How long does a home loan process take?

This depends on lender to lender. Some lenders are incredibly fast and some are much slower. If you have a time sensitive settlement, we take this into consideration when choosing a lender and prioritising application. The single biggest factor that you can control in this process is providing all your documentation in a timely manner, and providing it as accurately as you can. Lenders love a quality application and that doesn't always mean the highest quality applicant, it means how well we put together your loan application and present it to the bank. As local mortgage brokers, located in Noosaville, Palm Beach, Marcus Beach, Yeppoon and Springwood, we know our surrounds like the back of our hands, but we need to get to know you. Telling us everything we need to know gets your application through faster and without surprises.

Do you get paid more by some banks than others?

Generally, no. Commission rates across most lenders are broadly similar. Where small differences exist, they are irrelevant to our recommendation. We are legally obligated to act in your best interests, regardless of what any lender pays us. At The Broker Society we take a broad approach to commissions. We do not pay commissions to people who refer you to us, and we do not accept payment for referrals we make to other businesses like accountants or financial planners. It is just how we choose to do business. We love connecting our clients with other great people we trust. Business owners we know personally who will take care of you. We do it because we genuinely want you to be looked after. Not for cash.

What do you do with our information?

Your information is handled with complete care and in accordance with our Privacy Policy, which you can read in full on our website. We only collect what is necessary to assess your situation and submit your application, and your data is never shared beyond what is required to progress your loan.

Why do you offer some lenders that we have never heard of?

This is one of the real advantages of working with a broker. The Australian lending market goes well beyond the Big 4 banks, and access to the full market is something you simply cannot get by walking into a branch. There are four main categories of lenders we work across: Big 4 (or the Big 5 now) — NAB, CBA, ANZ, Westpac, Macquarie. Second Tier — well known but smaller lenders such as ING, Suncorp and Bankwest. Non Conforming — lenders who specialise in unique situations such as low doc or alt doc loans, including Bluestone, Pepper Money and Resimac. White Label — lenders who source funds from major institutions and offer them under their own brand, often at more competitive rates because they have no branch network overhead.

How much deposit do I need to buy a home?

The standard deposit requirement is 20% of the purchase price, which avoids the need for Lenders Mortgage Insurance. However, there are pathways to purchase with as little as 5% deposit — including the Federal Government's Home Guarantee Scheme, which allows eligible buyers to purchase with a 5% deposit without paying LMI. We can assess which options you qualify for during your initial consultation. There are also other options for no LMI or lower deposits such as non conforming lenders which charge a Risk Fee, or LMI waivers for specialist industries like Dentists, Lawyers and Doctors.

What is the difference between pre-approval and full approval?

Pre-approval is a conditional assessment from a lender indicating how much they are willing to lend you, based on your financial position at a point in time. It gives you confidence to make offers on properties within your budget but is not yet formally approved. Full approval is issued once a specific property has been valued and all conditions have been satisfied — this is when the lender formally commits to funding your loan.

Can I get a home loan if I am self-employed?

Yes. Self-employed borrowers have strong options across our lender panel. Requirements differ from standard PAYG applications. Most lenders want to see two years of tax returns and financial statements, though we have access to many lenders that offer alternative documentation options for those whose financials don't reflect their true income position. We work with self-employed clients regularly and know which lenders assess this type of income most favourably. Truth be told, self-employed clients are where our speciality lays.

What is refinancing and when should I consider it?

Refinancing means replacing your existing home loan with a new one. Either with your current lender or a different one. People refinance for a range of reasons: to access a more competitive interest rate, release equity for renovations or investment, consolidate debt, or restructure a loan that no longer fits their circumstances. A good time to review your loan is every two to three years, or any time your situation changes significantly.

How many lenders do you have access to?

We work with a panel of over 40 lenders including major banks, second tier lenders, non-conforming specialists and white label products. This breadth of access means we can find solutions for a wide range of financial situations, not just straightforward applications.

