Before you Purchase a Home or Investment Property
How much can I borrow?
What deposit do I need when taking out a loan?
What will my repayments be?
Am I eligible for a first home owner’s grant?
How does the value of my property affect the amount of money I can borrow?
homestar™ Products
What’s a “Principal and Interest” loan?
What's an Interest Only (I/O) loan?
What fees and charges do I have to pay?
How is interest calculated?
What is a comparison rate?
What's special about a construction loan?
Can I use my homestar™ loan to purchase other things besides a property?
The Application Process
What do I need to do to apply?
How long will it take to process my application?
What is a "conditional approval"?
Can I apply for a homestar™ home loan face-to-face with a loan consultant?
How do I refinance my existing home loan with homestar™?
What is a property valuation and why does homestar™ need it?
Now I’ve got my loan, what next?
How can I access my home loan facility to use all of the great features it offers?
Can I make extra repayments, and if so how?
What is a redraw?
How often can I redraw?
What is a Deferred Establishment Fee?
If I move house can I still keep my loan for my new property?
What is the purpose of having a portable loan?
Other stuff
What is lenders mortgage insurance?
How does homestar™ determine the value of my property?
How much stamp duty will I need to pay?
Do I have to pay mortgage stamp duty if I refinance?
Do I need a lawyer?
Glossary
LVR
LMI
Before you Purchase a Home or Investment Property.
How much can I borrow?
You can borrow up to 100% of the value of your property with the homestar™ 100% loan. Most of our other products allow you to borrow up to 97% of the value of your property but you may have to pay Lenders Mortgage Insurance if your loan amount is more than 80% of the value of your property. In most cases the premium for Lenders Mortgage Insurance [link to glossary entry LMI]) can be added to your loan (up to 97% LVR)
To get a better idea of how much you can borrow and the type of information we need to pre-approve your application, please call us on 1300 182 600.
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What deposit do I need when taking out a loan?
With our homestar™ 100% loan you may not need any deposit at all.
However you should make sure you have enough saved to cover the stamp duty, registration, insurance and legal costs that are associated with any loan that you take out, irrespective of the lender. As a guide you will generally need to have at least 5% of the value of the property available to cover these costs. If you need to borrower more than 80% of the value of your property, you will need to allow a bit extra to pay for Lenders Mortgage Insurance.
If you are borrowing 100% of your properties value you may need some genuine savings, but the source of the rest of your deposit doesn't matter – it could be anything from a gift to a government grant or more of your own savings. We’ve happy to help you calculate exactly what you need – call us on 13 18 26.
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What will my repayments be?
Your repayments take into account the annual interest rate, loan term, repayment frequency and loan amount and whether you wish to pay all of the principal back (Principal and Interest) or just the Interest (Interest Only). We can give you an idea of how much your minimum repayment will be if you call us on 13 18 26.
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Am I eligible for a first home owner’s grant?
Generally speaking, you will be eligible for the first home owner’s grant of at least $7,000 if neither you or your spouse (or any other person who is buying the house with you) have owned a home nor claimed the grant previously; are buying a house that you intend to make your principal residence. You can easily find out whether or not you are eligible for a first home owner grant by going to www.firsthome.gov.au where you will also be able to download an application form.
Additionally, each state has further concessions and grants to make it easier for first time buyers. You will find details on each state government’s website. There is a link from www.firsthome.gov.au to these sites. We’ll be happy to help you claim your full entitlements when you apply for your home loan.
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How does the value of my property affect the amount of money I can borrow?
The amount you borrow cannot exceed the value of your property if you live in it, or 97% of its value if it is an investment property. If you borrow more than 80% of the value of your property you will probably have to pay for Lenders Mortgage Insurance.
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What’s a “Principal and Interest” loan?
Principal and Interest (P&I) loan repayments are calculated so that you pay back all of the money you borrowed (principal) and all of the interest that will be charged over the term of your loan. When the term ends (usually 30 years) you will end up with a nil balance on your loan.
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What's an Interest Only (I/O) loan?
