Refinancing involves paying out your current loan with a new one. A refinance may also occur when the terms of an existing loan are revised, such as interest rates, payment schedules, loan structure, or other terms.

The best time to refinance your mortgage is when interest rates are lower than your current rate. It also makes sense to plan ahead for when your fixed interest period is about to expire, and your loan will convert to a higher rate than the alternate rates available. In both situations, a change could reduce your monthly payments and help you to pay off your mortgage faster.

Refinancing is about more than just rates. There are numerous other factors that impact a decision to refinance. You may be looking to access equity from your property to fund an investment property or other investments. Different lenders have different criteria for evaluating your servicing capacity. A change of lender may provide you access to more of your equity, provide extra funds, or allow a higher purchasing power.

A cash-out refinance gives you a lump sum when you close your refinanced loan. The loan proceeds are first used to pay off your existing mortgage(s), including costs and prepaid items; the remainder of the borrowed funds are paid to you. A lender having a different servicing buffer or shading rate in the calculation, could make a significant impact on your borrowing capacity by hundreds of thousands of dollars.

Before committing to the refinancing process, we suggest that you start by speaking with your existing mortgage provider. Ask them how they can adjust your loan to more favourable terms. Banks are known to offer better rates and introductory deals to acquire new clients, while treating their existing clients like their property. Ask them what’s their best rate? Request a discharge form, and then see what their best rate really is – then before you commit, come to us! Armed with your bank’s best offer, we’ll see if we can save you money with different options.

The aim is to ensure that you achieve an overall benefit from refinancing. It is important to note that there are upfront costs associated with refinancing that need to be considered. In addition, the long-term impact should be accounted for too. As an example, a longer loan term could result in lower monthly payments, but due to the extended loan period, result in higher overall costs over the life of the loan.

At Clever Lending we will review your lending circumstances, give you an understanding of how your repayments may change, and the costs associated. We will ensure that you can make an informed decision about switching your home loan.

Want to know more about Refinancing? Make it easy – Book an Obligation Free Lending Consultation Today.

If you are at risk of default on your existing loan, before you miss a payment, we suggest that you talk to your lender about their financial assistance solutions, or financial hardship support services.

Equity is the value of your ownership stake in an asset, the difference between its market value and the amount you owe on the asset. The ongoing growth of Australian Property prices has provided a handy equity increase for many homeowners. These are effectively, unrealised savings locked in your asset, until the property is actually sold.

This growth in equity value creates a lending opportunity. Supported by the right income, you can borrow from this equity, unlock it and put it to work. This could allow you to take advantage of Investment opportunities, to upgrade your home, or make those home improvements you’ve been putting off. It could fund your next investment property without needing to use your cash savings.

Not all of your equity will be available, unless you sell the property. Lenders will want you to retain a percentage of ownership or equity in the overall portfolio. They will lend up to a maximum Loan Value Ratio (LVR), and potentially charge you Lenders Mortgage Insurance (LMI) if the total LVR is above 80%.

Different lenders have different criteria for evaluating your servicing capacity. This impacts how much each lender may provide you of your equity and your purchasing power. A lender having a different servicing buffer or shading rate in the calculation, could make a significant impact on your borrowing capacity potentially by hundreds of thousands.

How you structure your lending when accessing your equity is also important. Depending on the intended purpose of the accessed funds, there may be taxation considerations that will impact how to best structure your lending. Where some of the lending is not tax deductible it may mean the loan should be split and structured differently to avoid creating tainted capital, whilst also maximising deductibility.

When it comes to upgrading your home, there is the all-important question of what to do with your current home. Can you keep it? If you keep it, how much can you borrow? Should you Keep it?  If it’s going to become an investment property, how do you structure the lending? There is an extra level of complication to be considered around the potential impacts of Capital Gains Tax (GCT) and Principal Place of Residence (PPOR) CGT exemptions.

At Clever Lending, with over 25 years of Accounting, Financial Planning and Lending experience we have the knowledge and expertise to review your strategies and provide the right solutions to suit your lending needs.

Want to know more about accessing equity? Make it easy – Book an Obligation Free Lending Consultation Today.

A Bridging Loan is a short-term loan to allow you to finance the purchase of a new property while you are still selling your current property. In a competitive property market this type of facility allows you to purchase the ideal property instead of missing out due to timing. It takes the stress out of trying to align settlement dates or moving out without a permanent place to live and then having to move twice.

