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When it comes to understanding home loans and mortgages, having the right information can make all the difference. Whether you’re a first-time home buyer, property investor, or looking to refinance, it’s only natural to have questions. That’s why we’re breaking down the top questions Australian borrowers ask our experienced Yellow Brick Road mortgage brokers.
1. What’s the difference between a mortgage broker and a lender?
Chris Roccisano – Yellow Brick Road Sunbury
“Think of a lender as offering one option, while a mortgage broker brings you a buffet. A lender will provide loan products directly, based on their specific policies and rates—no more, no less.
“A mortgage broker, on the other hand, works with a variety of lenders to find the loan options best suited to your needs.”
“We are your advocates, here to simplify the process, negotiate on your behalf, and help align your financial strategy with your goals.”
Our Expert Tip:
“Many clients appreciate our ability to identify opportunities, such as offset accounts or repayment strategies, that suit their lifestyle and financial plans. Recently, a client approached me after their bank denied them a loan due to its strict serviceability criteria. Using our network of lenders, we were able to find several suitable options, ultimately securing them the funding they needed to purchase their dream home.”
In short, mortgage brokers give you:
- Choice: Access to dozens of lenders, offering more options.
- Guidance: Expert advice to help you understand loan products and structures, like offset accounts or repayment strategies.
- Advocacy: We negotiate on your behalf, saving you time and effort.
Dion Villiers – Yellow Brick Road Leppington
“It simply comes down to choice.”
“A bank has 1 policy and one set of rates that they can offer you and it may not be the most suitable option available for your circumstances.”
“Just this week I had a customer who asked me to review their home loan as they were coming off a 4-year fixed rate of 2.06%.”
“Their bank offered a variable interest rate of 7.43%! The increase on their repayments was going to be a major hit to their budget.”
“We discussed their plans, and put together a strategy that would improve their cashflow drastically.”
“We got them to make the minimum repayments for the next few years while the kids are at school. Once they leave school, the customer will direct the school fees into making extra repayments to knock down their loan quickly.”
“With some negotiating with the bank, we were able to structure a 1 year fixed rate at 5.84% rolling off to a 6.04% variable rate, over 30 years to be able to reduce their repayments while the kids are still at private schools and then allowing them to repay the loan quicker as their cash flow improves.”
Our Expert Tip:
“It’s better to ask and be sure than to assume. Many people don’t realise that there are multiple loan options available to them, each with its own set of pros and cons.”
2. How much deposit do I need to buy a home in Australia?
Andrew Kalogirou – Yellow Brick Road Rosanna
“The answer isn’t always a straightforward one – but it can be as little as $0…if you can get a security guarantor!”
“Deposits can range from as little as no deposit for eligible borrowers with a guarantor (such as a family member who offers their equity as security) to the standard 20% of the home’s purchase price for those wanting to avoid Lender’s Mortgage Insurance (LMI).
“However, there are options that work for many buyers.”
- “First home buyers can often purchase with as low as a 5% deposit, using the Federal Government’s First Home Guarantee Scheme.
- Single parents and those who have not owned property in the past 10 years may qualify for even lower upfront requirements (e.g., a 2-3% deposit).
- For most buyers, a deposit of 5-7% plus LMI is a common scenario.”
Our Expert Tip:
“Too often clients are hyper-focused on the deposit number…this can mean that you don’t plan for the other additional up front costs when making a purchase, like stamp duty, transfer fees, legal and conveyancer fees.”
“To find out exactly how much deposit you need, it’s always worth chatting with a mortgage broker to understand your specific requirements.:
3. Does pre-approval help my chances of buying a home?
Effie Nicol – Yellow Brick Road Earlwood
“Absolutely! A pre-approval is like an early thumbs-up from a lender. It provides clarity on how much you can borrow, making it easier to shop within your budget and bid with confidence should you be involved in an auction.”
“Pre-approval also signals to sellers and real estate agents that you’re a serious buyer, which can help enormously in negotiations.”
“One of my clients had an expiring rental lease and needed to secure a property fast. With a pre-approval in hand, he was able to act quickly and negotiate strongly, beating out another buyer to secure the home he wanted.”
The benefits of pre-approval:
- Budget clarity.
- Greater negotiating power.
- Confidence at auctions.
