Purchase New Home

If you are ready to buy your first home, Connected Loans can help! Not only can we provide you with access to an extensive range of home loans available to homebuyers, but we can cut through the mortgage jargon and simplify the process.

Purchasing a home for the first time, or deciding to buy an investment property is a big decision, especially with climbing house prices in Australias capital cities. Property is likely to be one of the biggest expenses that you undertake in your lifetime, whether on your own or with your family in tow. Therefore, its vital that you understand each step of the financial and legal process including picking a lender to signing your contract.

Connected Loans is here to assist you in providing a large range of lenders to choose from across the major banks and other financial lenders. We can step you through the process by utilising our expertise in the industry along with the capability of accessing over 40+ lender loan offers Australia-wide.

How Much I can Borrow

Knowing your borrowing potential for a home loan will depend on the following:

  • Your disposable income. This is the money that is left from your income after you pay for your monthly living expenses ( living expenses include items like rent, transport, groceries, social, insurance premiums etc).
  • Your current loan repayments. These are your current liabilities like car and credit card repayments.
  • Your proposed loan Repayment. After deductions have been made for income, living expenses and your current liabilities your remaining income will need to be able to comfortable cover your new loan.
  • The size of your Deposit and/or equity. Lenders will require a deposit to be contributed towards your new purchase or for there to be sufficient equity in your property if you would like to refinance. Without these a lender can limit the loan they are prepared to offer.
  • Your Current Credit Worthiness. Lenders will also look at how you have been paying your current liabilities and living expenses. Your proven ability to regularly pay your rent and car repayments will have a positive impact on how much you can borrow.

Click here for calculating how much your borrowing potential.

Loan Repayment Calculator

A loan repayment calculator is a great tool to help you visualise how the repayments will look by giving you an overview of your financial situation based on your requested loan including the amount you have saved as a deposit for the purchase of the property.. It will tell you how much you need to pay back to the lender for the loan amount that you want to borrow, usually calculated on a monthly basis. It will also inform you how much of your monthly payment will go to the interest and principal amount of the loan. It will help you make a smart decision about the home loan that you will select and from which lender.

Click here to use the Loan Repayment Calculator of Connected Loans.

What is the Application Process

Applying for a home loan will depend on the actual lender. It is usually a long process that is oftentimes made complex depending on your credit and financial situation. The usual process goes through the following steps:

  • Set an appointment with the mortgage lender.
  • Fill out forms and receive the list of documents needed.
  • Choose the type of home loan you will borrow (they differ in the type of interest, terms, etc)
  • An assessment is made by the lender if the loan is suitable for you.
  • Acquire conditional approval - this will lead to the property valuation and credit check.
  • Full approval of the home loan.
  • Submission of Loan Agreement documents.
  • Settlement of the loan.

If things go well, the mortgage loan application process usually takes 4 to 8 weeks to complete. It will take longer if your documents are incomplete.

Here are usual requirements that will be expected from you to fully process the mortgage application.

  • Personal information, including current and past address, etc.
  • Valid IDs (passport, government IDs, employment IDs)
  • Income and other sources (salary records)
  • Letter of employment (from employer)
  • Tax returns or notice of assessment (for self-employed, you need 2 or 3 years’ worth of tax returns)
  • Employment history
  • List of current assets (e.g. other properties, cars, etc)
  • Recent credit (credit documents should indicate credit limit) and bank statements (six months’ worth to show saving pattern)
  • Sales contract

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here

How much Deposit do I need

Ideally, you should be able to give a 5-10% deposit on the purchase price of the house. If you intend on buying a house that costs $500,000, you should save at least $25,000 for the deposit and then another 5% to allow for costs. The bigger the deposit, the less you have to borrow on the mortgage.

If you cannot provide a deposit of 20% of the home’s value, you will most likely need to pay for lender’s mortgage insurance. There are however some strategies available where you can use a guarantee from your family to assist with the purchase.

Lenders Mortgage Insurance is a type of insurance that lenders take to protect them from losses in the event that you default on your loan. Lenders will arrange the LMI on your behalf but you will need to pay premium at settlement. The premium is paid once per loan.

