Your first meeting with MFSimmons Mortgage Broking is free. We charge a fee to the lender for our application and settlement service. Our mortgage services do not cost you anything.
If you ask us to undertake your mortgage lending and then change your mind prior to our agreement expiring, we charge a fee of $750 which covers the time and expertise devoted to your file. This fee would also be incurred if you pay out the loan within 18 months of settlement, as some banks ‘claw back’ their commissions and this charge helps us cover some of the costs we have incurred.
The reasons for refusal are based on your apparent inability to repay the loan or to meet certain policies and requirements that the lender has in place. For property investors, convincing lenders of your ability to meet their criteria is all about building flexibility into your loan structure.
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Your ability to purchase another investment property depends largely on the flexibility of your current loan structure, and the expected income from the investment property. Refinancing and/or restructuring your loan portfolio may enable you to purchase another property.
You may be able to borrow more from your existing lender for the deposit and purchase costs. (A property with high rental income potential is more likely to convince a lender to take you on.) Or, you may choose to use your savings, or to liquidate assets to achieve the purchase.
Self-employed property investors often have to meet more rigorous criteria in the loan approval process (See Low Doc Loans below).
Contact us, let's discuss your situation.
Investors need a much higher level of flexibility in their loan structuring. MF Simmons Mortgage Broking understands these issues intimately, as our brokers are all astute property investors.
There is no one-size-fits-all loan. Our job is to work through your particular needs and to seek out and negotiate the best loan for you, be it a professional package, a split-purpose loan, a line of credit, a 100 per cent offset account or other loan product.
A pre-approval, or conditional approval, is a commitment from a lender to loan you a certain amount of money, at a designated interest rate, for a specified period of time. To receive it, we need to prove your ability to repay the desired loan amount with supportive documentation.
A pre-approval typically lasts between 90 and 180 days, after which time you can often extend it, unless your financial circumstances have changed, in which case you must repeat the approval process. Some banks require updated pay slips to move from pre-approval to full approval, others require only the signed contract of sale.
We recommend having a pre-approval because it gives you an advantage when competing to purchase a property - you know exactly how much money you have to play with, and the vendor knows you're able to commit immediately.
A low doc (low documentation) loan application is one in which you are not required to disclose your income to the lender. This can be useful for self employed property investors who have not done their tax returns, or if their income is from non-traditional sources that do not meet current lending criteria. However, the application costs, mortgage insurance and exit costs are typically higher for low doc loans.
Like low doc loans, no doc loans do not require any income verification. In addition, you are not required to show evidence of your assets and liabilities. The rates for these loans are higher than usual, but if paperwork is a problem for you, this may be worth considering.
After your loan application is signed and we have all of your documents, we will be in touch to let you know how the deal is progressing. (See also, The Loan Application Process).