities

Redraw facilities allow you to deposit spare income into your home loan account, allowing you to redraw a sum equal to the extra repayment amounts in the future.

In the meantime, the extra money paid will lower the amount of interest charged, while still giving you access to your money.

However, there may be restrictions on how much money can be withdrawn and when.

Most institutions only allow redraw from a variable-rate loan, or with limited access from a fixed-rate loan.

It’s important to find out how a loan’s redraw facility works before taking it on, as the fees and restriction attached might outweigh the benefits of interest savings.

Offset accounts

Offset accounts are like savings accounts that function alongside your home loan. You earn interest on the money in the offset account and you often have a debit card attached for simple withdrawals.

For example, if you’re paying 5% interest on your home loan and earning 2% interest on your offset account – with the offset setup, the 2% interest that you earn is coming off the interest you are paying on your home loan.

With 100% offset accounts, you earn interest equal to the interest you are paying on your loan. Rather than earning savings account rates, you are earning home loan account interest rates on the money held within the offset account.

For example, you have $10,000 in your 100 per cent offset account. Instead of paying interest on your $100,000 loan, you are only paying interest on $90,000.

Offset accounts, like many savings accounts, often come with account fees, but the fee may be worth the interest savings and the added flexibility compared to redraw facilities.


Knowing what a property is worth is central to avoiding paying too much for it. It’s about doing your homework, knowing what you want, knowing the market and making sensible offers.

Set a benchmark

Comparing nearby properties that have sold recently is the best way to assess an acceptable price for the property you are looking at and provides a valuable bargaining tool when you are negotiating with a seller or agent. Make sure the properties are comparable, with a similar land size and number of bedrooms, so you aren’t measuring apples against oranges.

Keep in mind current market conditions

The property market is always changing, so doing this research once and sitting on it for a few months will offer little help. Going to open homes and auctions regularly will give you insight into the current state of the market and how much certain properties are going for.

Expand your search

Don’t limit yourself to a particular area or suburb, take a look around to expand your options. You might find your dream property just a couple of suburbs away that still meets all your needs.

Don’t exceed your financial capacity

If you’ll be taking out a loan to purchase a property, it’s a good idea to seek pre-approval before you start making offers.

Aside from meaning that when you do eventually make an offer it will be taken seriously by the seller or their agent, having finance sorted out means that you can be sure of what your stamp duty and associated costs are, and exactly what price range you can consider.

Remember, even if a lender approves you for a particular loan amount, it doesn’t mean you have to accept it – a higher loan amount means higher interest charges over the life of the loan, increasing the total cost of the property purchase. Only ever commit to a loan that you can afford alongside your current income and real expenditure.

When calculating figures for the price of a home, ensure you also budget for maintenance and repair costs, as well as any other expertise you may require in the purchasing process.

Bring in the extra support

You may want to consider using the services of a buyer’s agent, they can help you with things like negotiating a price or bidding for you at an auction.

Self-employed borrowers often come up against the challenge of not being able to present a raft of payslips and tax returns to back up their loan applications, but this need not stop you buying your dream home.

Many lenders offer low-documentation (lo-doc) loans for self-employed borrowers who don’t have traditional payslips and employment records. This means that, rather than the usual documentation you prove your ability to service a loan using bank statements, declarations from your accountant and financial records.

Of course, as with any mortgage application, you must still prove that your income outstrips your spending and you can service the loan. Getting this right is more than presenting a lender with a few quick sums on the back of a napkin – it takes a solid six to 12 months of preparation.

Here are some tips to help:

  • Reduce debt
    Pay down credit cards and personal loans and be sure to lower the credit limits as they are paid down, as lenders assess the total credit available to you as a potential debt level, not just the amount you owe.
  • Speak to a finance broker
    A broker can discuss the how the structure of your business and your taxable income will impact your ability to borrow with you. Finance brokers also have access to specialist lenders that assess applications on a case-by-case basis and tailor their products to self-employed borrowers and contractors, while bank lenders do not.
  • Do your taxes
    Make sure you do your taxes when you should, and always pay your tax assessments on time.
  • Save
    Saving a deposit is obviously important and showing your ability to live within your means and save is as well. This is key to serviceability – you want to show at least a six-month history of high savings and low expenses.

Low-documentation loans do differ from standard loans in a few ways, apart from the application process. Lenders offset the extra risk they are taking by lending to a self-employed borrower or contractor by charging slightly higher interest rates and placing some extra rules on loan-to-value ratios (LVR) and insurance requirements.

