How to negotiate like a pro
Have you found your dream home? Kelly Inn, assistant buyer’s agent at Highspec Properties, shares her tips on how to negotiate your purchase like a...
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Servicing policy refers to a set of criteria lender uses to determine how much you can borrow. The criteria is based on lender’s risk appetite and recommendations by regulatory bodies like APRA and ASIC. Different lenders will have different servicing policy which can affect how much you can borrow. Here are a couple of factors which can impact on your borrowing capacity
- Assessment Rate: This is an interest rate used when working out your affordability. The assessment rate can be anywhere between 7.25% – 8% instead of actual interest rate you pay.
- Living Expense: Most lenders uses Household Expenditure Measure (HEM) as a guideline when working out borrower’s monthly minimum living expenses
- Existing Home Loan Repayment: Lenders may load your actual repayment up by another 25 -30% as a buffer
It is important to speak to a mortgage specialist because they will be able to see if your financial position fits into the lender’s policy.
Related FAQs
What is Refinancing?
Refinancing is a process of taking out a new loan to pay off the existing loan typically at a lower rate or for better features. People wanting to change their home loan is usually because of a change in the circumstances or goals which can be a smart way to manage money. It may give you the option of securing a lower interest rate, consolidating debts or unlocking equity from your current property. Speak with one of our mortgage brokers and find out if refinancing is right for you.
Why do people refinance?
Refinancing can be used for various reasons, which include but aren’t limited to: Home Renovations, Reducing monthly repayments, Lowering your interest rate, Cashing out your Home Equity, Raise cash for another purchase (another house, car, boat etc), Access Additional home loan features (offset account, redraw facility etc.), Borrow additional funds
How much does it cost to refinance?
Refinance can help you save money and own your home sooner however there are costs involved in refinancing from one lender to another lender.
When you shouldn’t consider refinancing your property?
Refinancing is generally a good idea for most borrowers but there situations where switching loans just isn't worth it.
How can I consolidate my debt and is it a good idea?
Debt consolidation is when you payoff your existing debts such as credit cards, personals and car loans with a new debt.