For more information about your deposit please contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What is a Pre-approval loan

Before you start your search, it is good idea to secure a pre-approval for a home loan. That way, the process of obtaining the loan will be faster after you find the right property to buy.

A pre-approval is a great way to determine the amount you can be approved for. It is usually valid for three (3) months - which is enough time for you to find a property to buy. Once you have found a property, you can go back to the same lender to process the actual home loan based on your pre-approval.

Getting a pre-approval is also proof to the seller that you are serious about buying the property. Sometimes, this can work in your favour when there are other buyers interested in purchasing the same property.

Connected Loans can happily assist in arranging Pre-Approvals and Click here to get started on the pre-approval process.

Choosing a property to buy

There are many types of properties for sale in Australia.

  • Apartments. These are usually called “units.” This is a modern dwelling that has multiple units on one plot of land. It is characterised by common areas that are shared with other occupants. It is common in locations that are densely populated like major cities or business districts because a lot of people can live in one land area. It is ideal for those who prefer to be near the city and their office.
  • Single-Family Homes. This is a single detached house that is on a single block of land. This is independently owned and typically there is no shared space between different owners. It is usually found in the suburbs and outskirts of the city or business district.
  • In choosing a property to buy, make sure you consider the following:
    • Lifestyle. If you need to be near your workplace, an apartment is ideal for you. If you want to start a family, a bigger dwelling place like a single-family home is a better option.
    • Number of dwellers. Even if you are a couple, you can buy a single-family home if you plan on having children in the near future. But if you are single and you have no plans to get married or start a family in 5 to 10 years, you can buy a smaller place.
    • Purpose. If you intend to live in it, your choice will depend on your lifestyle and the number of people who will live in it. But if you intend to use the property for rental income, you can probably make do with a smaller property near the city or business district.
    • Financial capabilities. There are two considerations here. First, you have to consider the amount that you can afford in terms of the property price. This can easily be determined by looking at the pre-approval of your mortgage. The second consideration is the upkeep of the house. There are several expenses like the property tax, insurance, repair, and maintenance - all of these add up. The bigger the home, the more expensive the upkeep.

For more information about your buying a new home refer to our New Home Buyer Learning Centre contact one of home loan experts today on 1300 iConnect or enquire online by clicking Here.

Refinance Your Home Loan

If you are tired of the current terms of your home loan and you feel like the interest rate is dragging your finances down, Connected Loans can offer a great solution.

This page will help you understand the benefits of refinancing your mortgage and the important details that will help you make a smart decision about this financial move.

Why should you refinance your mortgage?

There are many reasons to refinance your mortgage - most of which will revolve around improving your current financial situation.

  • You want to refinance to achieve a lower interest rate. A lower interest means that customers can reduce their repayments or pay their loan off sooner.
  • Refinancing will allow you to change a variable interest rate into a fixed-rate and vice versa.
  • You want to lower your monthly payments. Refinancing your loan may allow you to increase your loan term. This will allow you to reduce your repayments
  • You want to use the equity in the house. The equity of the house refers to the value of the house less your loan balance. For instance, if your house was valued at $500,000 and your mortgage loan balance was $400,000, the equity that you have is $100,000. You can use that equity, refinance and increase your loan. This can be used in several ways:
    • To renovate or upgrade your house.
    • To repair or maintain certain parts of the property.
    • For other personal, investment and business use.
  • You want to consolidate your debts. Since refinancing can help you borrow against the value of your house, you refinance all your existing debts - not just your mortgage. Of course, this will depend on the equity in your house. If the equity can cover your credit cards, car loans, and even tax debt, you can pay them all off and be left with one big loan. By refinancing these loans, typically your monthly repayment will decrease.
  • You want to avail of new features in your loan. Sometimes, other mortgage lenders provide better features like lower fees and more flexible payment terms.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What should I consider before refinancing

Before you refinance, it is important to ask yourself the following questions:

Why am I refinancing? It’s important to ensure that if you refinance that you are better off. It might be that your current mortgage is the best type of loan for you.

Will you live in the property for a long time? If you have plans to sell the property in the near future, it does not make sense to refinance as you’ll need to take into account any upfront fees and ongoing costs associated with a refinance.

