Before your first meeting, a discussion will be held over the phone to learn more about your personal circumstances and what you’re looking to achieve. This is to introduce ourselves, our service and find out what you want to achieve.

From this discussion, we will send you a link to your Online Fact Find where you can provide an outline of your circumstances including Income, Liabilities, Assets, Goals etc.

During this 10 minute process, you will be able to book in a time for your First Meeting (45 minutes). This meeting is generally conducted over Zoom, however face to face meetings are also offered if preferred.

The simple answer is no. Our office is based in Richmond, Victoria, however the majority of our meetings now take place over Zoom.

If you’re ready to purchase your first home, it is important to do a bit of research and understand the various State and Government grants, discounts and schemes available.

Depending on where you intend to buy, there may be specific State Government Stamp Duty Concessions or Exceptions on offer as well as Grant Packages. To find out more about each State’s First Home Buyer assistance packages, click the links below:

• Victoria
• New South Wales
• South Australia
• Tasmania
• Queensland
• Western Australia
• Northern Territory

The Australian Government has also initiated support to eligible first home buyers to purchase a home sooner. As part of the Government’s support, the schemes below enable eligible buyers to purchase a property with as little as a 5% and 2% deposit respectively. To find out more about each scheme, click the links below:

• The First Home Guarantee (FHBG)
• The Family Home Guarantee (FHB)

For purchases, the most prevalent fees are stamp duty, and, in some cases, Lenders Mortgage Insurance. Other fees include conveyancing, registration of mortgage documents and a certificate of the title search. For all purchases, we provide an breakdown of the costs depending on your circumstances so you can be confident in the cash you will need to make a purchase possible.

When refinancing, you will need to pay exit fees at your current lender plus settlement fees at your new lender which can total to around $600 in most cases. When refinancing, we will detail the potential savings you will make by moving lenders and always ensure this outweighs any costs incurred.

At a minimum, lenders will require a deposit of 5% however some lenders will require a significant larger contribution. In order to avoid additional fees such as Lender’s Mortgage Insurance, a deposit of 20% is required. Our preference is for all buyers to have a minimum of 10% deposit plus enough cash to cover the purchase costs i.e. stamp duty and other fees and charges if applicable.

Lenders Mortgage Insurance (LMI) is a fee that is paid by you, the borrower, to protect the bank for any loss incurred if you are unable to repay your loan. It is required by the bank if your deposit is less than 20%.

LMI is a once off, non-refundable payment at the start of your loan. This cost can be borrowed as part of your loan or paid in cash at settlement.

We are able to provide you with LMI estimates depending on your circumstances.

• Variable-Rate Home Loans:
  
  A popular mainstream choice, variable interest rates can change at any time depending on fluctuations with the Reserve Bank of Australia’s official cash rate.

  Variable rate home loans offer the flexibility to make additional repayments as well as access to a redraw facility and the use of an offset account.

• Fixed-Rate Home Loans:
  
  A fixed-rate home loan will allow you to lock in your interest rate for a specific period (usually 1-5 years). A fixed home loan provides complete certainty in knowing exactly what the repayments will be which can assist in budgeting.
  
  Fixed home loans can be a good option when interest rates are on the rise, or in times of economic uncertainty. In the instance where interest rates drop, you’ll still have to pay off your mortgage at the fixed-rate until the end of the agreed fixed term. It is important to note that if you wish to break from your fixed term contract prior to the expiry date, you may be charged large break fee costs.

  
  Following the fixed term period, the loan will revert to a variable home loan rate for the remaining term of the loan.

• Combination/Split Loans:
  
  To have the best of both worlds, you can opt for a combination of part-variable and part-fixed home loans. This is known as a split loan.
  
  In the instance where you want the certainty in knowing what your repayments will be over the course of a fixed term home loan, but you also want the added flexibility in a variable rate home loan, a split loan might be a good option to consider.
  
  There is no exact science in deciding how much you should allocate towards a variable or fixed home loan split so the decision is up to you (i.e 50/50 or 20/80). We will work with you to decide what combination is going to be most suitable for your circumstances.

Repayment Types: 

• Principle & Interest Repayments
  
  Principle and interest repayments (P&I) are most common for those individuals taking on an owner-occupier loan. This is because the primary goal of buying a home is to pay down the mortgage overtime so you eventually own it. Through selecting this type of mortgage repayment, you will build equity within the property with every repayment made.
  
  The principle component of your repayment is paying back the money you borrowed from the lender whereas the interest component is the cost charged by the lender for allowing you to borrow the money.
  
  It is very common for P&I rates to be much lower than interest only loans as lenders deem this form of repayment far less risky.

• Interest-Only Repayments
  
  As the name suggest, this form of repayment only consists of the interest charged on the loan for a set amount of time.
  
  Because the repayment doesn’t involve paying down the principle portion of the loan, the repayment will naturally be lower. Once the interest-only (IO) period ends, repayments will become more expensive over the life of the loan as no aspect of the principle portion has been paid down as yet.
  
  This form of repayment is a popular repayment method for investors.

Offset Accounts Vs Redraw Facilities

• Offset Account
  
  The key benefit of using an offset account is to save interest on your mortgage. The bank will calculate your interest repayments based on your Loan Balance minus the funds in your Offset account.
  
  The easiest way to think of this account is like a ‘home base’ for your cash flow. Any incomes (Salary, Rental, Dividends etc) can arrive into the account and expenditure items can come straight out of the same account. Because these accounts work in the way of an everyday transaction account, you can withdraw money at ATMs and make purchases using a debit card. There is no restriction to accessing your funds as you please.
  
  Typically, having an offset account will come with an annual fee of around $250-$400 depending on the lender. We will advise you if this type of account is suitable for you and ensure it makes good financial sense as part of your home loan.
  
  Example
  If you have a home loan of $430,000 and you have savings in a linked offset account of $70,000 then you will pay interest for the month on $350,000 ($430,000 minus $70,000).
  With an interest rate of 5% as an example, your $70,000 has saved you $291 of interest repayments for the month or $3,492 for the year.
• Redraw Facility
  
  Unlike an offset account, a redraw is a facility and feature within your loan rather than a separate account.
  
  This facility allows you to draw back funds that you have paid into your loan account ahead of your standard monthly loan repayments.
  
  This amount can be redrawn to pay for whatever you like. Whilst the funds sit in your home loan account, you are reducing interest charged month to month. It is worth noting that some lenders have terms and conditions on how much you can redraw at certain times and there may be fees associated with accessing your money.
  
  Example:
  If your loan repayments are $2,300.00 per month however you have elected to pay $3,000 per month (an extra $700), then at the end of 12 months you will have $8,400.00 sitting in your redraw account.

This is the reason why Mortgage Brokers have a job. There are many banks and lenders available and it can be confusing to know which one is right for you. The team at 40 Forty Finance will listen to your personal goals, individual financial circumstances and requirements and narrow down the most appropriate lending solution for you.

Not all lenders lend to all borrowers so it is important we focus on those lenders that suit your situation and ensure you have a positive outcome.