It’s essentially giving you a line of credit to cover the ‘bridge’ between purchasing the new property and receiving settlement funds on the old. You will need to be able to demonstrate your ability to make repayments, usually interest only, on the total debt during the bridging period. You effectively borrow more money than you ordinarily could, as the lender understands the debt will be reduced once the property is sold and the bridging loan amount paid off.

Taking out bridging finance has its risks. You need to ensure its financially possible for you to manage two loans. The longer it takes to sell, the more interest you pay. If you sell your property for less than expected, you may end up with a higher loan then expected and be charged a default interest rate. You could also find yourself forced into selling your original property at a lower price than you were hoping, just to meet the conditions of your bridging loan. Worse case, if you don’t sell your property in time, the bank may step in and force the sale, so you may lose the property and still owe money.

At Clever Lending we understand the pros and cons of bridging finance. We can help you to weigh up the alternatives and decide if bridging finance is right for you. Want to know more about bridging loans? Make it easy – Book an Obligation Free Lending Consultation Today.

Property is one of Australia’s favourite investment asset classes. This is primarily due to favourable tax treatment and the ongoing growth experienced in Australian property prices. The use of lending allows buyers to use a relatively small percentage of the purchase price to hold a high value asset and capitalise on the growth of that asset over time.

From a tax perspective, a lot of property investors take advantage of Negative Gearing. This is a strategy of investing borrowed money in a manner that results in a loss that can be claimed as an income tax deduction. This happens when the claimable costs of owning a rental property exceed the rent returns you earn.

Property receives favourable tax treatment in a few ways. Depreciation and Capital Gains Tax (CGT) Discounts are two examples. An investment property owner can claim depreciation costs, using a depreciation schedule, even though the costs are not actually incurred by the investor. The use of depreciation makes it possible for the right properties to have a positive pre-tax cashflow and yet still be negatively geared.

Ideally a negatively geared property will return a future Capital Gain for the investor. Depending on the holding structure used and duration of ownership, current tax laws provide significant CGT discounts to the investor when they sell the property.

From a lending perspective, the purchasing process of an investment property is similar to any other property, however there are some additional factors. The rental income, running costs, and negative gearing impacts are all considered, which tends to positively impact borrowing capacity.

When structuring the lending, consideration needs to be made of your entire debt position. A goal of a lot of investors is to minimise non-deductible debt and maximise deductible debt. If a portion of the total lending is not tax deductible it may mean that the loan should be split and structured differently to avoid creating tainted capital.

For investment properties, only the Interest payment on a loan is tax deductible, which is why Interest Only loans are popular with many property investors. This lending approach free’s up the cash that would have been used to pay the principal for other purposes, like investments, cashflow, or reducing non-deductible debt.

At Clever Lending we understand the intricacies of investment property lending. We can help ensure you structure your lending right. We can also provide construction lending, commercial property lending and have access to private lending for more complex or larger scale development needs.

Want to know more about investment property loans? Make it easy – Book an Obligation Free Lending Consultation Today.

If you’re in the process of deciding whether to renovate or detonate, you need to understand the dynamics of construction lending. When it comes to construction, the usual lending approach changes as the risk to the lender is different.  This is because the value of the loan security is based on the projected future value of the finished property, rather than its current value. This is known as an “as if complete” valuation.

The completion of the construction is important to both the borrower and the bank. The building contract is a pivotal factor in providing confidence to the bank that the money is appropriately being allocated. It also helps to demonstrate the value in the planned end product, which becomes the security of the lending.

As construction comes with additional risk factors, Lenders also adjust their processes to mitigate construction risk. Rather than a single drawdown at loan approval, they divide the loan drawdown into different stages. This is to help ensure the funds are used correctly, before providing additional funds. As the amount drawn down increases with each completed stage, your repayments proportionately increase.

After the initial deposit, there are typically five stages of building a house. These include the Slab or Base stage, Frame, Lockup, Fit-out, and Practical Completion. At each stage, once completed, your lender will provide finance for the next stage of construction. This means that at each stage your lender will inspect the property, or require sign off by you, before releasing any funds.