What happens after my loan settles?

Our relationship does not end at settlement. We stay in touch with all of our clients to ensure your loan continues to work for you as your circumstances evolve. We conduct regular loan reviews, let you know when the market shifts in a way that may benefit you, and are always available when your situation changes and you need guidance.

What areas do you service?

We are an independent mortgage brokerage based in Noosaville with brokers across Queensland — meaning we have a genuine local presence in every market we serve. Kate Sadler is based in Noosaville and services clients across the Noosa region including Noosa, Noosaville, Tewantin, Noosa Heads, Sunshine Beach, Cooroibah, Weyba Downs, Noosa North Shore and the wider Noosa Shire. Kate and Jeane also cover the Noosa Hinterland including Cooroy, Cooroy Mountain, Doonan, Eumundi, Lake Macdonald, Pomona, Tinbeerwah and Verrierdale. Jeane Hofmeyr is based in Marcus Beach and services clients across Marcus Beach, Peregian Beach, Peregian Springs, Coolum Beach, Castaways Beach, Sunrise Beach and surrounding suburbs. Belinda Gough is based in Palm Beach and services clients across the Gold Coast including Palm Beach, Burleigh Heads, Nerang, Southport, Currumbin, Elanora, Miami, Mermaid Beach, Broadbeach, Robina and surrounds. Tyler Auld is based in Loganholme and services Brisbane Southside including Springwood, Daisy Hill, Underwood, Rochedale, Calamvale and surrounding suburbs. Talia Ryan services Yeppoon, Rockhampton and the wider Central Queensland region. The Broker Society also helps clients right across Queensland and Australia, working remotely with clients in every state and territory.

HECS-HELP Debt and Home Loans: Can You Get a Mortgage With HECS?

10 Aug

Written By Kate Sadler

Having a HECS-HELP debt does not automatically mean you cannot get a home loan.

In fact, plenty of Australians with HECS-HELP or HELP debt go on to buy their first home.

But there is an important question to understand before you start house hunting:

How does your HECS-HELP debt affect your borrowing capacity?

The answer isn't always as simple as adding your HECS balance to your other debts.

Your income, repayment obligations, living expenses, existing debts and the lender's assessment criteria can all play a part.

If you're a first home buyer with HECS-HELP debt, here's what you need to know.

What is HECS-HELP debt?

HECS-HELP is a government loan that helps eligible students pay their higher education fees.

Rather than paying the full cost of their course upfront, eligible students can defer their student contribution and repay the debt through the Australian tax system once their income reaches the relevant repayment threshold.

The important thing to remember when applying for a home loan is that HECS-HELP is still a financial commitment.

That means a lender will generally need to take your HELP repayment obligations into account when assessing your application.

Can I get a home loan with HECS debt?

Yes.

Having HECS-HELP debt does not automatically prevent you from getting a mortgage.

However, it can affect how much a lender is prepared to lend.

This is because lenders generally assess your income alongside your existing financial commitments and expenses.

Your HECS repayment may therefore form part of the overall affordability assessment.

The good news is that having a HECS debt is very different from having a history of missed repayments or problematic consumer debt.

If you're otherwise in a strong financial position, HECS-HELP debt may simply be one part of your overall application.

Does HECS reduce your borrowing capacity?

It can.

The exact impact depends on your circumstances and the lender assessing your application.

For example, two people could have the same HECS balance but very different borrowing capacities because they have different:

incomes
living expenses
credit card limits
car loans
personal loans
dependants
existing mortgages
savings
deposit sizes
repayment commitments

This is why there isn't a single answer to:

"How much can I borrow if I have HECS?"

It needs to be assessed alongside everything else.

Some lenders may work better with HECS-HELP debt

One thing that can make a difference when you have HECS-HELP debt is which lender you apply with.

Not every lender assesses HECS-HELP repayments in exactly the same way. Their lending policies, servicing calculations and treatment of student debt can differ, which means the same borrower may have a different borrowing capacity depending on the lender.