What is important to you? You need to consider what you are looking for – do you want a lower rate, better features, a fixed rate or better service?

What is the current interest rate? It only makes sense to refinance a mortgage if you will get a lower interest rate in return. Otherwise, you are better off staying with your current mortgage

Will there be penalties if you refinance? If your original mortgagee will charge a prepayment penalty, do not be too quick to skip refinancing. Sometimes, the penalty is nothing compared to the amount that you will save if you get the low-interest rate on the new loan. You should also consider the transaction fees that will be charged to shift your mortgage and any tax implications of this financial move.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What is the refinance process?

If you are sure about refinancing and you have studied your financial situation, you can proceed to look for your options for a new loan. The refinancing process will depend on who your lender is. To give you an idea, here are the general procedures of refinancing in Australia:

  1. Make a list of the qualities that you want from the new loan. This can be low-interest rates, a longer payment term, fewer fees, etc.
  2. Find the lender that can give you the closest mortgage according to your list. Take note that you can refinance with the same lender as the original loan. This is why you need to check with them first before you search elsewhere. The process is usually simpler and a lot faster if your current lender can accommodate your refinancing requirements. Feel free to set a meeting with them to discuss what you want out of the loan. Be thorough in asking about fees and charges.
  3. Submit your application. This is usually similar to the original mortgage process wherein you will complete a form and submit it to the lender with updated documents (e.g. income changes, etc).
  4. Go through a pre-approval. The new lender will check your application and initial documents to see if you qualify for the loan. They will check your credit report and make sure that you can pay off the loan you will borrow.
  5. Standby for the valuation process. The new lender will assess your property to check its current value. If you have more than one property, you may be charged for the valuation of the others. Only the first property valuation is free.
  6. Get the finance approval. Once everything is in order, you will receive your loan approval in writing. This is usually called the unconditional or formal finance approval. The loan documents will soon follow.
  7. Inform the old lender. This is unnecessary if you will refinance with the same lender. If not, you need to let them know that you have plans to refinance with another company. This will give them time to prepare the information and requirements that the new lender will request.
  8. Receive the loan documents. These are the legally binding documents that you need to review thoroughly and carefully before you sign. Make sure it is as close as the list that you drafted at the beginning of this process (to ensure that your targets are met). If there is anything that you do not understand or agree to, call the lender to clarify your queries.
  9. Wait for the settlement to be completed. This is when the old loan will be settled and the new one established. The exchange of the titles and the registration of the mortgage over the property will also happen during this time.
  10. Learn how to manage the new loan. Since this is a new loan with new terms, you have to learn the details to ensure that you will not miss on any payments or incur charges or penalties.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

How much does it cost to refinance?

The cost to refinance will depend on whether you will apply with the same mortgage lender or with a new one. The state where the property is will also be a factor when calculating the cost. You need to ask the mortgage lender for the actual details but you can expect it to have the following fees:

  • Application fee. This is for the new lender so they can process the loan application for the refinancing loan.
  • Valuation fee. This is also paid to the new lender. Most of the time, the first valuation is free - but some lenders may charge this.
  • Land registration fees. This is paid to the new lender for the transfer of the mortgage registration from the old lender to the new one.
  • Discharge fee. This is paid to the current lender to prepare the documents required for the refinancing and as pay-out to the existing loan.
  • Contract break cost. This is also known as the prepayment penalty. Not all home loans have this but you need to check your mortgage contract if you will be charged with this penalty.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

Consolidate your Debts

If you have multiple debts and you want to simplify your situation, consolidating may be the key to your financial concerns. It is common for Australians to have multiple credit cards, a car loan, and personal loans. If you add a mortgage, your total repayments can be quite overwhelming.

Consolidating your debts may be the suitable option for that will allow you to reduce your monthly repayment and Connected Loans can help you find the right strategy to make your finances easier.

What is Debt Consolidation?

This is a debt solution that will allow you to refinance all your debts into one (1) manageable repayment per week/fortnight/month. It involves obtaining a loan that is large enough to refinance all of your debts and allowing you to easily manage and monitor your debt repayments.