The banks usually have preset percentages of the total lending that they are willing to provide at each stage. They set these limits to provide security that the builder has enough funds budgeted by stage, and to ensure there is sufficient incentive to complete the build before being fully paid. They seek to ensure the builders profit is in the final payment, which hinges on completion.

When it comes to House and Land packages, you will generally require 2 loans. The first loan is to secure the land and is fully drawn on settlement. Where the property is part of a new development, this loan will settle shortly after the land is registered. The second loan is for the construction of the building and will follow the Construction Loan process outlined above. These loans are typically structed as Interest Only Loans for the period of construction, and then adjusted after completion, based on the purpose of the property and the realised value at completion.

Given the extra risk factors of construction, not all lenders provide construction lending. For those that do, there is a wide variety of products available to support different project types. In addition, lenders have different approaches to servicing and how they treat existing debt and projected income, making it complex to determine which option will best provide the funds you need.

At Clever Lending we have access to construction lending to support developments from simple renovations, granny flats, knock down rebuilds, to multi dwelling developments. We can help you determine your budget and seek to secure pre-approved construction finance.

Want to know more about construction loans? Make it easy – Book an Obligation Free Lending Consultation Today.

In some cases, you may find a project that has merit and the capacity to generate a strong return upon completion, but you lack the capacity to service the loan during construction. We have potential solutions for these circumstances too – see our Land Development Lending section.

Buying your first home is an exciting achievement and one of the biggest financial investments you’ll likely make in your life. It’s an exciting and challenging new experience in a competitive and complex landscape.  It is a key milestone, but one that can prove to be daunting without the right support.

There are so many legal and technical questions to be answered, along with doubts to be overcome. As your broker we are here to answer those questions, to educate and inform, and to help make your journey smoother.

We’re here to provide expert advice so you can make informed lending decisions. We’ll ensure you have a complete understanding of the process starting from lending, to what happens when you find the property, right through to settlement.

The key starting point, and often the hardest obstacle to overcome is accumulating the deposit. This is where the government has stepped in by providing incentives, grants, and financial assistance, designed to help make it easier to buy a first home. These can provide a substantial boost to your savings and help you get into your first home sooner.

Government incentives are generally state based and are regularly updated. For NSW based first home buyers there are currently 5 key incentives available to assist in buying a first home. Each has its own eligibility criteria.

• The First Home Buyers Assistance Scheme – provides Full or Partial Stamp Duty exemptions for eligible properties below $1M.
• The First Home-Owner Grant (New Home) – provides $10,000 towards the purchase price of eligible properties.
• The Shared Equity Home Buyer Helper – where the NSW Government will pay up to 40% of the purchase price of an eligible property, retaining it as equity.
• The First Home Super Saver – lets you use your superannuation fund to save for your home, which may provide tax benefits. You can apply to use up to $15,000 of your voluntary contributions from any individual financial year, capped at $50,000 in total across all years.
• Home Guarantee Scheme (HGS)- Eligible buyers can purchase or build a new home with a deposit of as little as 5%, or as little as 2% for eligible single parents, without the need for lenders’ mortgage insurance.

In addition to the Government incentives, asking a family member for a loan or to be your guarantor could also help you buy your first home sooner. A guarantor agrees to repay the home loan if you can’t meet your repayment terms and conditions. They offer security to the lender in the form of assets to support the loan application.The added security of a guarantor means that you can borrow more for your home purchase or reduce the LVR and avoid LMI. The main risk to the guarantor is that the bank has the right to that security in the event of default. The Guarantor could potentially lose their property or suffer other financial losses.

At Clever Lending we’ll help you understand your eligibility for the government incentives and grants available. We will let you know how much you can borrow, what deposit you’ll need, and importantly, what your repayments will look like. We can also assist with Guarantor lending too. Want to know more about first home buyer loans?

Make it easy – Book an Obligation Free Lending Consultation Today.

A low deposit loan is where you have a deposit of less than 20%. When you borrow more than 80% the lender considers the home loan higher risk and will typically require Lenders Mortgage Insurance (LMI). This is insurance for the lender, paid for by the borrower, to insure the lender against mortgage default. It protects the lender, not the borrower.

If you are prepared to pay LMI, which can be expensive, there are many banks that will offer lending of up to 95% LVR. Some will lend to that level plus the LMI premium, others will lend to that level inclusive of the LMI premium.

