Frequently Asked Questions
We work solely for the benefit of our clients, keeping your best interests in mind and saving you money wherever possible. For example, on a 25 year mortgage the correct loan structure can save you literally thousands of dollars.
Our services go well beyond the normal transactional nature of applications for loans or insurance cover. We spend time with you and analyse your needs and financial situation before formulating a suggested overall plan.
You are spared the difficulties and the precious time involved in trying to research and analyse the complexities of different products and options, and you are not restricted to the offerings of one insurer or lender.
We are an accredited mortgage and risk advisory business and we work with most lenders and insurers, who pay us a commission. Therefore 95% of the time our services are absolutely FREE to our clients. In very unusual circumstances lenders do not include any brokerage in the transaction, and we have to charge our client a fee. This fee is always discussed and defined at our first meeting.
A Business Offset Loan allows for the combining of balances of business accounts in order to reduce the amount of interest payable on a variable business loan. By paying less interest you pay back more of your original loan (the principal) with each repayment, becoming debt-free faster.
Cash flow solutions vary from a simple overdraft facility to cover brief cash flow shortages to a pre-approved line of credit for ongoing borrowing. Lenders have innovative facilities that can help you release cash that’s tied up in credit sales invoices and inventory – ask us how.
Get sound advice on which of these different types of commercial loans that are available to SME’s (Small Medium Enterprises), Self-Employed Individuals (Owner Operators) and Small Home-Based Businesses most suits your situation:
Business Offset Loan
This type of loan is usually for businesses that have a turnover of less than $1M. It allows for the combining of balances of business accounts in order to reduce the amount of interest payable on a variable business loan. By paying less interest you pay back more of your original loan (the principal) with each repayment, becoming debt-free faster.
Business Term Loan
You can use this type of loan as a short-term funding solution, from 1 to 5 years, for things like working capital or to purchase inventory. Business term loans are normally secured by the company and in most cases against commercial or residential properties.
Cash Flow Facilities
Cash is the life blood of any business. It’s the money that bridges the gap between you paying your suppliers and receiving payment from your customers. Cash flow solutions vary from a simple overdraft facility to cover brief cash flow shortages to a pre-approved line of credit for ongoing borrowing. Lenders have innovative facilities that can help you release cash that’s tied up in credit sales invoices and inventory – ask us how.
A revolving home loan is sometimes called a line of credit, or revolving credit loan. It’s like having a large overdraft. You can achieve financial flexibility because you have access to some of the equity in your property.
The idea is for you to save on interest by keeping the daily balance of your loan as low as possible – a great incentive for you to only spend what you need to! All your income is directly credited to this account and your bills and everyday expenses are paid from that account as required.
Revolving home loans have a floating interest rate and you can mix and match a revolving home loan with a fixed interest loan.
When considering residential home loan options, apart from the interest rate it is really important to choose the right type of loan.
Each type of loan is designed to suit different situations and goals.
With tailored repayments there is an option to gradually increase repayments, which could save thousands of dollars in interest over the life of the loan.
Offset loans can reduce the amount of interest you pay. They do this by letting you subtract (or offset for the purposes of calculating interest) your cheque and savings account balances from the amount you still owe on your loan. This type of loan has a floating interest rate. The total amount in your cheque and savings accounts is subtracted off your loan before the interest is calculated, which means you only pay interest on the difference.
For example, if you have a floating interest rate home loan of $100,000 and you offset $20,000 of it using your cheque and savings balances, you’ll only pay interest on $80,000 of your loan.
This is the most common type of loan. The regular repayments are the same each week, fortnight or month unless the interest rate changes. Every repayment includes a combination of interest and principal. At first the repayments comprise mostly interest, but as the amount owing begins to decrease the regular repayment is made up of less interest and repays more of the principal. Most of the later loan repayments go towards paying back the principal. With a table loan you can choose a fixed rate of interest or a floating interest rate. Most lenders allow you to select a term (how long it takes to repay the loan) of up to 30 years.
Interest Only Loans
An interest-only loan can be ideal when you need a home loan, but would prefer not to pay off any of the principal in the initial stages.
They’re often used for property investment. Some people take an interest-only loan for a year or two, and then switch to a table loan when they have more income available. With this type of loan you still make regular payments (weekly, fortnightly or monthly) but you don’t repay any of the principal for an agreed interest-only term, after which the loan can be switched to a table loan or repaid in one lump sum.
Yes, for example, some people choose to divide their loan between an offset loan with a floating interest rate (so they can use their daily cheque and savings accounts to help reduce the interest on their loan) and a table loan that has a fixed interest rate – for the certainty that fixed loan repayments provide.
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