Oftentimes, debt consolidation is confused with refinancing. In essence, they have the same qualities. But here are a few differences between the two:

Refinancing is only one way to consolidate debt. Refinancing is when you refinance your home loan to take advantage of the equity in your house. You can use the equity in your house to consolidate debt. However, you also have the freedom to use it on something else like spending on the renovation of your house, a vacation, or even as a down payment for another home purchase. Also, refinancing does not necessarily require you to have multiple debts.

Debt consolidation can be done by borrowing a personal loan to pay off the other debts. This loan is called a debt consolidation loan. You can also use a new credit card to pay off high-interest credit cards - a process usually known as a balance transfer.

Also, debt consolidation loans will only pay off your debts. Sometimes, the new lender will coordinate with your old lender.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

Why should I do debt consolidation?

Debt consolidation has three important qualities that can benefit your finances.

It simplifies your loan. Multiple debts can be confusing and debt consolidation can help you simplify things by combining your debts into one loan. When you settle the loan, the lender typically will consolidate the other debts and close them. Once they are closed, you are left with one debt to pay each month.

It helps you take advantage of lower rates. Another quality of debt consolidation is it allows you to convert your interest rate into a lower one. As mortgages are secured against a house, the interest rate is typically cheaper in comparison to credit cards and personal loan. By taking a lower rate, you will decrease your monthly repayments.

It allows you to get better terms. You can also enjoy lower monthly payments if your loan is stretched over a longer payment period. Not only that, you can also choose a loan that offers better fees and charges compared to your existing debts but you can choose a term that is more suitable for your situation.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here

What types of debts can you consolidate?

Credit cards: Access to credit cards is quick and easy but the associated interest rate and fees typically are much higher than mortgages. By refinancing your credit cards, you will be able to save yourself money and pay of your loans faster.

Personal Loans: Personal loans quite often are financed over very short repayment terms and have very high interest rate. Refinancing your personal loans can help you manage your finances by obtaining a lower interest or help manage your finances by having a longer payment term.

Car Loans: Car Loans are typically similar to personal loans and typically financed over short repayment periods.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What if my debts are more than the value of my home?

If your combined debt is higher than the value of your home, that means using the equity of your home to consolidate debt will not be enough. Here are tips that you can follow.

  • Choose the high-interest debts that you will include in the consolidation. Using your home in debt consolidation will make it a secured loan - which is usually given with a lower interest rate. In effect, your high-interest debts will have a lower interest.
  • Create a payment plan for the debts left out of the consolidation. Do not forget about the other debts. Make sure you plan how you will pay them off.
  • Talk to the creditors or lenders of the debts left out of the consolidation loan. You can negotiate to lower the interest rate so you will have a lower monthly payment.
  • Stop acquiring more debt. You need to work on the debts that you have at the moment and lower the balance before you think about using credit again.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What types of Loans are available?

Consolidating debts can be done in several ways. Here are the options that you have when it comes to the loans that you can use.

  • Home Equity Loans. This is when you apply for a new home loan, pay off the balance of your mortgage and then use whatever is left to pay off your other debts. If the value of your house increased, you get to enjoy more extra money for your other debts. Since your house is used as a collateral for the loan, you can expect to enjoy a low-interest rate. It will even be lower if you have a good credit score.
  • Personal Loans. Another option to consolidate debts is to borrow a personal loan. In case you do not have a collateral, you can use this to pay off whatever debt it can cover. Unlike the home equity loan, the loan amount is smaller and the interest higher. To get a low interest, you need to have a good credit score.
  • Balance Transfer. This is not really a loan but it is one option that you can use to consolidate your debts. You can look for a balance transfer card that offers a low-interest or 0% interest introductory rate. This will help you pay off your debt without worrying about the interest bloating your balance.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

Investor Loans

Investing is a great way to make your money work for you.

An investment loan is a loan that is used to buy real estate that will become an investment property.

An investment loan is a solution for people who want to buy a property and rent it out to receive income, but need a loan to help with the purchase.

Investment loans are different to other loan types and its important to understand the different Lender requirements for these loans to ensure that you get the right one for you.

What is the difference between interest only loans, lines of credit and offset facilities?

There are different types of investor loans. Let us define them one by one to understand which type of loan suits your purpose.