4. Can I refinance my home loan to get a better rate, and when is the best time to do it?
Chris Roccisano
Yes, you can! Refinancing allows you to switch to a loan with a more competitive rate or better terms, potentially saving you thousands. The best time to refinance is:
- When interest rates drop.
- If your current fixed term is ending.
- If your property’s value has increased, giving you access to better loan-to-value ratios.
For example, I had a client whose fixed rate of 2.06% was about to revert to over 7%! By refinancing and restructuring their loan, we secured them a more manageable fixed rate of 5.84% for 12 months, followed by a competitive variable rate—saving them significantly while providing flexibility for future changes.
5. Is it harder for self-employed borrowers to get a loan than being employed?
Andrew Kalogirou
“In short, no.”
“When it comes to securing a loan as a self-employed borrower, the process can seem more complex, but it’s not inherently harder—it’s just different. Banks and lenders typically require specific documentation to verify income, which can be less straightforward for self-employed individuals than for those on a standard PAYG income.”
“Here are some important points to consider:”
- Up-to-date tax returns are key
Lenders will generally request your most recent tax returns and financial statements to assess your capacity to repay the loan. Ensuring these are complete and accurate is an essential first step.
- Alternative documentation options are available
If your tax returns are not up to date, there are alternative document (alt doc) loans designed for self-employed borrowers. These options often require bank statements, BAS statements, or an accountant’s declaration to substantiate your income.
- Unpaid tax debt isn’t necessarily a roadblock
If you have equity in a property, there are lenders who can provide solutions even if you have outstanding tax debts. This may involve consolidating debt or other tailored strategies.
- Specialist guidance makes a difference
Working with a broker who specialises in self-employed loans ensures your financial situation is understood in its entirety. We collaborate with your accountant to present a clear picture to lenders and tailor a loan solution that fits your circumstances.
- Lender expertise varies
Many banks and lenders are unfamiliar with the nuances of certain business structures. That’s where we come in—to bridge that gap, present your case effectively, and secure the financing you need.
The bottom line? Being self-employed doesn’t disqualify you from accessing competitive loan options. With proper preparation, the right guidance, and a broker experienced in working with self-employed borrowers, you can achieve your financial goals with confidence.
6. What happens if I can’t meet my home loan repayments?
Dion Villiers
“This is the hot topic of the moment. With the increase in the cost of living and interest rate hikes, it’s become a real challenge for a number of Aussies to manage their finances and their mortgage.”
“The first step is to contact your mortgage broker or lender before you miss any repayments.”
“Your mortgage broker can negotiate on your behalf and explore refinancing options that may better suit your current financial situation. For instance, extending the loan term or consolidating debts could reduce your monthly financial commitments.”
“These measures are designed to help you regain control over your finances without facing immediate penalties or risking foreclosure.”
“You need to be more careful now when talking directly to your lender, particularly since COVID and the term “financial Hardship” has come into play.”
“If you call your lender, they are very good at assisting in pausing payments and they really do want to help you, which is great, however since COVID, lenders now add a “financial Hardship” notation on your credit file which stays on there for 12 months.”
“Even if you need 1-2 months relief for a short term challenge, I have seen customers have a hardship flag on their credit file and it makes it harder to re-arrange, refinance or look for new finance with that hardship flag in place.”
Expert TIp:
“Remember, ignoring the problem can worsen your financial difficulties. Being proactive is the best way to protect your financial health and work toward a sustainable solution.”
Effie Nicol
“If you’re struggling to meet your repayments, or you’re feeling the pinch more than you’d like, the first step is to contact either your mortgage broker or lender immediately to explain your situation. Many lenders offer hardship arrangements, such as pausing or reducing payments temporarily.”
“For example, I recently assisted a young couple in financial stress after an unexpected family tragedy. By working with their lender, we secured a hardship agreement, providing much-needed breathing room while they resolved their finances.”
Golden rule:
“Reach out before you miss a repayment. This can help maintain your credit score and avoid additional complications.”
Empower Your Home Buying Journey with Expert Guidance
There’s no one-size-fits-all solution when it comes to home loans, which is why having the right advice is so critical. At Yellow Brick Road, our experienced mortgage brokers are here to simplify the process and help you make confident, informed decisions that align with your financial goals.
Whether you’re a first-time buyer, looking to refinance, or exploring investment opportunities, our local mortgage brokers make sure your loan matches your life, not the other way around.
We have you covered on all stages of your property journey. Let’s talk!