FAQ
Q. How to make a loan application?
A. Click on loan application button and then fill up the inputs.
Q. What is LVR ?
A. Loan to Value Ratio. It is the percentage of money you borrow for a home loan compared to the value of the property. It is used to assess your risk factor as a borrower; lenders will calculate your LVR before deciding whether or to approve you for a home loan.
Q. What is LVR 80% mean?
A. The Loan to Value ratio (LVR) is the amount of your loan compared to the value of your property. LVR is calculated by dividing the amount of the loan by the value of the property. For example, if the property is worth $250,000 and you have a deposit of $50,000, the LVR will be 80%.
Q, So LVR 80% means I need 20% deposit ?
A. Yup. You have 50K, you divided this by value of the property 250K and your 50K is your deposit.
Q, So why don't banks say 20% deposit ?
A. Because they are not interested in your deposit, they want to know how much are they giving you as compare to the value of the property. This is so that they have a buffer to recover their money when you defaulted. Of course the bigger your deposit, the happier they are to lend money to you. However, it is also important for bankers to reach their KPI, this means the bigger amount of loan the more profit they can earn. Ie it is better to offer a big sum then compare to a smaller sum when both have the same LVR, unless the bank has hit the single customer limit or area limit. This means their overall exposure cannot be more than 5% of their total loan portfolio.
Q. What am I supposed to write ?
A. I have designed this as a free-form application. Most banks are interested in your ability to service the loan, so your income and expenses are critical to them. They also want to know whether you are "stable". These means do you have a job or just a freelancer or someone who make a living from the horses. Of course, if you have been renting the whole time, this will be your best track record to show off to the banks. Please try to be candid and the good old days when mortgage brokers will "assist" are gone. In fact, in my view, they did many borrowers more harm than good by overstating their serviceability and indirectly driven up the property market. The banks also turn a blind eye as they were keen to lend even at astronomical valuations. This sounds familiar ?
Q, I can't get a loan ?
If you can't get a loan from the bank, it really means the payment arrangement is not suitable for your risk profile (read your circumstances). You are better off renting as you are doing now or find a way to make more money like working 3 jobs night and day. Or get come election get rid of the government which caused this to happen. Merely paying higher rates/payments to compensate is a receipt for disaster especially when there is an economic downturn. By going to a finance company which charges a higher rate or private investors (read loan sharks) will do more harm than good. The first option is to examine your own spending habit and try to save more.
Q. If all else failed, what can I do then ?
A. The solution is really in syndicating the loan, ie instead of one bank, several banks may wish to lend to you. Our platform allows many banks to approach you directly and we can arrange for loan syndication. Or you may wish to get a co-owner so you will end up with less than 100% ownership. The co-owner will have a stake say 10% of the property with you owning the 90% with an agreed time to exit say 5 years.
Q. I have submitted my application on your platform what next ?
A. You need to wait once there is an offer from a bank, you will be notify. The bank will need to provide you with their terms. You can accept or reject or ignore.
Q. Do I have to put my real name ?
A. Technically no cause we are not checking who you are. However the bank would like to know when you accept their offer(s).
Q. So is free ?
A. Yup, is free because we are lawyers (with Khai Kwan) and when you execute loan documents you will need independent legal advice, This is a contractual requirement so this is where we come in to give you advice and to sign off that you have received independent advice. Once you get an offer and upon acceptance, you are contracted to use our service to give you independent legal advice. This part is not free and currently we are charging AUD 500 a pop. Please check out our terms at https://bankguru.com/terms.html
Q. What if I don't want your service ?
A. Don't use our free service or you can pay us a break-up fee which is always half of the actual service fee or we can give you a waiver.
Q. What about my data ?
A. Read our plain english privacy page.
Q. I want other types of loans or even insurance etc ?
A. Use our contact form and let us know. We can't promise but we will certainly look into this.
Q. What is this US patent 7493279 ?
A. You can check it out here. This is the only patent in the world that provides for loan syndication by negotiation, this means you can't use this method unless licensed by me (the owner).
Q. I can't find my question here.
A. Use our form in contact us.