Generally, you can expect an interest rate for a low-documentation loan to be one to two percentage points higher than for a full-documentation loan.

Most lenders will also insist on an LVR of no more than 80% – meaning that under no circumstances will they lend more than 80% of the property value, as assessed by the lender.

In cases where the loan amount is for more than 60% of the property’s value, some lenders also require self-employed borrowers to pay for lenders mortgage insurance.


Insurance for something you can’t see or touch, such as your income, may seem strange, but how would you pay your mortgage if you were unable to work?

When considering insurance, it’s common for people to pass it off as a pesky added fee involved in owning a car, running a business or protecting a house against damage. Income insurance, on first glance, can seem like another costly precaution that’s unlikely to prove useful.

However, when you think about how your income facilitates your lifestyle, it’s often at the top of the list regarding things that you can’t afford to lose. Cars and houses can be replaced, but losing an income, perhaps for life, could see both lost.

Income protection insurance covers salary loss due to injury or sickness. Unlike workers compensation, it applies to injury or sickness at any place or time. And, unlike government allowances, it pays in accordance with your earning capacity.

Income protection policies vary regarding their terms and conditions, but usually offer 75 per cent of gross wages for a maximum period. It’s a form of insurance that is particularly important for people who have regular repayments to make against debts.

Having your income insured against the possibility of being away from work, or not being able to earn an income, helps you avoid defaulting on mortgage payments, personal loans or credit cards.

It can be the difference between continuing along within your current lifestyle following illness or accident, or being forced to dramatically change your lifestyle due to an inability to repay your debts.

Before you take the leap into a holiday-home investment, it’s essential that you consider all angles. This means taking your heart out of the equation and giving thought to rental returns.

In fact, location has a great deal to do with the success of your investment property if you will be renting it as a holiday destination.

While it would be great to have a holiday-home investment where you would prefer to travel to, when investing it’s important to also consider what locations and niche markets have good rental returns.

You need to make sure that your property location matches up with market demand. Things to consider are travel time and expense, rent rates, local attractions and activities – particularly those available year-round, not just in peak times.

For example, busier coastal suburbs may offer more consistent rental returns than quieter peripheral suburbs that may be popular only in peak holiday seasons.

Deciding whether the investment holiday property you want will be as lucrative as you think often requires the advice of an expert, particularly for investors who aren’t as familiar with the area as residents may be, so investors would be well served to seek advice instead of taking a gamble.

Investing in property, such as residential real estate, is likely to be a lengthy process and one that usually involves a long-term plan. To ensure you have considered what is required before making the big purchase, we’ve outlined steps you need to take in that process.

  1. Do the numbers

A property investment must be a long-term commitment in order for it to be worthwhile, so the very first step is to ‘do the numbers’ to evaluate your budget, potential constraints and future financial and personal obligations, including the potential impact on family members.

Consider your future as far ahead as you can – remember that you should be expecting to hold the property for a minimum of five to ten years. You need to assess your ability to maintain, or increase, personal income, as well as your commitment and ongoing financial capability to continue to service the investment which will incur other costs in addition to loan repayments.

  1. Obtain professional advice

Once you’ve run the number, you’ll need to obtain professional advice. An investment in real estate is likely to be significant in relation to your current financial position.

Discuss the investment with a licensed financial planner or investment adviser to check if residential real estate is appropriate in your current circumstances. Consider aspects including rental return, maximum capital growth and/or tax effectiveness.

Following that, unless you have cash or other investments that can be converted to cash to make your property investment, the next step is to contact a mortgage broker to help you to secure finance to enable the purchase.

This will give you the opportunity to ask the broker as many questions as needed to alleviate any uncertainty you may have about securing that finance.

Brokers who assist consumers to secure finance for residential property are heavily regulated and must be licensed. They must also hold membership of the external dispute resolution scheme and hold appropriate qualifications, including maintaining continuing professional development. The broker should also hold membership of an industry body, like the MFAA, which triggers a requirement of an additional layer of obligations through compliance with its code of practice.

Next, you need to locate a suitable property. You may want to consider using a buyer’s agent who can assist you in this process – potentially saving you money by disregarding inappropriate properties and concentrating on those that are more likely to deliver the highest return and capital increase to you over time.

  1. Talk to relatives and friends

Talking to friends, family and acquaintances who have already made such an investment, or are currently considering one, can help your awareness of stumbling blocks and potential issues that you might otherwise miss. While any issues you face may seem new, it can help to bounce these off a trusted friend or relative who has been there before.

