Frequently Asked Questions
FAQ- HOME LOAN & FINANCE
What does a mortgage broker do?
Mortgage brokers are professionals in the home loan industry. They work with you to determine your borrowing needs and how much you can borrow. Brokers help to ensure that you don’t take out a loan that is too big for you. Professional mortgage brokers only focus on loans. If you have a toothache, you go to the dentist not a florist. If your car is broken you take it to a mechanic not a librarian. You go to someone trained to help you with your specific need. It’s the same when you need a loan. Brokers have access to a wide variety of loans. This means your broker can find a loan that’s just right for you.
Why should I use a mortgage broker if I can go with a bank?
When we talk about a ‘loan product’ we are referring to the thousands of options that are currently available for you for your loan. Each bank (or lender) has loads of different loan options – low doc, package loans, re-draw facilities, plant and equipment loans, fixed, interest only, interested in advance, variable, introductory variable… the issues you face as a consumer is ‘which loan is right for me?’ And that is where a mortgage broker comes in. If you go direct to the bank, you will only be offered the loan options available through that one lender. As your mortgage broker, we do all the leg work for you. We are across many lenders and all of their loan products and our sole purpose is to find the right loan for your needs.
Do you charge fees for home and investment loans?
We DO NOT charge any fee for our home loan & finance service. Some mortgage brokers charge a fee and some don’t. When you take out a loan via a Mortgage Broker – it does not cost you more. That is an absolute myth. Brokers get paid commission by the bank for bringing new business to them, this does not impact your rate or level of service. Some brokers charge a fee for their service. They must disclose this fee upfront to you so you know what you will be up for if you engage their services.
Don’t you just recommend the lender who pays you the most commission?
Absolutely not! There is legislation in our industry, called the National Consumer Credit Protection Act (or NCCP), that is designed to protect consumers and ensure ethical and professional standards in the finance industry. We tell you upfront what commission we will be getting from the bank. Our job, our only job, is to find the best loan for your needs and serviceability.
Which lenders do you deal with?
I am a Connective Broker. This means that I have access to many lenders – these include the major banks, second tier lenders and credit unions. We can source you a loan from the lender of your choice.
Should I go fixed or variable?
We are only allowed to recommend a product based on what you say is most important to you – for example, “pay my loan off quickly” or “guaranteed repayments”. We do however, live by the following; “if you want flexibility take a variable rate loan, if you want budget certainty take a fixed rate loan, if you want both, then do both”
What is a comparison rate?
The comparison rate is a more inclusive way of comparing home loans that factors in not only on the interest rate but also the majority of upfront and ongoing charges that add to the total cost of a home loan. The rate is calculated using an industry-wide formula based on a $150,000 loan over a 25-year period and includes things like revert rates after an introductory or fixed rate period, application fees and monthly account keeping fees. In Australia, all lenders are required by law to publish the comparison rate alongside their advertised rate so people can compare products easily.
How does an offset account work?
An offset account works as a transaction account that is linked to your home loan. The balance of this account is offset daily against the loan amount and reduces the amount of principal that you pay interest on. By using an offset account, it is possible to reduce the length of your loan and the total amount of interest paid by thousands of dollars. Example: if you have a mortgage of $500,000 but holding an offset account with $50,000, you will only pay interest on $450,000 rather than $500,000.
FAQ- ACCOUNTING & TAX
Can your fee be deducted from my tax refund?
No, as the refund goes directly into your bank account we charge our fee in advance i.e. as soon as the tax return is prepared. Thus, please ensure that you have enough money to pay our fee when you are coming in for your tax return
Do I need to pay your fee if I am not happy with my tax position?
We charge fee for the service and prepare tax return based on the information you provide. As such, you will still need to pay our fee regardless of what your tax position is. However, we guarantee that we will help you legally minimise your tax and maximise disposable income.
What is a standard tax return?
A standard tax return is a tax return with up to 3x employment income and total work expenses below $300. However, we sometime classify more complex return as standard on a case by case basis. Our Accountants will inform you in advance (about additional costs) if your tax return does not fall within a category of a standard tax return.
Can I claim personal super contributions if I am self-employed?
Provided that you satisfy the eligibility criteria, you will be able to claim a deduction for the superannuation contributions you have made to a complying superannuation fund or retirement savings account. To do so you must be fully self-employed or no more than 10% of your assessable income (including Reportable Fringe Benefits and Reportable Superannuation Contributions) is from an employer. You must also have first notified your superannuation fund of your intention to make the claim and received a confirmation.
I buy raffle from a charity. Is it tax deductible?
You cannot claim a deduction for this because it is not a donation to the charity; rather you are receiving something for your money. Buying an item from a charity does not make your purchase tax deductible. The same applies to the purchase of raffle tickets. Only donations to registered charities are tax deductible.
How long do I need to keep my receipts?
Documentary evidence should be kept for five years from the date of lodgement of the tax return in which the claims are made. If you are depreciating an asset the receipt should be kept until the item is fully depreciated (even if over 5 years).
Am I entitled to claim $300 for work related expenses without any substantiation?
You cannot just claim $300. You must actually incur any expense before it is claimable. Whilst you may not need receipts for expenditure up to $300 you must have spent the money and it must be relevant to your employment.
How long will my refund take?
Once you have lodged your tax return, we will let you know if you are entitled to a refund or if you have a tax debt to pay. For online lodgements, most refunds will be issued within 12 business days. However, it may take up to 28 days. If you haven’t received your refund after more than 28 days, get in touch with us and we will chase it up for you.