Page 122 - Smart Money

Common questions

This will determine if you are getting the best deal given current interest
rates, or whether there is a product on the market better suited to your
needs.

What fees/costs are involved in switching mortgages?
Penalty fees could apply if you’re paying off your current mortgage early,
especially if you’re exiting a fixed home loan. But these may be offset by
repayment savings when you switch home loans. We’ll walk you through
any fees that will apply in your circumstances.

How much money can I borrow?

We’re all unique when it comes to our finances and borrowing needs.
Get an estimate on how much you could borrow with our clever loan
options tool. Chat to us when you’re ready, we can help with calculations
based on your circumstances.

What is Lender’s Mortgage Insurance (LMI)?

LMI is an insurance policy that your lender may require you to take out
to insure them against the possibility of you defaulting on your loan.

Why would I be required to take out LMI?
There can be many reasons for your lender requiring you to take out
LMI. Each lender has particular policies that it must adhere to. Factors
that get taken into consideration are: the type of loan, the amount of
deposit compared to how much you wish to borrow, the value of your
property, and other factors such as perceived risk of default.

For example, if you are borrowing more than 80% of the property value,
you will be required to take out the insurance policy on behalf of your
lender, which your lender will organise.

The cost of the premium varies according to the amount that you are
borrowing. The more you are borrowing, the higher the premium cost.

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