WONDERING WHAT WE DO? HERE’S
how it works
WE ELIMINATE THE HEADACHE AND GET YOU THE BEST DEAL.
IT’S A WIN-WIN.
STEP BY STEP GUIDE TO
HOW IT WORKS
1. PROVIDE US YOUR DETAILS, GRAB A LATTE
First, we discuss your finance objectives, whether you’re a first home buyer, need a car loan, or a business fit-out, equipment, or something else, we have a whole team ready to engineer your deal. We want to make sure we connect well and provide real value to your situation. The best way we can do this is to almost pre-qualify you over the phone and once we both feel like we’re a good fit for each other, then we can begin collecting your information.
To eliminate paperwork and speed up the process we have 3 ways you can provide all your information:
- Online with our Client Data Form
- You can download our Client Needs Analysis, fill it out and send it back.
- Or you can go straight to our calendar to Book In A Time and we can do the form over the phone or face to face.
Then we begin the legwork while you’re sipping on lattes at the beach.
2. WE ANALYSE & ADVISE, YOU SELECT A PRODUCT
We then assess your position and work out exactly which lenders are going to be best suited for what you need. This is much better than you having to go bank hopping in hopes that the bank that says “Yes” will actually be the best deal on the market – though it likely won’t be.
We’ll exact your borrowing capacity, determine rates and repayments, work out feasibility. The choice is yours but we won’t hesitate to suggest which lender and product we think is best.
At this point we’d also ensure the loan is properly structured for tax effectiveness, negotiate with the bank the best possible rate, and begin packaging up the application.
3. LODGEMENT & TRACKING, LET US BATTLE THE BANKS
Then we lodge the application to the lender on your behalf. This is about where the fun part kicks in for us.
Dealing with the banks is usually no walk in the park; however, this is the path we’ve chosen and will happily liaise with the lender to see your application go from submission all the way through to settlement.
Once we know what sort of finance you’re after we can advise on a realistic time frame for approval. More than likely be prepared for it not to happen over night.
4. FOLLOW-UP THROUGH TO APPROVAL, COMMENCE PARTY.
Finally, we’ll liaise with the lender to make sure all documents are sent out and signed. Then it’s approved, you sign the dotted line, and your loan is settled.
Whether it be a car, jet-skis, property, office fit-out, etc, this is where we all celebrate and maybe throw a party if the timing is right. Our promise to you – to prepare you, to advise you, to be transparent with you and to provide world class service every step of the way.
We have much to offer…
YOU’VE GOT QUESTIONS.
WE’VE GOT ANSWERS.
CAN I BORROW 100% OF THE PROPERTY PRICE?
Short answer, yes it is possible. The people who are eligible for this would fall into one of two categories:
– You have substantial equity in another property you own.
– You have parents or relatives who have equity in a property that they’re willing to give you access to.
Drop us a line and we can discuss your options in more detail.
WHY USE A MORTGAGE BROKER IF I CAN GO TO A BANK?
If you needed your car repaired you’d go to your local mechanic. Or the one mechanic you trust. You’d take the time to drive there, you’d hope he can find the problem, and then you’d hope it isn’t going to cost a fortune. If he can’t fix it then you have to find the next mechanic and drive there. But if he can fix it, how do you know you’re getting the best price?
But what if you could speak to an expert who knew exactly how to fix all your cars issues and could tell you exactly which mechanic would fix your car the best and at the lowest price? Would you not want to deal with that expert? (not a bad idea)
Banks are the mechanics, you have the broken car, and Financial Engineers are the experts. We bring all your options to your doorstep, saving you time, money, and a potential massive headache. You can be confident you’re getting the best deal on the market. How good is peace of mind huh? Don’t make the classic mistake of walking into your bank thinking they’re going to give you the best deal because you’re a “loyal customer”. Speak to an expert who can show you 40+ options instead of just one.
HOW DO MORTGAGE BROKERS GET PAID?
Depending on the lender, we are paid approximately 0.50% to 0.8% of the loan amount as an up front fee and an ongoing fee of 0% to 0.285% of the loan balance per annum. This is not paid by you, it is paid by the lender.
This is an important question. How and what we get paid is something all mortgage brokers are obligated to disclose upfront without hesitation. Financial Engineers Inc would be happy to provide a copy of our lender’s commission schedules for you to see what commission we get from each lender.
We are remunerated by the banks for introducing your business to them and for doing much of the leg work that would otherwise be done by one of their staff. They’re happy to pay us because it’s costing them less to get your business. Similar to a referral fee. This outsourced approach is brilliant since it gives you more choice and the banks don’t have to pay us anything if we don’t lodge applications with them.