Interest-only loans. This is a type of loan wherein the investor or borrower will only pay the interest on the loan for the first few years of the loan. This is usually 1-5 years after the loan is disbursed. This can be subject to negotiation if you want to make it longer. Since interest payments are tax deductible, this will give you time to adjust and strengthen your finances and your investment. You can use the extra money wisely by increasing the value of your house so you can charge a higher rent. It is advised that you use this period wisely because after the interest-only phase, the monthly payment will be a lot higher as the principal payments are added. Not only that, you should expect that you will pay more interest over the course of the loan.

Lines of credit. This is like a home equity and a credit card rolled into one. When you borrow a home loan and pay off a portion of it, that payment becomes the equity that you can use. Or you can use the home equity if this is your primary house. This will allow them to use an existing equity as capital for an investment property. Once you repay the loan, that can be a line of credit that you can redraw - as long as you can keep track of it for tax purposes. If you do not want any repayment, you can choose not to withdraw this. The bottom line is, the equity of the house can easily be liquidated if there is a need to do so. Lines of credit are something that investors can use to purchase another property for investment.

Offset facilities loan. For this loan, you will be required to borrow a standard home loan and then link it to an offset facilities loan. It can be likened to a savings account. You will receive a bank card that will allow you to make electronic transfers or withdrawals from an ATM. Now the key to benefit from this, lies in how much money is in the offset account. If, for instance, your mortgage is $300,000 and you have $25,000 in your offset account, the interest that will be charged to you will only be based on $275,000. The more money you have in your offset account, the less interest will be charged to you.

Click here to compare investor loans.

How much can I borrow?

The amount that you can borrow on your investor loan will depend on a couple of factors.

  • Your disposable income. This is the money that is left from your income after you pay for your monthly living expenses ( living expenses include items like rent, transport, groceries, social, insurance premiums etc).
  • Your current loan repayments. These are your current liabilities like car and credit card repayments.
  • Your proposed loan Repayment. After deductions have been made for income, living expenses and your current liabilities your remaining income will need to be able to comfortable cover your new loan.
  • The size of your Deposit and/or equity. Lenders will require a deposit to be contributed towards your new purchase or for there to be sufficient equity in your property if you would like to refinance. Without these a lender can limit the loan they are prepared to offer.
  • Your Current Credit Worthiness. Lenders will also look at how you have been paying your current liabilities and living expenses. Your proven ability to regularly pay your rent and car repayments will have a positive impact on how much you can borrow.

Click here for calculating your borrowing potential.

What is the typical investor loan interest rate?

In choosing your investor loan, you have three options when it comes to the interest rate.

  • Fixed interest rate. This is a type of interest wherein you have only one rate for the whole term of the loan. You will use the existing interest rate at the time of the loan application. This is actually the most popular among the other types because it allows the borrower to plan their payments more efficiently.
  • Variable interest rate. This means your rate will go up or down - depending on the market index. It will make your monthly payments different from time to time. Because of the flexible interest, it also offers flexible features like being allowed to redraw. Since the interest rate is tax deductible, you need to continually update your information so you can enjoy this tax benefit.
  • Split-interest rate. This is when you combine a fixed and variable rate in your loan. You can opt to use a fixed rate first and then get a variable interest rate after a few years. Or you can have it the other way around.

Choose the interest rate that can help you meet your payments. If the variable interest rate is low when you get the investor loan, you can choose this type of loan. Or you can opt to choose the split-interest rate that allows you to use the variable rate and then switch to a fixed rate in the future.

Click here to know more about interest rates.

What are the benefits of investing in Property?

Investing in a property is beneficial in so many ways. Here are some of them.

The investment property may increase in value. Overtime the value of the investment property could increase. This is called capital appreciation and is a key part of investing in real estate.

Best example of a passive income. A passive income means you only work on something in the beginning and it will continue generating revenue long after the effort.

Real estate provides a secure, low-risk, and long-term investment. Unless something adverse happens in the location where you bought the house or in the economy, you can expect it to continue to receive rental income for a long time. The real estate market is considered to have low volatility – this means that the movement in property value and rental income is relatively stable and should not change in value materially over a short time.

