- Which lenders do you deal with?
At MXJ Finance we have over 25 lenders on our panel. These include the major banks, regional banks and non bank lenders. Each of them has their unique niche market, which we take into account when recommending products.
- Which type of loan is good for me?
This links back to your underlying goals, such as whether you want to maintain flexibility, lock in a lower rate, or perhaps pay off your loan as quickly as possible. A combination of many factors will lead to the final choice of lender and specific loan type. We ensure that you understand our thought process behind our recommendations, and ensure you are fully informed when you make your final decision.
- How experienced are you as a mortgage broker?
Our director Michael Jin has been in the industry for over 8 years. As recent as 2019, he was named industry Young Gun by multiple industry associations. In the last 2 years alone, he has helped hundreds of clients and written over 100 million dollars’ worth of home loans.
- How much do I have to pay for your services?
Our services are free – brokers only get paid by the lender when the loan is successful. Unlike other professions where you pay upfront, brokers will do all the work first and get paid at the very end. This gives clients peace of mind and demonstrates our expertise.
- How do I know your recommendations are in my best interests and not your own?
In 2019, the federal government introduced a new legislation called the “Best Interests Duty”. The bill has been passed and is expected to take effect on 1st July 2020. It outlines specific things brokers need to consider, such as demonstrating that their recommendations are in the client’s best interests. Prior to this, we have still maintained a very transparent process, disclosing each fee from the lender, rates, and commission paid by the lender. At MXJ Finance, we will always provide you with the exact reasons as to why certain lenders are in our recommendations.
- What is an offset account and what is redraw?
Offset accounts are your everyday transaction accounts, accompanied by a debit card and cheque book. Any money you keep in there will reduce the amount of interest you will need to pay. For example if your loan balance is $500,000, and there is $100,000 in your offset account, you will only pay interest on the net loan (i.e $400,000).
Redraw accounts enable you to withdraw extra repayments that have been made (i.e. additional repayments on your loan on top of your usual monthly minimum). Using the previous example, if you have transferred the $100,000 directly into the loan, it will reduce the balance down to $400,000, and the $100,000 will be the available money that you can take back out again anytime in the future.
- How much deposit should I have?
There is no hard and fast rule here and depends on several factors, such as the location of the property and the nature of your income. 5% would be the minimum, and 20% is ideal if you would like to avoid paying mortgage insurance and obtain the best interest rates. Most banks require you to demonstrate genuine savings if your deposit is less than 15%. At MXJ Finance, we will work together with each client to factor the deposit requirement into our loan recommendations. The pros and cons will be clearly outlined to you.
- What is LMI?
Lender’s mortgage insurance is a cost that, in most cases, will be incurred if your deposit is less than 20% deposit. Read more about LMI on our FAQ page
- How long will it take to get my loan approved?
Generally speaking, it should take lenders about 1 week to provide an indicative approval. Sometimes, if documents provided are comprehensive, this can be achieved in a matter of days. It is different for each client, each lender and depends on the time of the year. In all cases, we will endeavour to provide a reasonable estimate as early as possible in order to manage expectations and ensure that key milestones are being clearly communicated.
- What other fees and charges should I budget for when purchasing a property?
Depending on the property type and state you are located in, the charges will always vary. The largest cost you should budget for is stamp duty, which usually accounts for about 4% of the property price. As a general rule of thumb, if you are not a first home buyer (i.e., you are not eligible for any government incentives, such as the First Home Owner Grant or stamp duty exemptions), you should always prepare at least 5% of the property price on top of your normal deposit. In most cases, this should cover all acquisition-related costs, including stamp duty.