If you already own property, you could potentially purchase an additional property with zero cash deposit by utilising the equity in your existing property. You essentially borrow the required deposit from your equity in your existing property, and then borrow the balance of the purchase price against the new property – See our page on Equity Upgrading.

There are only limited opportunities to avoid paying LMI when you have a low deposit. You could consider adding a Guarantor to your home loan. You may qualify for the government Home Guarantee Scheme (HGS). Lastly, some banks offer LMI Waiver options for certain professions – See our page on Doctor Finance and LMI Waivers.

One way to avoid LMI is the Home Guarantee Scheme (HGS). This is an initiative to support eligible home buyers to buy a home sooner. The Scheme is administered by Housing Australia who have authorised a panel of Participating Lenders to offer the Home Guarantee Scheme to home buyers. The HGS avoids the need for LMI because Housing Australia provide a Guarantee to the Participating Lender for the difference between the 20% deposit and the minimum deposit needed to be eligible for the scheme. There are three types of Guarantees, each has specific eligibility, limited places and specific price caps.

First Home Guarantee (FHBG) – supporting eligible home buyers to buy a home sooner, with a deposit as little as 5%. For FY2024-25, 35,000 places are available.

Regional First Home Buyer Guarantee (RFHBG) – supporting eligible regional home buyers to buy a home sooner, in a regional area, with a deposit as little as 5%. For FY2024-25, 10,000 places are available.

Family Home Guarantee (FHG) – supporting eligible single parents and eligible single legal guardians of at least one dependent to buy a home sooner, with a deposit as little as 2%. For FY2024-25, 5,000 places are available.

Aside from the Government HGS, asking a family member to be your guarantor could eliminate LMI. A guarantor offers additional security to the lender in the form of assets to support the loan application. This added security reduces the LVR and could eliminate LMI.The Guarantor is bound to repay the home loan if you can’t meet your repayment terms and conditions.  The main risk to the guarantor is that the bank has the right to that security in the event of default. The Guarantor could potentially lose their property or suffer other financial losses.

At Clever Lending we have accreditation with a numerous lenders offering loans up to 98% LVR with LMI. We are accredited with a number of the participating HGS lenders, giving us the opportunity to assist you with accessing the Home Guarantee Scheme. We can also assist with Guarantor lending. We’re here to help make your home buying dream a reality.

Want to know more about low deposit lending? Make it easy – Book an Obligation Free Lending Consultation Today.

As a doctor, you likely already know, most lenders offer attractive interest rates and favourable lending conditions for doctors. They understand that it’s pretty hard to be an unemployed doctor, so the risk of lending for them is low. However, when it comes to the finer details, there are a lot of complexities to the lending market.

We believe that a knowledgeable trustworthy service is critical. With close to a decade of providing financial advice and guidance to hundreds of doctors we thoroughly understand the medical profession and the career path ahead of you. We know how hard you work, and we know how little time you have.

We understand the award system and loadings. We understand Locum Income. We understand GP income. We understand the complex structures used when establishing a practice. We understand SMSF and Trust Structures. We’ve seen it all.

We can support you with Residential and Investment property lending, Refinancing, Vehicle Finance, Practice acquisition, Commercial lending, Lines of credit (secured and unsecured), Working capital and equipment, SMSF Loans, and more.

No matter which direction you take in your medical career, Public, Private, or Locum, our role is to guide you through the complexities of the lending market and to choose the most suitable finance options.

At Clever Lending we know how little time you have, so have efficient systems in place to minimise the disruption to you and make the collection of information easy. We offer after hours service to suit your timeframes. In addition, our network of highly skilled trusted support service providers allows for a smooth integration and a seamless approach.

Want to know more about Doctor finance? Make it easy – Book an Obligation Free Lending Consultation Today.

There are many banks that offer lending of up to 95% LVR, some more, however, when you borrow more than 80% the lender tends to consider the home loan higher risk. In this situation they will typically require Lenders Mortgage Insurance (LMI) or a risk fee. This is insurance for the lender, funded by the borrower, to insure the lender against borrower mortgage default.

That said, a number of banks offer LMI Waivers to select professionals in certain fields, such as medicine, law, engineering, accounting, mining specialists, professional athletes, and entertainment professionals. This is often accompanied by interest rate discounts in professional packages. These banks want to attract these kinds of borrowers, who are generally less risky because of their high incomes and mostly stable employment prospects.