Rental rates can provide a sizable income over the long term. Once a home loan has been paid in full, the rental income will be continue to be paid. This can provide people with a steady income stream.

Negative gearing can reduce your taxable income. It is natural for you to pay taxes, not just on the property, but also on the rental income that you are generating. Depending on your personal circumstances, you might be able to use negative gearing to help reduce your personal income tax.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What are the risks of investing in property?

All forms of investment come with a risk. Although there are several benefits, there are also risks when investing in a real estate property.

The mortgage comes with other costs. Before you concentrate on the investor loan, make sure you calculate the other costs required to complete this transaction. Just like a traditional home loan, a property investor loan will require a deposit, stamp duty, property appraisal charges, and legal fees - among others.

Owning the property entails costs. You need to pay for the insurance, property taxes, and the regular repair and maintenance of the house. This can be taken from the rental income but nevertheless, it will reduce the income that the property will generate for you.

Income may not be enough. The housing market will define how much money you can charge for the lease of your property. While you have the option to charge as high as possible, a high rental rate can turn off potential tenants.

Rental income will depend on occupancy. A rental property is only useful when it is being leased. You may encounter financial difficulties when you are in between tenants. The property taxes, insurance, and other upkeep costs will not stop even if you do not have a tenant.

Property values can go down. While this is never permanent, the housing market can force you to lower your rental income. It could make homeownership costs quite a burden.

Damage to the property can make you lose your investment. A fire or a natural disaster that is significant enough to destroy the structure can make you lose a lot of money. This is true even if you have the house insured.

Liquidating this investment will take time. In case there is a need for fast cash, this is one investment that you will have a hard time liquidating. It can take months and even a year to find the right buyer that you can sell the house to for profit.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What is negative gearing?

This is when the cost of owning the rental property is higher than the income it generates. It is a factor that an investor takes into consideration whether to invest as it can provide additional benefits.

For instance, let’s consider the scenario that you bought a house for $500,000 and used an investment loan of $400,000 to help purchase the property. Let us assume that your annual interest repayments each year amount to $24,000. If the property is earning a rental income of $25,000 a year, you have a shortfall of $5,000.

If in that 1 year, the property value rose by 10%, that means it is already valued at $550,000. That is a growth of $50,000. Even with the $5,000 shortfall on rental income, you still gained $45,000 in one year.

Of course, there is a risk here because not having a tenant or a small capital growth can compromise the overall gain from your investment. However, there are other ways to benefit from this investment strategy.

Negative gearing will also generate a tax loss which can be offset by the other income that you are earning, which in turn will allow you to generate savings. For example, the rental income is $20,000 but interest payments, property costs (rates, strata and insurance), letting fee and property depreciation cost $28,000. That means you have a tax loss of $8,000 and that can be used to reduce the taxes you will pay on your other income sources. It is important to gauge your losses in a financial year so you can leverage your rental property losses and turn it into something that your other sources of income can benefit from.

Find out more about investing click here to access to access our Investor Learning Centre or contact one of home loan experts today on 1300 iConnect or online by clicking here.

Self Employed Loans

Self-employed individuals play an important role in the economy of Australia and Connected Loans understand your homeownership aspirations and can even help you get the best deal when it comes to self-employed loans.

How will the lender assess my income?

In most cases, lenders will use the last two (2) years tax returns and add back things like depreciation to assess your available income. Each lender has a different method to calculate your available income and what expenses they will add back. This is where Connected Loans can help you navigate your most suitable options.

Some lenders will take an average of the last two ()2 years, whilst some will use the most recent year. Some will allow depreciation to be added back along with superannuation and one-off expenses, whilst others may only use a portion.

How will a lender verify my self-employed income?

Lenders will use different types of documents to verify your self-employed income. Document requirements are typically put into 2 categories which are often referred to as Full Documentation and Alt Documentation.