  1. Collate your information and seek pre-approval

To apply for finance, you will need proof of your current income, employment, and your assets; as well as all liabilities, including debts, loans, rental payment, outstanding credit card obligations and any other payments including buy now pay later commitments.

Collate these and any paperwork that helps support your personal position. For example, if you have been a long-term tenant, get a 12-month tenancy statement that proves your capacity to make regular repayments.

Before applying for a loan, minimise your current debt load, and if possible, reduce the limit on, or cancel, any credit cards you have, as this is perceived by lenders as potential for debt.

It is strongly recommended that you have a fully assessed pre-approval before you start your search. This will allow you to know what your financial limits are so that you can make an offer when you’ve found a property you like.

  1. Treat the purchase as a business decision and commit

While an investment property purchase should be a business decision, not an emotional decision, it is wise to consider choosing a property based on whether you feel like you could live in it.

Also consider what type of properties appeal to the people living in the area – your tenants (or perhaps an owner/occupier you might sell to down the track) are making an emotional decision when they decide where to live.

You also need to make the commitment to ‘manage’ the investment – even if you outsource the day-to-day tasks involved, including locating suitable tenants, collecting rents, paying relevant costs in rates and taxes, and ensuring that the property’s repairs and maintenance are kept up to date.


Rental yield, –the rate of rental income returned against the costs of an investment property, is a great indicator of a property’s investment potential. However, you need to keep things in perspective when you factor it into your decision to purchase property.

Calculating rental yield

A good first step in examining the impact of the rental yield on the investment potential of a property is to recognise that there are two types of rental yields – gross and net – and they are calculated differently.

For property, gross rental yield is calculated by dividing the annual rental income you receive by the property value, and then multiplying this figure by 100.

For example, if you collect $20,800 rent annually ($400 per week) and your property value is $450,000, it will look like this:

  • $20,800 (annual rent) / $450,000 (property value) = 0.0462
  • 0462 x 100 = 4.622
  • The gross rental yield is therefore expressed as 4.622%

Knowing a property’s gross rental yield is a quick way to make a rough comparison of how its rental returns fare with others in an area, but it does not give a full picture of the investment potential a property offers.

Net rental yield, on the other hand, offers a more detailed picture of a property’s rental return. To calculate net rental yield, you also factor in the costs and expenses you incur in addition to your property’s value.

The list of costs and expenses is extensive and can include stamp duty, legal costs, building inspections and recurring expenses such as maintenance and repair work, council rates, and loan interest repayments.

If you deduct $5,000 for annual costs and expenses from the annual rental income in the gross rental yield scenario in the example above, the net rental yield is 3.5%.

Of course, the credibility of net rental yield is dependent on the accuracy of assumptions you make about the cost of repairs, the property’s market value, and the property’s occupancy rate.

A building inspection might reveal dormant issues that will drastically increase future repairs and maintenance expenses. Rental yield might be high for those properties occupied in the neighbourhood, but that doesn’t mean the property you have in mind will be occupied all year, as vacancies in one street can vary from the next, too.

Rental yield is only one factor to consider

Calculating rental yield should only be part of your assessment of a property’s investment potential.

To do due-diligence and ensure you’re making the right investment, it’s also important to consider the resale value, investigate market reports, demographics, sales and rentals history in an area, planning and infrastructure, and the story of the building.


Did you know that brokers do more than mortgages?

Options for small business finance are growing with an increasing number of lenders and products on the market, and we can help you make sense of it all.

We know that small businesses may need to access finance for a number of reasons whether it be to expand, acquire another business, to buy inventory or equipment or to meet immediate costs.

Depending on your type of business and what you’re looking for, some financing options include:

Invoice financing

Allows a business to borrow against the amounts due from customers.

Businesses pay a percentage of the invoice amount to the lender as a fee for borrowing the money.

Invoice financing is also referred to as debtor financing, accounts receivable financing and receivables financing.

Business loans

A business loan could be secured or unsecured.

A secured business loan uses the business’ assets as security. Assets could include real estate, vehicles or inventory.


An unsecured business loan is approved based on a business’ creditworthiness, it is not secured against any type of collateral so the interest rate is often higher than a secured loan.


Unsecured line of credit

A loan that allows a business to access the funds as required for working capital or operational needs. It is not secured against any asset and is approved based on a business’ creditworthiness.


A line of credit is also referred to as a ‘revolving loan’ as the borrower can withdraw funds, repay, and withdraw again.


Call us today to talk about options for financing your small business today.


There’s more to selling your home than putting up a ‘For Sale’ sign on your front lawn.

