How does 40 Forty Finance work?
We will not charge you for our service. That’s right… we will do all the searching, structuring and application for you at no cost.
Once your loan is settled and in place, we will be paid a commission from that particular lender. This commission will be fully disclosed to you before any application is sent to a lender.
To put it simply, we work for you, not any one particular bank. This provides some significant advantages:
- Choice – When searching for a product that best suits your needs, we have access to 36 lenders with hundreds of products. Your local branch can only recommend you their branded product, which may not be the best solution for you
- Relationship – Bank staff can be moved around the organisation due to performance or to mitigate risk. At 40 Forty, we commit to forming a relationship with our clients that will last a lifetime
- Follow Up – How many calls have you had from your bank to offer you a cheaper rate? Thought so. It’s our job to constantly be on the look out for offers that are well suited to your needs
One of the major benefits of using 40 Forty over going to your local bank is the higher quality of ongoing service.
We will not only do all the initial paperwork for you, we will also conduct an annual review of your finances to ensure you continue to have the right structure in place at a fantastic rate.
Our mission is to build long term relationships as your trusted adviser. We want to be with you over your property journey from first home buyer to retirement planning.
Your particular situation will be assessed differently by every lender. A range of factors including your income, employment contract type and level of savings will affect your borrowing capacity.
We take the time to understand your current and future financial commitments to ensure you are able to manage your regular loan repayments.
Pre Approval provides a lot of advantages
- It gives you clear guidance on how much money you can spend
- Is valid for up to 3 months
- It allows you to bid at auctions with confidence
- Shows estate agents you are serious about buying
- Is free of charge with all lenders
When applying for a pre-approved loan you will need to provide lenders with documentation to support your application. Each lender is slightly different, however most common documents are:
- Proof of identity – drivers license or passport
- Proof of deposit holding – bank statement where funds are held
- Proof of income – pay slips and tax returns
- Proof of personal expenditure and cost of living – transactional statement from your bank
Lenders Mortgage Insurance (LMI) is generally needed when your loan amount is greater than 80% of the value of the property. This insurance is paid for by the property purchaser and is put in place to protect the lender. If you, the borrower, are unable to make your repayments, the lender will reposes your property and sell it at market value. If the lender is unable to sell the property for more than the outstanding loan balance, they will use the LMI policy to claim back the remaining balance from their insurer.
LMI is usually paid as a one-off lump sum at the time of settlement but in many cases it can also be added into the loan amount and paid off over the life of the loan – a term known as capitalising the LMI. We can show you financial models that highlight the pros and cons of your particular situation to assess what option is right for you.
The government provides the First Home Owner Grant (FHOG) across the various states and territories of Australia. If you are a first home buyer, it is worth checking what is offered in your respective state or territory, to see if you are eligible for the FHOG. www.firsthome.gov.au
Some of Australia’s state governments have concession waivers of the stamp duty associated with a property purchase. Stamp duty is a tax applied to certain property transitions. When land is sold, transferred or leased, for example, stamp duty is generally payable.
It is usually the buyer, not the seller, who is liable to pay stamp duty. Payment must be made within three months of entering into the contract for purchasing the property. The amount of stamp duty payable depends on the value of the property and the amount for which it is sold, transferred or leased. It is calculated on its market value or the price paid by the buyer.
Get in touch with us and we will be happy to sit with you, explain in greater detail and provide an estimate of your costs to enter the property market.
Having a variable or fixed rate loan comes down to personal preference. A large range of factors need to be carefully considered when deciding what’s best for you.
Fixed rates provide you with confidence in future cash flow requirements, however if rates fall, can leave you locked into paying more than you need to.
Variable rates are traditionally lower, but leave you at the mercy of the Reserve Bank of Australia (RBA) and your lender’s interest rate decisions.
We will work with you to figure out the best borrowing scenario for you given your financial situation and tolerance to risk.
When buying a property, its important to understand the purchase price is not all your committing to. Below are some of the most common additional costs of purchasing a property.
- Borrowing Costs – Depending on the loan product and deposit amount, there may be application fees, property valuation fees or Lenders Mortgage Insurance (LMI) to pay
- Transfer Stamp Duty – State Government charges a buyer transfer duty when they purchase a property but the percentage scale will vary according to the sale price and whether or not the buyer intends to live in the property or rent it out as an investment. Depending on the nature of the transaction, certain concessions and exemptions are available, particularly for first home buyers.
- Legal Costs and Sercives – To ensure your making the right decisions on both your purchase and financial structure of ownership, you may need to consult with a solicitor, accountant or financial planner. Traditionally these services charge a fee for service.
- Insurance – Purchasing a house is likely to be your biggest asset, so its important to have the appropriate insurance cover in place should anything happen to it. Lenders will require you to have building insurance in place prior to providing you with your borrowed funds.