For a Full Documentation Loan a lender may ask for:

  • Last 2 years Tax Returns for borrowers and their associated business entities
  • Last 2 years Notice of Assessments
  • Last 2 years P&L, Balance Sheet and Statement of Owners Equity (if applicable)

For an Alt Documentation Loan a lender may ask for:

  • Income Declaration. This is a statement that you will sign to verify that the amount you will declare as your income is true.
  • Between 6 and 12 month Business Activity Statements (BAS). This should be from an ATO portal and will show your financial transactions.
  • Letter from Accountant. This letter will serve as an income verification form that has to be signed by your accountant. It will validate the income that you declared.
  • Between 6-12 months Bank Statements. These should come from your primary business bank account.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here

What Loans are available?

Although you are self-employed, if you can satisfy the Full Documentation requirements, you can still borrow almost all types of loan - in the same way as PAYG borrower can. The only difference will be in the requirements you will provide.

For an Alt Documentation Loan, you will need to apply for a specific type of loan. These types of loans have different interest rates, fee and lending criteria.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here

Equity Loans

Equity refers to the difference between the current value of a property and the amount that is still owed on it.

Equity loans are a great way to access money using your existing home. Connected Loans can help you find the best equity loan that suits your needs.

What are equity loans?

An equity loan or home equity loan, is a type of loan that will let you borrow against the equity of your property.

Customers can increase their existing mortgage and get access to additional money by using the equity accumulated on their home. Unlocking equity is common in Australia as the rates on mortgages are one of the cheapest ways to access additional borrowing.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What can I use the money for?

Each lender has different rules for what they will allow equity loans to be used for and how they will verify the purpose. The most common uses for equity loans are:

  • Debt consolidation. If you have a high-interest credit card, using equity loan to pay for it is a good idea. It will not only simplify your payments by consolidating multiple accounts under one loan, it will also lower your interest rate. Equity loans are secured - it naturally has a lower interest rate compared to unsecured debts like credit cards. If the equity can pay for your car loan or other personal loans, you can also consolidate all of them to simplify your debts.
  • Minor property renovations. Another way that you can use this loan is to renovate your house. This is a great way to increase the value of your home. If the house is really in need of repairs and you do not have an emergency fund to pay it off, the equity of the house can be a great way to finance that need. It is important to note that the type of renovations will be at the lenders discretion as a construction loan was be deemed more appropriate.
  • Personal Investments. You can use this to finance an investment such as buying shares, add into your super fund or towards an investment property purchase.
  • Business Use. It can even be used as a capital to fund your business, buy inventory or as working capital.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What are the Pros and Cons of Equity Loans?

There are many advantages to borrowing equity loans.

  • Lower interest rate. This is a secured loan so the interest rate is already low to begin with.
  • Flexibility. This loan can offer flexibility in how they access and spend their money. In the event of emergency, people can quickly access money for a car expense or urgent building repair. In the event that it’s not needed, it can stay in their mortgage as redraw.
  • Stability. Mortgages are typically long term and whilst their balance will be paid down over time, they are not subject to annual reviews and their loan terms are much more favourable compared to personal loans and business loans which normally have much shorter loan term frames.

Here are the disadvantages of an equity loan:

  • Puts the property at risk. The property or house is your security. You are putting that on the line by borrowing money against its equity.
  • Paying for loan fees and charges. Borrowing on equity loan incurs fees and charges. All of these are costs which you will need to consider if an equity loan is the right loan for you.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

What loan types are available?

Almost all products are available for equity loans but the most common loan types available are:

  • Line of credit. This is a type of equity loan that is a revolving loan. If you apply for a $20,000 equity loan, that will be placed in an account that you can control. You do not have to use that right away. If you only need $5,000, you can borrow that amount. Whatever you borrow, that is the only amount that you need to pay off. It works just like a credit card in the sense that you do not pay for the money that you did not touch. The amount borrowed will be repaid in monthly instalments.
  • Reverse mortgage. This type of equity loan is usually offered to seniors (60 years and above). If you need funds for retirement and you have a substantial amount of equitythat can be used to give you the funds to finance your living expenses. The amount you get will depend on your age and the current value of the house. You have the freedom to decide how you want to get the funds (e.g. instalment, lump sum, etc). The interest will be calculated depending on the outstanding balance. If you haven’t taken the whole amount, you will not be charged interest for it. No repayment is required but the interest will continue to accrue and will be capitalized into the balance. This balance will only be repaid if you decide to sell your home, move into a health care facility (for the aged), or when you pass away. Usually, the sale of the house is payment for the balance.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here

Construction Home Loans

Building and renovating your own home can be a fantastic experience but it can also be a long and expensive process. Most people are unable to pay for the cost of home construction up front, and getting a standard mortgage can be a tricky process.

