Ambrose Financial Services

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Your Dreams are Our Goals

Our Frequently Asked Questions.......

How does Ambrose Financial Services get paid?

We aggregate and lodge all of our deals through Finance & Systems Technology (FAST) who has negotiated with the lenders to be paid an upfront and an ongoing trail on the business we write through them.

In most situations FAST will be paid by the lender we arrange the finance through and FAST retains a fee of the upfront and of any ongoing trail. These payments are fully disclosed to our clients.

There are some circumstances under which we will charge a fee for service but this will be fully disclosed at the original interview.

In most cases you will not pay anymore for us to do the legwork for you than you would if you were to do the entire running around and submit the applications to the lenders yourself.

View a list of the Lenders we have access to and what FAST gets paid click HERE

Should I Fix my Interest Rate or not?

This is probably the most commonly asked question that we get, and the answer is always the same, "it depends on you" the client and can be different for everyone.

In my opinion fixed rates suit people who are looking to be able to budget and know that their repayments will not alter for the term of the fixed rate, whether that be 1 year or 10 years, but typically will be 3 to 5 years. 

From a cost savings point there are very few people that I have ever seen who have saved money from being in a fixed rate and financially would have been better off with a variable rate, but that is not to say fixed rates do not have their place and may well be appropriate for you. 

We are happy to discuss these options and look at individual circumstances.


Are there any properties you can't lend against?

Yes, there are some properties that are considered unacceptable security; some of which are -

Converted factory or warehouses, Resort apartments, Hotel / motel rooms, Serviced or managed apartments, Studio apartments that are under a certain size.

But there is no one rule that deems these as certain; for more detailed information on acceptable and unacceptable security, we recommend you speak to us and we will more than happy to assist.


Can I switch my loan between products and features?

Yes, you have the ability in most circumstances to change product types eg. from a standard variable loan to a line of credit, Fixed Rate etc. You also have the choice of switching features within the same product eg changing from interest only repayments to principal and interest.

This of course is subject to lender requirements and in some circumstances may require you producing evidence of income etc. and may require a new application to the lender.

We can assist in arranging any alterations to existing loans including Increases.


How is interest calculated?

Interest is calculated on the daily balance of your loan. If you are paying principle and interest, your loan balance will reduce and the interest charged for the month ahead will be calculated on that reduced balance.

Payments due each month may vary, and this can be primarily attributed to the number of days in each month and the daily balances. Interest payments are charged in arrears.

 

Once I submit an application what happens next? 

The lender assesses the application, whereby credit checks, employment checks (if fully verified), valuations and mortgage insurance is undertaken.

Once all of the above and lending criteria have been met, the loan is then approved.

You will be notified in writing of the approval, should formal approval not be available a request for more information may be necessary.

Soon after approval, you will receive loan contracts from the appropriate lending Institution, you are required to sign and return these, in order for settlement to take place. It is recommended that you have your solicitor or conveyancer check the documents on your behalf.

Once the lender or their Solicitor receives the signed contracts, your loan is booked in for settlement. At settlement, money exchanges between the parties and your new loan is activated.

From this date onwards your obligations under the loan contract commence and you are required to make payments as required.

 

What is Mortgage Insurance?

Mortgage Insurance is usually required when the loan is greater than 80% of the property's value (or as required by the lender) and is a one off payment.

Mortgage Insurance covers the lender in the event you default on the loan and the money from the sale of the property is less than the amount owed on the loan.

This shortfall will be paid by the mortgage insurer, who in turn will look to you for repayment of these funds. Mortgage Insurance covers the Lender and not the borrower (You)

 

What is the difference between self-certifying and fully verified loans?

This is an area that has seen a number of changes since the GFC.

In simple terms Self certified loans, (lo Doc or No Doc Loans) are those where the borrowers confirm their income on a declaration; usually supported by copies of 12 months BAS, an Accountants Declaration, or Bank Statements showing deposits, or a combination thereof. No financial statements are supplied. Interest on these loans will normally be charged at a higher rate. 

Fully verified loans are those where the borrower proves their income by providing evidence such as group certificates, pay slips, tax returns etc. This will be the case for the majority of loans written by lenders today.

 

Why are there charges when I pay out my home loan?

This is also an area that has undergone dramatic change in the last couple of years due to government legislation and lenders are now no longer able to charge an early termination fee.

Fixed rate loans however are completely different and the lender may charge an exit cost based on what interest rate you borrowed at and what the rate is now, they will pass on any loss to the borrower that they will incur. There are a number of factors taken into account when calculating this including how long the loan has to run in it's fixed rate period and the interest differential from when borrowed to when paying out.

 

Why do I need to show genuine savings? 

Genuine savings is money that you have saved in your own name. Savings can be in the form of bank savings, shares etc and is usually over a 6 month period.

Genuine savings are used to demonstrate the borrowers ability to maintain a savings pattern, similar to maintaining a loan repayment pattern.

Secondly, it proves that the borrowers have adequate money to complete the purchase after the loan is applied.

 

Why would I take out an interest only loan?

Usually investors choose interest only repayments to maximise the benefits of negative gearing; that is tax benefits. With interest only repayments you do not pay off the principle (i.e. original amount) borrowed.