An Interest Only loan allows you to pay only the interest on the loan, rather than paying back both principal and interest. At the end of the interest only period (usually five years) you will still owe the full amount you originally borrowed. The advantage with the interest only feature is that the loan repayments are lower during this period. Interest Only loans are popular with investors who are planning to sell the investment property at the end of the term.
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What fees and charges do I have to pay?
For standard applications we have no application fees, no settlement fees, no redraw fees, no additional repayment fees, and no monthly account keeping fees. Wherever possible, we try to avoid charging fees to our customers but depending on your circumstances additional costs may apply.
There will be some costs that you will not be able to avoid like government fees and legal disbursements. The cost to value your property and legally document your homestar™ loan is $595 which we will refund to you on the fifth anniversary of the loan.
For more information about what fees or charges may apply see our fees and charges schedule.
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How is interest calculated?
Interest is calculated on the daily outstanding balance of your loan and charged to your loan account monthly. You can reduce the interest you will pay on your loan by making extra repayments or depositing additional funds into your loan account to reduce your daily balance (homestar™ does not charge you for this). You may be able to redraw these funds when you need them depending how you have set up your homestar™ home loan.
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What is a comparison rate?
The comparison rate is a legislated requirement of all state governments across Australia. The comparison rate provides you with the full cost of your loan after taking into account the lenders ‘advertised’ interest rate as well as all the other fees and charges that lenders usually charge but do not include in their advertised rate. Therefore, the comparison rate is the interest rate that you will pay after fully pricing in all additional fees charged that you will be subject to if you take out a particular loan. Refer to our homestar comparison rate schedule for details.
You will no doubt have noticed that at homestar™ our advertised rates and our comparison rates are exactly the same because with us, what you see is what you get – a really good value for money home loan with super low rates and no extra fees!
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Construction Loans
The homestar™ Construction loan is designed to minimise the amount of repayment required while you are building your house, and are paying rent, or another mortgage.
The loan is drawn down in stages only as your builder needs the money, and only payments to cover the interest are required. Progressively drawn loans also save you interest as the interest is calculated only on the outstanding balance, not the entire loan until construction is completed. Once your new home is ready for you to move in to, the loan will revert to our fantastic homestar™ homeloan.
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Can I use my homestar™ loan to purchase other things besides a property?
Yes you can, and it’s really easy. Our All-in-one and equity loans are designed to allow you to access the equity you have built up in your property (that is the difference between what your house is worth, and what you owe). You can use the funds to acquire other assets such as shares or an investment property, even a new car or a holiday.
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The Application Process
What do I need to do to apply?
All you need to begin your application online are details of your income, current credit obligations (like personal loans and car loans) and available credit limits (from credit cards, store cards and interest fee accounts) and the amount you are looking to borrow.
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How long will it take to process my application?
We can provide you with a conditional approval in a couple of minutes and your loan could be fully approved in as little as 5 days. If you want to find out how we do this click here.
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What is a "conditional approval"?
Conditional approval means that the loan is subject to us verifying that all of the information you have provided to us is correct, and our standard lending conditions are met including, among other things; checks on your credit history, your income being enough to service this loan and your other financial obligations, and a satisfactory valuation of your property. Conditional approval does not allow you to borrow immediately so please don't rely on this to enter into any legal agreements.
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Can I apply for a homestar™ home loan face-to-face with a loan consultant?
In general, we do not offer face-to-face appointments because this would significantly add to the cost of providing you with your loan. We would need to pass this cost on to you in the form of higher interest rates or fees – which we really don’t want to do! Because of the great loan processing technology that we use and the specialised Australian lending consultants that we offer you, we can do all the things that you would typically expect in a face-to-face loan application process by phone and we will do it in a fraction of the time that a face-to-face meeting would typically take.
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How do I refinance my existing home loan with homestar™?
It’s really easy to refinance your existing mortgage with homestar™. Simply follow our 5 step in 5 Days application process and in as few as five days, you can be ready to save real dollars with one of homestar’S value priced home loans.
