FAQ
- Why use Citiwide instead of a bank?
- What is your best Interest Rate / best loan?
- How is Citiwide remunerated for its work?
- Where do I make the repayments for my loan?
- On what basis does Citiwide recommend a loan?
- How much can I borrow?
- How much do I need to save for a deposit?
- Am I eligible for the First Home Owners Grant (FHOG)?
- What is Lender’s Mortgage Insurance (LMI)?
- What does LMI insure?
- Who uses LMI?
- Can the Lender’s Mortgage Insurance premium be added to my loan?
Why use Citiwide instead of a bank?
The simple answer is that we offer you a wider choice and we don’t sell our own home loans. Our Consultants are the most experienced in the field and have access to hundreds of loans from a panel of over 24 of Australia’s leading banks and lenders. A bank can only offer you a limited range of its own home loans. Other benefits are:
- We will keep in touch with you at least once a year to offer you a FREE review of your loan. Banks don't generally tell their clients if there is a better option somewhere else.
- Our 1 StopShop service for your Loan, Conveyancing, Insurance and Debt Protection
- We are accessible 7 days a week
- We are passionate about helping people own their own home.
What is your best Interest Rate / best loan?
We sincerely believe that there is no such thing as the best loan or best rate, however there is a loan that is best for you. It is important that we first understand your requirements before we recommend any particular loan. We can assure you though, that once we fully know your circumstances, we will find the loan that is best suited to you.
How is Citiwide remunerated for its work?
Citiwide is paid by its panel of lenders for each loan that proceeds to settlement, therefore the service to you is completely FREE. Furthermore, we provide you with a FULL DISCLOSURE of all the commissions we receive from our lenders prior to you engaging our services so you know exactly what our remuneration is.
Where do I make the repayments for my loan?
All repayments are made by you directly to the lender. Although our engagement is completed at the settlement of your loan, we offer you ongoing assistance with any advice you may require about your loan. For example, if you need to vary your loan i.e. increase your loan, fix your interest rate or simply change your repayment frequency, we can assist you free of charge.
On what basis does Citiwide recommend a loan?
When it comes to recommending a loan, we don’t make guesses. Instead, we ask you what you want to achieve, what features you would like with your loan and we use our advanced Loan Comparison Software to come up with a few options. We will then discuss each option with you and make a final recommendation based on your preference.
The amount you can borrow will vary widely from lender to lender. Each lender has their own lending policies and criteria meaning they each calculate the amount of money they will lend you differently. The advantage of speaking to one of our consultants is that they can tell you the maximum you can borrow from each lender. To get you started you can use our Loan Calculator for a rough estimate of how much you can borrow.
How much do I need to save for a deposit?
As a general rule, if you are an owner-occupier you will require 5% of the purchase price as a deposit. However, here are now loans available that allow you to borrow 100% of the purchase price, so all you need to cover are the Stamp Duties and borrowing costs. Your consultant will help you decide on the best option for your circumstances.
Am I eligible for the First Home Owners Grant (FHOG)?
The first home owners grant (FHOG) is a one-off Federal Government grant of $7,000 designed to help those who are eligible, to buy or build their first home. Please note that some States also offer some form of grant or subsidy to first home buyers. Find out if you are eligible for the First Home Owner’s Grant or talk to your Citiwide consultant for more information.
What is Lender’s Mortgage Insurance (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.
With most lenders, LMI generally applies when the loan amount exceeds 80% of the value of the property. It is paid by you as a single premium at the start of the loan.
LMI should not be confused with Mortgage Protection Insurance, which covers you for the payment of your mortgage instalments in the event of unforseen circumstances including unemployment, illness or death. This insurance is paid annually and can vary depending on the outstanding balance of the loan.
LMI insures mortgage loans for residential property in Australia. This encompasses houses, townhouses, home units, villas, vacant land and semi-detached homes. LMI is not available for commercial properties.
Lenders Mortgage Insurance is taken out by Banks, Building Societies, Credit Unions and non-banks lenders. These institutions use the money from deposits held in savings accounts and term deposits, or borrow, to provide mortgages to customers. In agreeing to lend a customer money, banks take a risk that they won’t get the money back. Although they have the house as security, if property values decline that security may not be enough to cover the outstanding loan.
Because they operate in a very competitive environment, these lenders opt to take out LMI on these loans rather than increasing interest rates, and let the LMI provider wear the risk.
Can the Lender’s Mortgage Insurance premium be added to my loan?
The LMI premium can be added to your loan as long as the overall lending ratio does not exceed that prescribed by the lender. For example, if your lender’s overall maximum loan to value ratio (LVR) is 95%, and you only had a 5% deposit, then you would have to cover the LMI cost separately.
It should be noted though, that some lenders allow you to add the LMI premium cost on top of your loan, which means that you can borrow up to nearly 97% (LVR) against your property.