Whilst there are many loans currently available for construction, major renovations or purchase of vacant land, they are complicated and without previous experience, it is recommended that you use an expert to help guide you through the process.

Connected Loans can help you find the best Construction Home Loan that will allow you to build your dream home.

What are construction loans?

As the name suggests, a Construction Home Loan will allow you to build your new home. If you have a specific building in mind, this is a great loan option for you.

A construction loan can be used to buy for the vacant land and then fund the construction. The amount to be borrowed will depend on the total cost of the build and it will be provided in progress payments. Progress payments are when the lender release funds directly to the builder as different phases of the construction progress. With each draw, your repayment will increase.

Click here to know more about building properties.

How do construction loans work?

When you apply for this loan, one of the many documents you will need to provide the lender with is a Fixed Price Contract which will show the total construction costs. The lender will then use this value and the land value to establish a security value. They will use this value to confirm their loan amount.

This type of loan is not like a regular mortgage wherein the entire loan is funded at settlement. This loan is released via progress payments. The lender will assist with your land purchase (or refinance) and then assist with construction. As the builder completes each phase, the lender will then release part of your loan to the builder. It’s important to understand that each lender has different progress payments structures and criteria but normally progress payment will look the below:

  1. The first release will happen during the foundation or footings phase. This is when the site is being prepared and the slab is laid.
  2. The second fund release will include the frame or the brickwork.
  3. The third release is for the lock-up phase. It is when the windows, doors, walls, and insulation will be added to the home. It is called lock-up because the house can be locked up already because the enclosure is complete.
  4. The fourth release will be during the second fix or the phase when the electrical, fixtures, cabinets, tiling, etc will be done.
  5. The last release will be the completion. This is the painting and finishing touches. These loans will ensure that the loan will only pay for construction that is being done. It is a great way to ensure that your funds are available to complete construction.

To find out more about construction loans, click here.

How do I learn more about construction loans?

The details of construction loans will vary depending on who you will borrow it from. Usually, the general steps are the same. You need to have a professional building plan drawn up with costs from the builder before you can be approved for a construction loan. Some lenders will allow you to convert a construction loan into a regular mortgage - but only after you have reached a payment milestone or fulfilled a clause in the contract.

The difference will depend on who the lender is and your specific credit and financial situation. Even if it is the same lender, you may be given different terms because you have a high or low credit score. It is important to understand the details of the construction loan before you decide on the lender you will borrow from.

Read about the pros and cons of construction loans to understand if it is the perfect loan for you. You may even have to get a builders risk insurance policy so you can be protected from any natural disaster or fire that can compromise the building process. This is separate from the commercial liability insurance that usually comes with a professional builder. The extra coverage can help you with unexpected costs caused by calamities and accidents.

For more information contact one of home loan experts today on 1300 iConnect or enquire online by clicking here.

Renovation Home Loans

There are some great benefits to getting your home renovated.

Renovating your home can be an expensive process and tricky process. If you do not have the money to pay for the renovation of your property, you can rely on a Renovation Home Loan to help you get this done.

There are various options when it comes to financing this project. Connected Loans can help you find the right loan and lender depending on your credit and financial situation.

What is a Renovation Home Loan?

A Renovation Home Loan is actually a standard home loan that is specifically used to finance any improvement that you want to do with your home. Most of the time, it can be borrowed against the equity in your home.

Depending on the type of renovations you want to do, a construction loan may be more suitable but if your renovations are minor and non-structural, most lenders will allow you to use existing equity in your home to pay for renovations. If you don’t have sufficient equity then a construction is probably a more suitable type of loan.

What type of renovations can I use the loan on?

The lender will need to approve the type of renovation you would like to do but as a guide, if they are minor and non-structural, they will allow this without doing construction loans. Examples include upgrading certain parts of your home like the kitchen, bathroom or any external part of the house.

Know when a renovation is necessary for your property. Click here.

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