Loan amount to the Value of the property Ratio (%) e.g. $200,000 Loan ÷ $250,000 Value of property = 80%.

Do I need 5% genuine savings if I am buying my first home?

Yes, but there are a couple of lenders that require only 3% savings record with the balance coming from a gift, FHOG etc, but Not from another loan source e.g. personal loan etc. You can also use equity from a family member or friend in some instances. Some lenders now will take into account your rental record from your real estate agent for the last twelve months as testiment to your payment/savings record. 

How do I qualify for a Low Doc loan?
One party needs to be self employed. Have an ABN GST registered (if nessesary) and trading for a minimum of 2yrs. You will need the last twelve months bank statements showing income going into your account and/or the last twelve months BAS statements. If you are refinancing or purchasing a property the last six months home loan statements or contract of sale for purchase and a letter of rental appraisal (if for investment). You will be required to have minimum of 20% deposit or equity.

Can I use Family Assistance, Pensions etc for servicing (as income) in my loan proposal?
Yes, most Lenders will allow you to use your Family Assistance for servicing (provided the children are under 12yrs of age) but other Centrelink payments eg Parenting Payment, Pensions etc are subject to Lender policies.

I am employed in a Casual position with my employer. Will this hinder my chances of getting a loan?
It will depend on the LVR. If the loan is under an 80% lend and you have been with your current employer for the past 12mths you will have a good chance of getting the loan considering all other factors are clear. If you have been in the same industry for 2yrs or more this will also help your chances. If your borrowings are over the 80% lend where you will require mortgage insurance you will be required to be in your current employment for a minimum of 2yrs.

Do Permanent Part Time employees have the same requirements?
No. Lenders can be a little more flexible with this but it will still relate to the LVR. Under 80% lend will normally require a minimum of 6mths employment with the same employer. Over 80% lend will require you to be employed with your current employer for a minimum of 12mths.

I have just started employment in a full time position but I am on a probationary period of three months. Is this ok?
If you have changed from another employer to this new one which is in the same industry it would be favorably looked at, but in most cases lenders would prefer to wait until you are out of your probationary period before they would look at your application. If there is another party to the loan working and if this income is enough to service the loan required it will not matter if the other person is on probation. Also, if the loan can be nearly serviced by one applicant then the lender may consider the other applicant although on probation.

Can I borrow up to 100% of the purchase price for a Home Loan?
No, you are unable to purchase a new home with a 100% lend anymore. Nearly all lenders require a 5% deposit now with this being genuine savings in most cases.

Most lenders will lend up to 100% using the security you are purchasing and the security of another property you may own with equity in it. If you have money to cover all your costs you may want to consolidate some other debt you may have with this extra money. You still need to be able to service this loan comfortably.

You can also borrow 100% using what some Lenders call a Family gaurantee Home Loan. This is using your family's home as security as long as their property is unemcumbered and the occupants are still working. You still need to be able to service this total loan.

What does Conditional Approval mean?
This is when your loan has been approved in principal by the Lender, but with conditions to go with this, prior to going to unconditionally approved e.g.; valuation to be done, explanations for any abnormalities (income, bad credit history etc) with the loan application.

What does Unconditional Approval mean?
Your loan has now been fully approved without any conditions, and from this point you will have your mortgage documents sent to you. You would normally exchange contracts after gaining this approval (if purchasing).

What is Mortgage Insurance?
Mortgage Insurance is an Insurance which is charged by the bank for the borrower to pay on settlement of their loan. This covers the bank for any loss of money which has been lent to the borrower if their loan amount exceeds 80% LVR. This is required by the bank in case the loan ever goes into default and repossession is required. This insurance is for the bank and Not for the borrower.