Frequently Asked Questions

Why use Precise Mortgage? The term Finance Broker or Mortgage Broker is the occupation name applied to a group of individuals working in the finance industry, however, the types of finance and other services they each offer can vary from one to the next. When establishing Precise Mortgage, we decided to specialise in Home Loans, and later decided to introduce a full range of Life Insurance products, since for many people the family home is often their biggest asset. Helping them to protect their home and family should something happen made sense.

Who pays the Mortgage Broker? Mortgage Brokers are paid by the lender. Among other things, the lender pays the Broker for the time needed to: interview and assess the Needs and Objectives of the borrower. research and recommend a suitable product. arrange for an application and supporting documents to be submitted to the lender. help co-ordinate other parties, such as solicitors and real estate agents that helps to ensure a smooth settlement. The Mortgage Broker receives a once off, up-front payment as the loan settles and an ongoing monthly payment, known as trail, which commences after a specified period of time.

Regular review of your finances - Why it's important? Leading a busy life makes It easy to forget about our financial Situation. The accumulation of other debt, for things such as motor vehicles, family holidays, store cards and so on means you could be paying a lot more than you need to. By utilising equity in existing property, a loan to consolidate all debt might be possible where the overall end rate is cheaper potentially saving you thousands.

Pre-approval subject to acceptable security – does it help? In many cases yes. To issue approval on a loan a lender must be comfortable with all aspects of an application. While no two applications are the same, there are several key areas that all applicants must satisfy first. They include: The Loan to Value Ratio (LVR) – the amount lent against the value of the property. Serviceability Test - the ability to make repayments. Employment details. Credit History and so on... While some applications can be approved quickly others require extra time. Submitting an application requesting Pre-approval before finding a property allows the lender to approve all other aspects first, providing peace of mind as you start to shop around.

What is LMI? LMI protects the lender in the event of a loss following the sale of property used to secure a debt, where the proceeds of the sale were insufficient to payout the loan. Who pays for it? LMI is payable by the borrower/s, involves a once off premium paid at settlement which can sometimes be added to the loan. When does it apply? LMI is applied when the loan amount exceeds 80% of the value of the property. The calculation is known as the Loan to Value Ratio (LVR). As the LVR increases so too does the cost of LMI While LMI can be expensive it's often used as an effective way of getting into the property market sooner.

What are the options? A poor credit history is often the result of an unpredictable life event such as: divorce loss of a loved one Sudden unemployment personal illness or taking time away from work to care for a sick partner or child. Solutions and options. There are now several Specialist Lenders offering a range of options specifically designed to help eligible borrowers get back on their feet. Like any application, to move forward, there are several key areas that need to be satisfied such as Loan to Value Ratio guidelines, acceptable security, satisfactory income, employment etc. Final approval relies on the “story or explanation” that supports the borrowers current financial situation. If it makes sense, then in most cases an approval is issued.

Is it cheaper to go directly to the bank? The quick answer is no. It’s a common belief that you can get better pricing by going to the lender direct. In fact, for someone without experience it can be a stressful, drawn-out process and the result often more expensive. Using the latest in comparison software, Mortgage Brokers are researching the market every day, comparing hundreds of products across dozens of lenders in search of the best deals for clients.

How are pre-existing medical conditions assessed? Having a pre-existing medical condition does not automatically exclude you from gaining cover. The insurer will consider many factors prior to making a decision such as: the type and severity of the condition. when the condition first occurred. If the applicant still has the condition to name just a few. Once they have the information, a decision can be made with one of the following scenarios the likely result. They may: Approve cover, subject to an exclusion relating to the condition. (with or without increasing the cost) Approve full cover without an exclusion. (with or without increasing the cost) Approve full cover without exclusion and (without increasing the cost) Decline cover but may offer accidental. So, it’s important not to make an assumption. Instead give us a call to discuss, and we can raise the scenario with an insurer.

Does it help to have an Adviser? Engaging the help of a qualified Adviser when applying for Life Insurance increases your chances of an approval as well as having a claim paid. What's involved? The process involves an initial appointment which in most cases lasts a little over an hour giving the adviser enough time to: Complete the related compliance steps. Explain the types of cover available including extra options. Produce a quote and in cases where a decision to proceed was made, Submit an online application to the insurer. The adviser then liaises with the insurer for the duration of the approval process. If approved, a confirmation outlining the details of cover is sent directly to the insured and the Adviser usually the same day.

What is a Split Facility? A Split Facility is one loan divided into multiple portions, each with a different loan number and separate statements. What are they used for? While helpful for many reasons, Split Facilities are mostly used to isolate: investment debt from personal debt and fixed rate portions from variable rate portions. New splits can be added later, often the result of an increase, tapping into a capital increase and perhaps used as a deposit for the purchase of an investment property. Split Facilities provide the flexibility borrowers need, particularly investors, so it’s important to engage a broker who understands how to use them.