Financial Services

Below is a brief summary of our Financial Services. (We will be expanding & updating the content shortly).

Home and Investment Loans

Home & investment loans are available for a range of purposes including:

• Purchasing a home
• Construction of a new home
• Refinancing an existing loan
• Home improvements or renovations
• Debt consolidation
• Purchasing vacant land
• Buying a car, travel, or any other worthwhile purpose

Standard Variable Rate Loan

The most popular home loan product today is the Standard Variable Rate loan, yet hardly anyone pays the standard variable rate.  That's because the banks all offer significant interest rate discounts for larger loan sizes - you will usually get a 0.50% discount for loans over $150,000 and a 0.70% discount for loans over $250,000 and a discount of up to 1% for loans over $750,000.  Get Smart Financial Services can sometimes negotiate with the bank for higher discounts than this if the loan is over $1,000,000.  The advantages of a Standard Variable Rate loan are that they are very flexible with special features like:- extra payments at any time without penalty, redraw of these payments, the loan can be linked to a savings offset account, you can pay weekly fortnightly or monthly, get a repayment holiday, and more.

Basic Rate Loan

Most of our Banks and Lender's now offer a Basic Variable Rate loan, and these can be up to 0.65% below the Standard Variable Rate loan. While with a Standard Variable Rate loan, you will have to pay an annual fee of say $300 to $400 per annum to get the 0.70% discount, with a Basic Variable Rate loan there is usually no monthly or annual fees.

Fixed Rate Loan

This loan is especially suited to those who desire the security of knowing what their repayment will be.  If interest rates increase, then a Fixed Rate loan will not be affected.  Most lenders offer Fixed Rates from 1 to 5 years.  After the Fixed Rate expires you may re-fix the loan for another period, or roll over to the Variable Rate.  We are available to offer you free advice on this at all times throughout your loan term.

Introductory (or Honeymoon) Rate

Most lenders will offer a very low rate to entice a borrower, normally over a 6 month or 12 month period.  However these loans generally revert to the highest Standard Variable Rate after the Honeymoon period is over, so in the long run these loans are nowhere near as attractive as they appear.  They also have high early repayment fees in the first 3 or 4 years.

Line of Credit / Equity Loan

These products first became popular in the mid 1990's as a tool for debt reduction strategies.  A Line of Credit loan allows you to have your salary paid directly into the loan, therefore reducing the interest charged on your loan.  They also have access via a Visa Card that allows ATM use, EFTPOS etc.  However to make a Line of Credit work effectively they require strong disposable income and the ability to adhere to a budget. We have vast experience with these products and are happy to advise if a Line of Credit is suitable for you.

No Deposit / 100% Loan

As of early 2009, all the banks have removed the 100% loan product.  Most lenders will now allow you to borrow a maximum of 95% of the purchase price of a property (or 90% maximum in some cases).  This means if you are a First Home Buyer you now need a minimum 5% genuine savings to buy your first property.

Low Doc Loans

These loans allow self employed borrowers to borrow funds without having a complete set of up to date Tax Returns. Originally back in the year 2000, they were very simple to obtain. But they underwent a major transformation after the turmoil in Credit Markets in 2008.  Basically instead of tax returns you can provide at least 2 alternate forms of proof of income, like Business Activity Statements, Business Trading Statements, or a Letter from your Accountant confirming your income.  Mostly these loans are at higher interest rates, but some banks and lenders offer exactly the same interest rates as other fully verified loans.  Low Doc Loans do however vary significantly between lenders, so we will guide you through the best option for your circumstances.

Land

If you are looking to buy a vacant block of land, you are able to borrow up to 95% of the purchase price.  You have the choice of Variable Rate or Fixed Loans.

Construction Loan

These loans are used when you have signed a contract with a builder to construct a new home.  The land is used as security, and depending on the value of the land and how much you owe on the land, you can borrow up to 100% of the building contract price plus extra funds for landscaping, pools, fencing, curtains, carpets etc.  A construction loan is divided into progress payments (or draw downs) as stipulated in the building contract, and the builder is paid in instalments at the completion of each stage of the construction.  You are only required to pay Interest Only repayments on the progress payments right up until the final drawdown and full completion of the home, then you choose which loan type you would like and begin making normal repayments.  These loans are also available for Owner Builders but the project must be overseen by a Licensed Builder or Architect, and Owner Builders generally can only borrow a maximum of 70% of the construction cost.  Loans are also available for house and land packages whereby you are purchasing the land and the house package at the same time.

Bridging Loans

These loans are used to help you purchase a new home even if you have not yet sold your existing loan.  The lender will allow you to borrow the full 100% purchase price plus all fees associated with the new home, then as soon your previous home is sold you deposit the net proceeds of the sale into the Bridging Loan.  Interest rates and fees are exactly the same as for standard variable rate loans, but the bridging term will usually be for a maximum 6 months.

Reverse Mortgages

These loans are suited to those aged over 60 years, who have equity in their own homes.  In the past if a retiree required extra funds then they would have to sell the family home, downsize, borrow from family members, or simply adjust their lifestyle so they can make ends meet. A Reverse Mortgage allows you to unlock some of the equity in your home.  The purpose may be for travel, home improvements and maintenance, long term medical or care expenses, debt consolidation, help out younger family members, or simply to provide an additional ongoing income stream to supplement existing pensions.