The lenders will have eligibility requirements and usually require evidence of your profession and registration. They may also require proof that your income is being earned in that capacity. There are minimum income thresholds, before being approved, however, it is possible to qualify for an LMI waiver with a combined income.

Avoiding LMI will save you significant costs. At Clever Lending we can help you determine if you qualify for an LMI waiver. We have accreditation with numerous lenders that provide LMI Waivers and Professional Packages along with interest rate discounts.

Want to know more about LMI Waivers? Make it easy – Book an Obligation Free Lending Consultation Today.

A growing number of Australians have taken control of their retirement planning and switched to self-managed super funds (SMSF) to help meet their property investment goals. An SMSF is one of the few Super structures that allows you to leverage your Super funds and invest in direct property.

An SMSF loan is a Limited Recourse Borrowing Arrangement (LRBA). It allows you to leverage the funds in your SMSF to purchase an investment property. The limited recourse arrangement protects the other assets of the fund.

Ownership of the property is held in a custodian trust, known as a bare trust, until the loan is repaid. Throughout the life of the loan, the SMSF members have a beneficial interest in the property. Any income generated is used to pay the loan and property expenses, with the rest growing the super balance.

Due to requirements under Australian superannuation and taxation laws, investing in property through an SMSF does come with a few restrictions, mainly around how the property can be used. It’s important to keep in mind that loans for SMSF borrowers can be more complex compared to traditional mortgages or commercial property loans. Additionally, lenders may have different conditions and requirements for their SMSF loans.

Some lenders offer SMSF loans for both residential and commercial property investments, giving you more options. For business owners, it’s worth noting that you could potentially lease your SMSF commercial property to your own business. So effectively, your businesses tax-deductible rent will also be growing your Super.

While the requirements may vary, the lending process typically requires:

• an established SMSF with a corporate trustee
• the SMSF have a ‘compliant’ status with the ATO (Tax up to date)
• the establishment of a Bare Trust, to be custodian of the property
• the property must be a ‘single acquirable’ asset (No Dual Contract House and Land packages)
• a Minimum SMSF net asset balance around $200k

If you have an established SMSF, it’s important to understand that the SMSF lending environment has evolved over the past decade. There was a period where the big 4 banks exited the LRBA market, resulting in only a few lenders providing SMSF loans. This lack of competition resulted in higher fees and interest rates.

Now there are more lenders who have entered the market, resulting in sharper rates. This has created opportunities for astute SMSF trustees to refinance and save significantly over the life of the loan, even when their existing lender has exit / early repayment fees. We have helped SMSF clients significantly cut their rate, which will add a considerable amount to their super balance at retirement.

If you are considering establishing an SMSF or have an SMSF and wanting to invest in property, you should first seek advice from your financial adviser or accountant. If you decide to go ahead, we can help you find the right SMSF loan for your needs.

At Clever Lending whether you’re looking to invest or refinance your existing SMSF loan, we’ve got competitive SMSF lending options for both commercial and residential security loans.

Want to know more about SMSF Lending? Make it easy – Book an Obligation Free Lending Consultation Today.

Just because you’ve started your own business, are a sole trader, or freelance doesn’t mean your home ownership plans have to wait. The key to applying for a home loan when you’re self-employed is having the right documentation and finding the right home loan products for your individual circumstances.

Proving your servicing capacity and income can be more challenging, especially when your accountant has done a great job of minimizing your income for tax purposes. If you don’t have the traditional documents needed for a bank loan, it can feel like your property dreams are out of reach, but that doesn’t mean it’s impossible.

There’s no getting around the fact that lenders will view your application differently when you’re a business owner or self-employed. Not only will the lender review your personal financial position, but they also need to consider your business’ financial position. This means that when you’re self-employed, the process of getting a home loan becomes a little more complicated.

The options available to you will vary based on factors like how long you’ve been in business. Lenders like certainty, so they usually prefer to receive at least 2 years of your business’ performance information to gain an understanding of any seasonal factors that may impact your income stream. They’ll usually want to review your ABN registration history, financial statements, current GST and Tax status, existing liabilities and your credit history. If you’ve recently changed from employed to self-employed and can demonstrate recent work history in the same industry, this may also be considered.