Here are the first things you should check off your list to help you get a favourable result from your investment and ensure the selling process runs as smoothly as possible.

Speak to your broker

If you’re considering selling your home, speak to your finance broker to ensure that your plans after selling – whether it’s buying a similar property, upgrading or building – are actually feasible, you don’t want to sell your home only to discover you can’t achieve what you had in mind afterwards.

Choose a quality agent

A website and promotional material will always highlight the agent in the best possible way, but word of mouth and past client reviews will show their true colours.

Asking family and friends who have purchased or sold a property about their experience is a great way to ensure the agent you’ve enlisted will provide quality service.

Make sure the agent specialises in your area and is someone you feel comfortable around as they don’t just negotiate prices on your behalf, they also act as a mediator and represent you as a vendor.

Prepare the paperwork

Getting together all the documents required is a tedious yet necessary part of the property selling process.

From a disclosure document to a contract of sale, ensure all the paperwork is prepared in time to ensure it all runs smoothly.

For example, before a property can be marketed for sale, your agent will require a copy of the contract from your legal representative.

Don’t take things personally

Remember this is a business transaction. Don’t feel insulted if you receive feedback on the property that doesn’t match how you feel about your home. To ensure you come out with the best deal, remove all emotion and think of your house as a commodity.

Present your property well

Thinking that your home will sell itself can be a costly mistake. Despite how much you like the way you have it set up; furniture, flooring and painting changes can make a big difference to the property’s wider appeal, and marketing it widely can increase the competition and, therefore, the price.

Trust your agent’s strategy, engage in a thorough marketing campaign, and invest in presenting your property in its best light to help secure the best financial result.

Surround yourself with a good team

Having a good team – broker, conveyancer or solicitor, and real estate agent – that communicates well will ensure any issues that arise during the sale can be quickly and easily dealt with.


There’s more to selling your home than putting up a ‘For Sale’ sign on your front lawn.

Here are the first things you should check off your list to help you get a favourable result from your investment and ensure the selling process runs as smoothly as possible.

Speak to your broker

If you’re considering selling your home, speak to your finance broker to ensure that your plans after selling – whether it’s buying a similar property, upgrading or building – are actually feasible, you don’t want to sell your home only to discover you can’t achieve what you had in mind afterwards.

Choose a quality agent

A website and promotional material will always highlight the agent in the best possible way, but word of mouth and past client reviews will show their true colours.

Asking family and friends who have purchased or sold a property about their experience is a great way to ensure the agent you’ve enlisted will provide quality service.

Make sure the agent specialises in your area and is someone you feel comfortable around as they don’t just negotiate prices on your behalf, they also act as a mediator and represent you as a vendor.

Prepare the paperwork

Getting together all the documents required is a tedious yet necessary part of the property selling process.

From a disclosure document to a contract of sale, ensure all the paperwork is prepared in time to ensure it all runs smoothly.

For example, before a property can be marketed for sale, your agent will require a copy of the contract from your legal representative.

Don’t take things personally

Remember this is a business transaction. Don’t feel insulted if you receive feedback on the property that doesn’t match how you feel about your home. To ensure you come out with the best deal, remove all emotion and think of your house as a commodity.

Present your property well

Thinking that your home will sell itself can be a costly mistake. Despite how much you like the way you have it set up; furniture, flooring and painting changes can make a big difference to the property’s wider appeal, and marketing it widely can increase the competition and, therefore, the price.

Trust your agent’s strategy, engage in a thorough marketing campaign, and invest in presenting your property in its best light to help secure the best financial result.

Surround yourself with a good team

Having a good team – broker, conveyancer or solicitor, and real estate agent – that communicates well will ensure any issues that arise during the sale can be quickly and easily dealt with.


Solicitors and conveyancers are different, and it’s important to have the right one on your team, to avoid paying too much while still getting the advice you need.

Buying property is one of the biggest financial decisions most of us will make in our lifetime – it’s something you want to get right.

Every Australian state and territory has different laws, forms, regulations, and taxes associated with purchasing property, so having either a solicitor or a conveyancer will help the whole process run smoothly.


Although there is a licensing process for conveyancers, they do not have to be legal professionals so are cheaper to hire. However, they can only provide information relating to property, so if you have additional legal questions, you might have to search elsewhere.

For a straightforward property purchase, a conveyancer can do the job. Their main responsibilities include giving advice and information about the sale of property, preparing documentation and conducting any settlement processes.

Conveyancers must cease to act for a person as soon as the matter moves beyond conveyancing, when this happens, they must refer you to a solicitor for advice.


