Finance Quiz: Building Confidence in Property Financing by admin | Oct 25, 2023 | 0 comments Welcome to your Finance Quiz: Building Confidence in Property Financing Name Email Phone What does LVR mean? Loan-to-Value Ratio Low Variable Rate Lending Value Regulation None How does LVR impact your property deposit? It influences the amount of interest you'll pay. It dictates the length of your mortgage term. It determines what percentage of deposit you need for your purchase. None What is LMI? Liability Management Initiative Lenders Mortgage Insurance Loan Management Information None How does it impact your purchase? Unless you have a 20% deposit or more, you will be charged an insurance premium to cover the bank's risk above 80%. It enables you to secure a lower interest rate. It requires you to take out a second loan for the deposit. None What is Buying Power? It relates to the strength of your credit score in securing a loan. It refers to the purchasing capacity you have after selling your previous property. It tells you how much you can leverage your deposit based on your LVR. None How is it calculated? It determines the value of the house you can purchase based on your savings. It affects your ability to negotiate loan terms. It helps in planning your financial strategy for the future. None Why is Buying Power crucial to understand? It measures your ability to repay a loan over a specific period. It is the total amount of debt you can accumulate without penalties. It refers to the calculation made by a bank or broker to determine how much you can borrow based on your income and expenses. None What is borrowing power? It indicates the financial assistance from family or friends for your deposit. Genuine savings means you need to show a saving history to build your deposit for at least 5% of the purchase amount to be approved for a loan. It is a type of grant provided to first-time homebuyers. None What is genuine savings and why is it important if it's your first purchase? It lists all your past employment and income details. It's a record of all your lending history in your life including inquiries, loans approved, and defaults. It tracks your utility and other bill payment history. None What is Your Credit File? It represents the total number of credit cards you own. This score, calculated on all your lending and repayment history, including bills such as utilities, determines if lenders will give you a loan. It indicates your monthly income level. None What is your credit score and why is it important? This is an important decision that most people get wrong. Having a purchasing plan and good buffers means you can negate risk and not miss opportunities. It depends on the type of property you are buying. It is irrelevant if you have a stable income. None Should you fix your rates or leave as variable? Interest only is preferred for any type of property. Principal & interest repayments are always better. If you are buying your own home, the focus is to pay off the principal loan amount. For investment purposes, we normally choose interest only as we want to get the maximum deductions. In today's market, it's worth investigating what interest rates you get with both options. None Is it better to have principle & interest repayments or interest only? If you are buying your own home, the focus is to pay off the principle loan amount. For investment purposes, we normally choose interest only as we want to get the maximum deductions. In today's market, it's worth investigating what interest rates you get with both options. It's not important and doesn't matter It depends on your financial situation and goals. None Is getting an offset account against my property loan a good idea? This won't affect my loan in anyway Yes, an offset account has many benefits. I'm unsure None Which option is better when looking for a property loan, a bank or broker? Broker: A broker deals with a multitude of banks and is more likely to provide a larger product range to choose from in line with your strategy and personal lending position. One bank generally has a limited range of options though on occasion they may offer a lower rate. Bank: They offer direct loan options and might have exclusive deals. It depends on your personal preference and financial knowledge. None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment.
