Inline Wealth

Congratulations 🎊 Braydan on settling on your new home!

Glad I could help you with the finance!

Such a pleasure working with someone so organized and on top of things!

Principal and interest means every repayment chips away at what you owe. Interest only means you are just covering the interest for a set period, and the balance stays where it is. It is like paying the rent on the money without ever buying it down. Neither one is right or wrong. It depends on what the loan is for, what your cash flow looks like, and what you are planning next.

Lenders mortgage insurance usually kicks in once you borrow more than 80% of the property value. The name catches people out. LMI protects the lender if the loan goes bad. It does not protect you. That does not make it a bad idea automatically. Paying LMI to buy two years earlier has worked out well for plenty of people, and it has also been an expensive way to buy something they were not ready for. Message me before you assume you need a full 20% deposit.

LVR stands for loan to value ratio. It is simply how much you borrow compared with what the property is worth. Borrow $640,000 against an $800,000 property and your LVR is 80%. Think of it as how much of the house is yours and how much is the bank's. That one number decides your interest rate, which lenders will look at you, and whether you have to pay lenders mortgage insurance.

The deposit is the part everyone saves for, and it is only part of the number. On an $800,000 purchase in this example, you also need stamp duty, settlement costs and a buffer for the month after you move in. The deposit gap is $160,000 and the cash you actually need is closer to $220,000. It is like budgeting for a holiday and forgetting the flights. Work out your real number before you start making offers.

Earning good money does not automatically mean a big loan. Lenders look at what is left after tax, living costs and everything you are already paying off. A higher earner with a car loan, a large credit card limit and school fees can end up borrowing less than someone on a smaller income with nothing owing. It is the commitments doing the damage rather than the salary. Follow for more borrowing capacity tips.

Borrowing capacity is not your income. It is what is left once a lender takes out your living costs, your existing debts, and a safety buffer they add on top. Picture a bucket. Your income fills it, then the lender drills a hole for every commitment you already have. Whatever is still in the bucket at the end is what they will lend against. Two households on the same salary can end up with very different numbers. Drop me a message if you want yours worked out properly.

A bank can only tell you what that one bank will do. That is not a criticism, it is simply their job.

A broker takes the same numbers to a panel of lenders and finds out who says yes, who says no, and who says yes with conditions you can live with.

Same income, same debts, genuinely different answers.

It is the difference between asking one shop whether they have your size and asking the whole shopping centre.

Most people think a broker just finds a cheap rate. That is the small part.

The bigger part is working out how the loan should be set up, which lender actually suits your situation, and what this purchase does to the next one.

It is a bit like using a builder instead of buying your own timber. Anyone can compare the price of materials.

What you are paying for is someone who knows how the whole thing fits together. If you want to understand your numbers before you start looking, reach out.