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What is a property valuation and why does homestar™ need it?
A property valuation is a professional assessment of how much a property is worth. Similar to all lenders, homestar™ requires a valuation of any property that is being offered as security for a homestar™ loan as part of our lending process.
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Now I’ve got my loan, what next?
How can I access my home loan facility to use all of the great features it offers?
Simple! You can use the internet or a touch-tone phone to access your home loan account and check balances, make additional repayments, redraw funds or review recent transactions.
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Can I make extra repayments, and if so how?
Yes, you can make extra repayments either by increasing your direct debit repayment, your salary credit amount or for one-off amounts, via internet or telephone banking. We don’t charge you for making extra payments on a variable rate account.
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What is a redraw?
If you’ve made extra repayments to your home loan you can “redraw” these funds for your own use. While the funds are in your loan account they will be reducing the interest that you will pay, but you can get them back easily when you need them.
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How often can I redraw?
You can redraw at no additional cost to you as often as you like, as long as you have made additional repayments over and above your scheduled repayments.
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If I move house can I still keep my loan for my new property?
Yes, your homestar™ loan is fully portable to your new property however some conditions and costs may apply.
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What is the value of having a portable loan?
This type of loan can be transferred from one property to another. It saves you the costs of setting up a new home loan should you move.
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What is a Deferred Establishment Fee?
A Deferred Establishmenet Fee (DEF) is charged by the lender if you pay your loan out within the first five years. The amount of this fee is listed in our fee schedule . This fee is not payable if you transfer your loan to another property. If you sell your current property before you have found your new one, you will be charged the DEF, but it will be refunded if you get your new home loan with us within 6 months.
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Other stuff
What is lenders mortgage insurance?
Lenders mortgage insurance (LMI) protects your lender in case you are unable to keep up your repayments. It is typically required for loans where the loan amount is more than 80% of value of the property that you have used as security to borrow against (most likely your home or investment property). The cost of Lenders mortgage insurance is paid by you at the time of settling your loan in the form of a single upfront fee. However, in many cases you can add the Lenders mortgage insurance fee to your loan amount so there are no additional out of pocket expenses.
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How does homestar™ determine the value of my property?
We may use an external valuer or rely on the price stated in the "Contract of Sale" depending on the situation, price of the property, location and how recently the property was purchased. If required, an external valuer will inspect the property, consider all the factors that affect the value and produce a professional property report and valuation for homestar™.
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How much stamp duty will I need to pay?
Depending on your circumstances and where your property is located, you may have to pay government fees in the form of stamp duty. Stamp duty payments are based on the value of the property you purchase. Check your state government’s revenue office website to work out how much you may have to pay in stamp duty. Office of State Revenue in your State or Territory
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Do I have to pay mortgage stamp duty if I refinance?
If you choose to simply refinance a loan and the new loan amount is not exceeding the original amount of the loan being refinanced, where there are no changes to the name on the title deed or on the loan contract, you won’t be charged mortgage stamp duty – except in Qld and SA. However, under certain circumstances mortgage stamp duty may be payable in other States and Territories as well. Please contact the Office of State Revenue in your State or Territory for further details.
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Do I need a lawyer?
It’s a good idea, once you've found a property, to get a lawyer or conveyancer to look over the proposed “Contract of Sale” before you sign it. You will also need a lawyer or conveyancer to assist you with the settlement process and the exchange of title documents if you are purchasing a property.
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Glossary
LVR
Loan to Valuation Ratio. Expressed as a percentage of the value of your house. Calculated by dividing your loan amount/s by the value of the security property/ies eg a $80,000 loan against a $100,000 house is at 80% LVR.
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LMI
Lenders Mortgage Insurance (LMI) protects your lender in the event of you defaulting on your home loan. In the event of a loan foreclosure, if the property is subsequently sold and the amount from the sale is not enough to repay the loan in full, this insurance will meet the shortfall for the lender. The premium for this insurance is payable once only (per loan) and can usually be added to the loan amount.
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