HOW DO I KNOW YOU WILL NOT CHOOSE A PARTICULAR BANK TO GET A HIGHER COMMISSION?
Easy. Upon your request, during the product recommendation stage we can give you a copy of the commission schedule for every bank we deal with including the 1st, 2nd, and 3rd tier lenders. The commission is non-negotiable, highly regulated, and applies to every mortgage broker in Australia. You’ll see the entirety of what we can expect to get remunerated for from your deal.
HOW DO I KNOW YOU WILL NOT RECOMMEND A LOAN WHICH IS UNSUITABLE?
Plain and simple, it is against the law for us to recommend or assist you with an application for an unsuitable loan. We’re not in business to lose our business. It is in neither of our best interests to suggest an unsuitable loan. We take every pre-caution to make sure the loan is suitable and we can’t stress how important it is that you disclose your full financial position and answer all questions honestly.
HOW DO I GET THE BEST INTEREST RATE?
Great question. Difficult answer. The answer is more of a “rule of thumb” than a hard and fast rule. For starters, here are some basics:
– Loan amount at or below 80%LVR.
– Property is an owner occupied.
– The more you borrow from a lender the better. (In other words, have all your borrowing with one lender)
– Talk to an experienced mortgage broker who knows how to negotiate rates
HOW MUCH DO I NEED FOR A DEPOSIT ON AN INVESTMENT PROPERTY?
Well, the short answer is minimum 10% of the purchase price. Due to recent policy changes by most lending institutions, the maximum LVR for investment loans is 90%, although we know some lenders that in some circumstances will allow less than 10%. The primary downside of doing less than a 20% deposit is that you have to pay mortgage insurance. Some lenders waive the mortgage insurance cost entirely for certain professionals – making the idea of doing only a 10% deposit for investors even more attractive. Primarily the LMI waiver extends to medical professionals and lawyers, but some lenders extend it engineers and accountants. Check out our page for Professional Finance for more info and to see if your profession is on the list.
WHAT IS NEGATIVE/POSITIVE GEARING?
An investment can either make money or lose money. Negative gearing is when your investment costs more than it makes; positive gearing is when your investment makes more than it costs. The logic behind a negatively geared investment is “I’ll take a minimal loss year on year in hopes that the capital gains from selling the investment will exceed the total loss.” A loss can be used to reduce your taxable income which will reduce the amount of tax you pay. However, you are only reducing the tax you pay because the income from your investment isn’t covering your costs. Hence, you will still need to make up for the negative cash flow from other sources. Negatively geared properties aren’t “bad” but they should never be the aim. Why take a loss when you have the option to take a gain?
HOW DOES THE BANK DECIDE HOW MUCH I CAN BORROW?
This is tough to have a short answer for but just know the banks take quite a conservative approach. Each bank has a borrowing capacity calculator that will add about 2.5-3% to the actual interest rate. So if the actual rate you’d get is 5%, the banks could be assessing your loan capacity by using an 8% rate. Obviously, they take into account all your income/expenses plus they also have built-in benchmarks for living expenses based on your age, number of dependents, etc. Then if you’re receiving rental income from a property the banks usually only 80% of the income. And on top of that each lenders calculator differs form the next so you’ll get different outcomes with each bank. Check out the Mortgage Workshop to get an idea of how much you can borrow. As finance brokers we practically study these bank calculators. Drop us a line and we’d enjoy doing the legwork for you to work out your best options.
HOW MUCH CAN I BORROW?
This is sort of like asking how long is a piece of string? It all depends on your income, your savings, your assets, your liabilities, how many kids you have, where you live, your basic livings expenses, etc. You can use our Borrowing Capacity Calculator to get a pretty good idea of how much the banks would loan you based on your current position.
SHOULD I HAVE AN OFFSET ACCOUNT ON MY INVESTMENT LOAN?
Offset accounts are almost essential for any property owner. If you have a mortgage on the property you live in I’d say you definitely want an offset account linked to that property. If you already have an offset account linked to your home then there aren’t too many good reasons to have a second offset account linked to an investment property. Why leave cash in the investment offset account when that cash could be in the owner-occupied offset account offsetting the ‘bad debt'(non-tax deductible)? Don’t offset ‘good debt'(tax deductible) when you could be offsetting ‘bad debt’.
WHO IS THE BEST MORTGAGE/FINANCE BROKER IN THE COUNTRY?
Short answer is Financial Engineers.