While conveyancers are limited to advising on your property purchase, solicitors can provide you with a wide range of legal advice in addition to your conveyancing needs, and may be necessary if your property transaction isn’t straightforward.

If there are other matters that affect the transaction like family law, asset protection, asset structuring, tax law or estate planning, you will need a solicitor’s advice.

Solicitors are more expensive, but the investment may be worthwhile if you anticipate any legal issues – having this established relationship with a solicitor means you won’t have to scramble for one later.


Stamp duty, also referred to as ‘transfer duty’, is revenue levied by states on transactions relating to the transfer of land or property. It is paid upfront and needs to be budgeted for, in addition to your loan deposit.

The amount of stamp duty you are required to pay differs in each state, however there are three universal factors, along with the value of the property, that determine how much stamp duty you will pay. Contributing factors include:

  1. Whether or not the property is a primary residence or investment property.
  2. Whether or not you’re a first home buyer.
  3. If you are purchasing an established home, a new home or vacant land.

There are several stamp duty calculators available online that take the guesswork out of budgeting for a property. Factoring in this additional cost can’t be overlooked when you’re considering your capacity to repay a loan.

However, in a bid by state governments to stimulate home ownership and growth, there are a range of tax concessions available to reduce stamp duty.

Again, exact amounts differ across each state, but those likely to benefit the most are first home buyers and those opting to buy a new home.

When taking out a mortgage, many people forget to consider the fees and expenses that come on top of the purchase price of the property.
Here are some of the extra costs that you’ll need to consider when you take out a home loan.
Home loan application fees
Most lenders charge a home loan application fee. The fee will depend on the loan you are applying for and the lender.
Home loan application fees cover:
• loan contracts
• property title checks
• credit checks
• attending a settlement.
Mortgage fees and costs
• Mortgage establishment fees – lenders generally charge a mortgage establishment fee, which is a fee for setting up a mortgage.
• Property valuation fee – a third party chosen by the lender, is appointed to determine the value of your land and improvements.
• Mortgage registration – your mortgage deed needs to be registered with the government. Some State Governments charge stamp duty to register your mortgage.
• Lenders Mortgage Insurance – if you don’t have 20% of the purchase price or the value of the property, the lender will require you to pay for a lenders mortgage insurance policy that covers their risk in the event you default on your repayments.
Property fees and costs
• Building, pest and electrical inspection fees – it’s wise to have your property inspected for any structural or electrical problems and for pests.
• Registration of transfer fee – the new owner of the property needs to be registered at the land titles office.
• Legal fees – you generally need to pay a solicitor or settlement agent to handle the transfer of ownership of the property on your behalf.
• Home and contents insurance – most homeowners insure their home and contents against a range of threats, such as burglary, fire, storm, etc. Lenders insist that your property is insured while you have a mortgage.
• Life and income protection insurance – borrowers should consider protecting their incomes and themselves while they have a mortgage.
• Utility costs – connecting electricity, gas and telephone can attract a fee.
• Council rates – your local council charges rates to cover garbage collection and a host of other services.
• Water rates – the water corporation charges rates for the supply and upkeep of water to your property.
• Strata / body corporate fees – if you buy an apartment or strata titled property, body corporate fees are charged, and some fees can be significant, particularly if the building is in need of a major work, or if there are lifts, pools and other communal facilities.
• Maintenance costs – don’t forget to make provision for regular maintenance on your home, even if you decide not to undertake significant renovation.

Before you apply for a home loan with your partner, there are a few discussions that you need to have that go a little beyond what you may know already.

You’ve found someone you want to spend your life with– the hard part is over, right? Wrong. You know each other well enough to know whether or not you each blow the budget every month, but you probably don’t know each other’s complete credit history. So, before you buy a property together, there are plenty of discussions you need to have. Here are three of them.

Have they defaulted on any payments?

They might be relatively debt free now, but has this always been the case? One bad mark on a credit file, such as a late car payment or a default on a credit card, will change the approach you need to take when applying for finance.

It doesn’t mean you can’t secure finance, but it may mean you need to apply to a specialist lender for a low documentation loan. Your broker can help you find the right lender and craft an application to avoid the heartbreak of continual rejection.

That savings balance, where has it come from?

If your partner has savings towards a deposit, that’s fantastic, but the balance is only one part of the equation that lenders consider.

If he or she has managed to build up those savings over a good period of time, making regular contributions, and managing their savings well, lenders will consider this a positive indication of an ability to make repayments regularly.