By providing financial statements and maintaining accurate and organised records it helps to demonstrate your business’s stability, growth and profitability. Maintaining a good personal credit history and separating your personal finances from your business finances also increases your chances of showing lenders that you are a reliable self-employed borrower.

If you’ve been self-employed for under 2 years, there are still solutions available to you. A low documentation (low doc) home loan may be the right option when you’re self-employed and can’t supply conventional proof of income. There are many lenders that will consider alternative income verification options to assess potential self-employed applicants. These include Accountant declaration letters, recently lodged BAS’s, and current bank transaction statements.

Whilst a low doc loan is a useful tool for self-employed borrowers to apply for a home loan, the increased risk perceived by the lender may result in a higher interest rate and more limitations in terms of the maximum loan to value ratio (LVR).

At Clever Lending we’ll help you to determine the right option for your circumstances. We ask the questions that matter so we can understand you and your business. We’ll help work out your real net income and the amount of lending you can realistically afford to service on a regular basis.

Want to know more about self-employed and low-doc home loans? Make it easy – Book an Obligation Free Lending Consultation Today.

Your lending needs don’t always disappear just because you’ve retired. While most retirees adjust their costs when their regular earnings stop, there are still lending solutions available, so retirement doesn’t need to mean a complete sacrifice to your lifestyle.

The growth in Australian Property prices has provided a handy equity increase for many home owning retirees, who may now find themselves in the position of being asset rich, but cash poor. One solution for retired homeowners is a Reverse Mortgage.

A reverse mortgage enables you to access the savings in your home, while you still remain the owner of your home and benefit from its capital growth. It allows you to draw on your home equity, without having to downsize and leave the home, community, or social networks you love. The amount of equity you can draw down is determined by your age, property value, and other loan approval criteria.

A key benefit is that Reverse mortgages don’t require regular repayments, so you’ll have more monthly cash available for lifestyle expenses. They are flexible. You could use your home equity as an additional income stream, as a contingency fund to be drawn when required, or as a lump sum that you can use to fund bucket list travel, to renovate your home for better mobility, to pay for health or care expenses, or just to help the kids.

You will have a number of legal obligations, these include continuing to live in and look after your home, making necessary repairs as required and protecting it from damage. You will also need to continue to pay your rates and adequately insure your property.

The debt is repaid from the future sale of the property. Once you move permanently from your home, the entire loan balance will be payable within 12 months. Provided you’ve complied with the terms and conditions, you and your estate are protected by a no negative equity guarantee. This means you will not owe more than the net sale proceeds of your home and you can keep your home for as long as you choose.

Your reverse mortgage interest is calculated on the daily balance outstanding and added monthly to your loan account, meaning your loan balance will increase over time. Variable interest rates mean that there will be changes to what you are charged over time. There are also fees and charges for setting up the loan, depending on what options you select.

Want to know more about Reverse Mortgages? Make it easy – Book an Obligation Free Lending Consultation Today.

We offer Shariah-compliant home financing. Halal loans are loans that follow the principles of Islamic finance, which prohibit charging or paying interest and engaging in haram or speculative transactions.

There is a misconception amongst the general public that Islamic finance is the same as conventional, simply because both specify the finance cost as a percentage. However, what is most important is not the use of the percentage, but what the percentage represents.

Our Halal lender’s business is built by experts and approved by scholars. They are non-bank funded, providing mortgages from investment funds through their Islamic Investment management firm. Their loans are interest free, Shariah compliant transactions, with clear and transparent contracts.

Their Shariah board members are continuously monitoring their operations, systems, and technologies to ascertain that they are adhering to Shariah standards. They have two levels of Shariah governance with an internal compliance function and an independent external Shariah auditor.

Their Halal lending follows these steps: The home buyer and financier agree to share beneficial ownership of the property. The two parties buy the home with the beneficial ownership determined by each party’s down payment. The home buyer makes monthly payments to the financier. Part of the payment is a rental charge for full use of the home, with the remainder of the payment to increase the buyer’s beneficial ownership in the property. Over the course of the arrangement the home buyer acquires more equity and becomes the sole legal and beneficial owner of the property.

Want Shariah compliant lending? Make it easy – Book an Obligation Free Lending Consultation Today.