If, however, the savings are the result of a redundancy payout, a gift from family, or backing a good horse, they are still helpful as a deposit, but don’t indicate that ability to make repayments.

Again, this is not the end of the world. You’ll be in a better position than you would without that balance, but may need expert help to put your application in the best light.

If we do get into trouble, how would you want to handle it?

You must plan for every eventuality, even one you think is not likely. Having said that, this discussion isn’t so much about having a solid plan in place for the worst, as seeing how your partner would deal with difficulty.

If one of you lost your job, or you had unexpected bills that seemed overwhelming, would they try to struggle through, not wanting to talk about it with you or with your finance broker, and potentially default on the loan? Or would they tackle it head on by visiting your finance broker or lender with you to make a plan to get through it without defaulting?


Securing a business loan isn’t necessarily difficult but knowing how to navigate your way can be the difference between success and failure.

Banks and other financial institutions offer a wide range of business finance options, from commercial property loans, commercial vehicle leases, and commercial and equipment leases, to simpler options, such as letters of credit, overdrafts and lines of credit. Here are some tips on how to improve your chances of success.

  1. Find a finance broker

A finance broker can help you work out what loan type and lender are appropriate and realistic for your business.

Finance brokers work with clients to determine their borrowing needs and abilities, select a loan suited to their circumstances, and manage the process through to settlement. They are experts in the area, have access to wide range of lenders and loans.

  1. Have a credit history and make it good

Lenders are looking for two things when it comes to your credit status – an existing credit relationship and a relatively clear history.

If a borrower already has an existing loan which they’re servicing on time, they are much more likely to be successful. Of course, there are options for those who are either credit impaired or just don’t have a documented credit history, and a finance broker can help clarify these.

  1. Actively show how risk will be minimised

Demonstrate how you will lessen the risk to you and to the lender. Your finance broker can help you with this.

  1. Be prepared

For your first meeting with your finance broker, have up-to-date paperwork and tax records, make sure you’ve done your research and have a fair idea how much you want to borrow and how you plan to spend it.

You should also know your total worth, listing your assets and liabilities, and find out what your credit score.

  1. Have a business plan

Regardless of what kind of business you are financing, it’s always important to have a good business plan.

Lenders like to see a business plan that shows that you know what you want to achieve with the funds and how you are going to go about it.

  1. Provide more than one exit strategy

Lenders want to know how they’re going to get their money back and some want up to three scenarios for what is called the ‘exit strategy’.

Here are our top tips to tactfully negotiate the price without ruining your chances of securing the property.

Tip #1: Never enter a negotiation empty-handed

Whether it’s hiring inspectors for a building and pest report, or obtaining quotes from tradespeople, obtaining facts and figures will give you ammunition when requesting a price reduction. 

Tip #2: Separate your emotions

The most tactful way to negotiate is to eliminate all emotions. Try to separate yourself from the outcome and present your side logically. The owner is under no obligation to accept what you offer, no matter how well you present your points. So, if things don’t go your way, being negative won’t help the negotiation.

Tip #3: Remember this is someone else’s house

Negotiation is a two-way street, to come to an agreement, concessions will have to be made on both sides.

Try to understand what is important to the owner. Think about what you can offer to counteract the price reduction you’re after. Perhaps a longer settlement period so they can find a new home, it’s little enticements like this that can often be much more valuable than a couple of extra dollars.

Tip #4: If you don’t ask, the answer is always going to be no

From wanting certain fixtures included in the sale price, to extra inspection requests, you won’t know what the owners are happy to give if you don’t voice your desires.

A house that requires a bit of repair work, for example, is a great bargaining tool and generally an opportunity to secure a good price. However, before you go wild with requests, think about what is most important to you, as realistically the owners aren’t likely to budge on everything.

For example, in theory, you can inspect a property as many times as you like. In practice though, it will depend on your agent’s availability and whether the owner is currently living in the property – you might put off the owner if you are constantly disrupting their day. An alternative might be visiting the street at different times during the week. You don’t have to enter the actual home to get a vibe of what the neighbourhood is like.



It’s easy to get carried away with the fun part of buying a property – looking at houses – but delaying the less compelling task of arranging finance will weaken your negotiating position on both the property and the loan.

Looking for a property to purchase is an exciting time. Choices regarding location, size, number of rooms and local amenities often see house hunters carried away in a deluge of daydreams and anticipation.

However, before you get carried away, it’s important to check off the essentials first. Although organising your finances may seem drab in comparison to perusing sales listings, gaining pre-approval with a lender will give you confidence about how much you can afford to borrow.

Arranging finance before finding the perfect property will put you in a good position when it comes time to make an offer. When you do find the house you’ve always wanted, you can present to the seller and estate agent as a prepared applicant who is serious and reliable.

It shows you mean business and gives them peace of mind that your financing will not fall through. Don’t be afraid to let the selling agent know you have conditional loan approval in place.

Sellers are most interested in completing their sale fuss-free and with steadfast funding, showing that you are capable of both will help put you at the top of a potentially competitive list of applicants.

In the instance that you find and secure purchase of a home without having your loan pre-approved by a lender, there are a few pitfalls that you risk running into.

You run the risk of forfeiting your initial 10 per cent non-refundable deposit you need to put down to secure the property. This may differ depending on what state you live in, but the point is it always pays to be organised and have pre-approval in place.

Saving home loan applications to the last minute also leaves less time to find the most suitable loan and have it approved ahead of settlement.


As a homeowner with a mortgage, chances are you’ve heard of the term ‘refinancing’.
Refinancing involves reviewing your current mortgage, and potentially swapping your loan to another lender, who can better meet your current needs, wants and circumstances.
Refinancing can be a strategy to secure a lower interest rate, switch to a different type of loan and can also allow you to consolidate your debts or pay down your mortgage more quickly.
Another common reason borrowers look to refinance is to access equity – the amount you’d get from selling your home after settling any associated loans and any other costs associated with the property.
However, refinancing isn’t suitable for everyone. There are many different factors you’ll need to consider when thinking about refinancing a loan.
So how will you know that refinancing is the right option for you?
The first step is to speak to a professional, such as a mortgage broker, about your needs, objectives, current financial situation and whether you can afford a different loan structure, particularly if you have more than one property.
Are you looking to pay less interest?
If your purpose of refinancing is to aim for a lower interest rate, this could potentially save you a lot of money in the long-term.
While saving money is often one of the biggest benefits of refinancing, it may not be as straightforward as that and careful consideration is required.
Sometimes refinancing may only save you a small amount per year, particularly when you take into consideration any exit costs, application fees and taxes involved. Refinancing may also not offer benefits if the loan will attract Lenders Mortgage Insurance (LMI) or features like an offset account aren’t offered with the new loan.
However, if it’s going to save upwards of $1,000 a year, refinancing might be a sensible approach.
At this point, the broker will need to find out about your existing loan, repayments and current loan structure.
Your mortgage broker will also need to find out more about your current financial situation, including your income, any other current debts and about any assets you own.
The current value of the property is also taken into consideration, your broker will have access to current data that will indicate what your property is likely to be worth.
The broker will then review the various loan options and figure out whether it’s worth it for you to refinance.
Your mortgage broker can tell you if getting a lower interest rate from your current lender can be achieved without refinancing.
Do you want to change your loan type?
Refinancing may allow you to change to a different loan type, for example switching from a variable loan to an interest only loan.
If you do decide to go down the refinancing path, working with a broker rather than going straight to a lender has advantages.
Brokers generally have access to loan options from a range of different lenders and if there’s a better opportunity for you, they’re usually able to access it.
Do you want to consolidate your debts?
If you want to refinance to lower lending costs to help you manage your monthly repayments, speak to your mortgage broker who can negotiate with your current lender for a rate suitable to your current situation.
Your broker can also help you look at alternative options to consolidate your personal loans and credit cards into the one loan. This could help you in lowering your monthly repayments, or help you keep your repayments on time, and even save you interest in the long term.

Circumstances can change, leaving your home loan less suitable than it was originally. A home loan health check can reveal if you’re paying too much.

What’s involved?

Your finance broker can do a full home loan health check for you either in person or over the phone. They will check if your loan is still competitive and still suited to your individual needs.

Having an expert do this for you can also take the stress out of the process for you. It is advisable to get this check done at least once a year, or if your circumstances change.

Questions to ask

Be aware of what you want checked. Think about the following when you speak to your broker:

  • Am I paying an unreasonably high interest rate?
  • Am I paying high fees?
  • Am I happy with the service I receive?
  • Does my loan give me the features I need?
  • Am I paying for features I don’t use?
  • Have my financial circumstances changed?


A home loan health check will generally cost you nothing and could save you thousands. Your home loan features could be improved, or you could find yourself with a lower interest rate. A better payment structure could also be introduced, making your repayments more manageable.

Checking the state of your current loan could uncover the possibility of taking out additional finance, which can consolidate any other debt you may have, or help you purchase an investment property

Buying a property is more complex than most other purchases you’ll ever make. Here are the different parties who may be involved in your home-buying process and how you can leverage their valuable experience and knowledge..

Finance broker

Brokers act as a liaison between you and the lender. They will find out about your finances and your property goals, and search for and negotiate a loan product that matches your needs. Not only will they do the legwork and ensure your loan is processed as smoothly as possible, but they are there to guide you throughout the entire process.

Real estate agent

Unless you’re working with a private vendor, meeting a real estate agent is inevitable when it comes to purchasing a property.

Hired by the vendor, or seller, the real estate agent’s role is to advise the vendor on preparing the property for sale, market and communicate about the property, and negotiate with potential buyers.

Insurance companies

A property purchase is a high-value purchase and long-term financial commitment making risk management vital. Insurance, including mortgage protection and property insurance, will help you avoid being hit with a major financial burden should anything not go according to plan. Many finance brokers can deal with insurance as well or will recommend an insurance broker who can.


The legal aspect of a property purchase is taken care of by a licensed and qualified conveyancer. If they are a solicitor, they can also provide legal advice.

Their role is to prepare the documents to ensure that transfer of ownership of the property has met the legal requirements in your state or territory.

Property valuer

Knowing the value of a property is essential in a loan application, so a valuer can play a huge role in the property buying process. A lender will often engage an impartial valuer to ensure that the buyer and the lender will know what loan amount may be warranted. The value is based on the property and location, as well as the current market.

Pest and building inspectors

Without the services of pest and building inspectors, a homebuyer’s worst nightmare – finding out the property they have bought requires costly renovations or pest treatment – may come true. Organising a pre-purchase inspection is essential.

If the property requires structural, wiring or repair work, these inspections can stop you from making a costly mistake or, if the property is still your dream home but just needs a little work, can provide a valuable bargaining chip.


If you need to borrow money to make your purchase, you will need a lender, whether it’s a major bank, a second-tier or non-major, or a specialist lender for more difficult funding proposals.

Urgent maintenance is an unavoidable aspect of being a landlord, so having a cash buffer set aside will help you deal with any unexpected problems.

When renting out an investment property, having access to extra cash is vital for two reasons:

  • To cover the costs of repairing maintaining the property, giving it the best chance of remaining tenanted.
  • To cover the cost of the mortgage should you lose your employment or rental income.

A buffer ensures that you are not stretched to your financial limits, but rather comfortable while on your investment journey.

Ideally, your buffer would sit in an offset account against your mortgage, so that you have immediate access to the money, while at the same time reducing the principal and therefore the total interest payable on, your loan.

Before calculating a buffer, make sure you have a budget and savings plan in place that identifies your living expenses and ability to save accurately. Aim to have a buffer of three to six month in loan repayments and living expenses.

For investors without a buffer who need to make repairs to a property, there are short-term options available. Personal loans and credit cards may cater to urgent funding, but they do attract higher interest rates and fees.

If you do need to access this type of credit, make it a priority to put a strategy in place to pay back this debt as soon as possible.

Wondering why your finance broker is contacting you six months after you’ve settled on your property? The simple answer is that a finance broker is with you for life.

You’ve scored the home of your dreams with the help of your finance broker and you’ve just popped the bubbly to celebrate. Congratulations!

When the bottle’s empty and you’ve settled in to your new home, you’ll notice your finance broker is still in your life, and you might wonder why – after all, they got you the loan and earned their commission. Why would they still care how you are going?

They know it’s a good idea to keep in touch every six to 12 months. After all, you should be reviewing your current loan every year and your finance broker can let you know how you’re tracking along.

Building a long-term relationship with your finance broker is a good idea, as he or she will know the ins and outs of your circumstances and what you want for your future. Your finance broker will also stay on top of your account and, with expert industry knowledge, keep his or her ear to the ground for any new products or better interest rates that would benefit you.

As well as expecting to hear from your finance broker every six to 12 months, there are a few times you should contact them. This is because if your life circumstances change, it may impact your mortgage.

For example, you may be welcoming a baby into your home, you may receive a higher salary, your income may be temporarily reduced, or you may decide to get married.

Otherwise, you may want to refinance to a better a deal or consolidate your debts. You may also want to access the equity that you have accumulated in your home for a renovation, an investment or a holiday- all of which your finance broker can help you with.

Even the most seasoned of investors benefit from staying in touch with their broker, who can help them maximise returns later down the track. And if you decide to invest in property for the first time, your finance broker can help look for investment loan options to get you started.