At The Broker Society, we have access to lender options that can be more favourable for certain borrowers with HECS-HELP debt.

That does not mean there is one particular lender that is always best. The right option depends on your income, existing debts, expenses, deposit, property price and overall circumstances.

For example, if you're a first home buyer with a strong income but a HECS balance, choosing a lender with a more favourable approach to your HELP repayment may potentially make a meaningful difference to your borrowing capacity.

That's one of the advantages of working with a mortgage broker.

Rather than applying to one bank and hoping their assessment works for you, we can compare your circumstances across available lenders and identify which options may be more suitable.

If HECS is one of the things you're concerned about, talk to The Broker Society about your home loan options before assuming your borrowing capacity is lower than it needs to be.

How do lenders assess HECS-HELP debt?

This is where things can become a little more complicated.

Your HECS-HELP balance is not treated exactly like a conventional personal loan.

Instead, your compulsory repayment obligations can affect the amount of income a lender considers available to service a mortgage.

The way this is assessed can also vary between lenders and can change as government repayment thresholds and lending policies change.

That's one reason it can be useful to compare lenders rather than assuming every bank will assess your HECS debt in exactly the same way.

Our mortgage brokers can help compare home loan options based on your individual circumstances.

Does HECS affect first home buyers differently?

The debt itself does not disappear simply because you're buying your first home.

But first home buyers can have other factors working in their favour depending on their circumstances.

For example, you may be eligible for government assistance or schemes designed to help eligible first home buyers enter the property market.

Your deposit, income, property price and eligibility requirements all need to be considered.

If you're buying your first home, our First Home Buyers guide is a useful place to start before you begin making offers.

Should I pay off my HECS before applying for a mortgage?

Not necessarily.

This is one of those questions where the obvious answer isn't always the right answer.

You might think:

"If I pay off my HECS, I'll have less debt, so my mortgage application must be stronger."

But using a large portion of your savings to clear HECS could also reduce the deposit you have available for your property.

You may also need money for:

stamp duty
conveyancing
inspections
moving costs
renovations
emergency savings
other upfront buying costs

So the decision isn't simply HECS versus no HECS.

It's about understanding what position leaves you strongest overall.

Before making a large repayment, it can be worth looking at the numbers and understanding how it could affect your borrowing position and available deposit.

Can I buy my first home with HECS and a small deposit?

Potentially.

Your HECS debt does not automatically prevent you from buying with a smaller deposit.

However, your borrowing capacity, income, expenses, deposit and eligibility for any applicable government scheme will all need to be considered.

If you're trying to work out whether your current savings are enough, don't forget that buying a home involves more than the deposit.

You may also need to account for:

conveyancing
inspections
lender costs
government charges
moving expenses
insurance
potential LMI

Our First Home Buyers page explains some of the things worth considering before you start shopping for a property.

What if I have HECS, a car loan and a credit card?

This is where your overall financial position becomes particularly important.

Imagine you're a first home buyer with:

HECS-HELP debt
a car loan
a credit card
regular living expenses
a deposit you're still building

None of these necessarily means you cannot get a mortgage.

But together they can affect your borrowing capacity.

A lender is looking at whether your income can comfortably support the proposed home loan alongside your existing commitments.

This is why borrowing capacity should ideally be worked out before you start seriously looking at properties.

Knowing your approximate position can help prevent you from falling in love with a property that sits outside your realistic budget.

Does HECS affect your home loan interest rate?

Having HECS-HELP debt does not automatically mean you will receive a higher mortgage interest rate.

Your rate and loan options depend on a range of factors, including the lender, loan type, deposit or equity, loan-to-value ratio, borrower circumstances and the lender's current criteria.

The bigger issue with HECS is generally how the repayment obligation affects your overall servicing position.

What if my HECS balance has gone up?

This can be confusing.

HECS-HELP and other HELP debts are indexed, meaning the outstanding balance can increase over time.

That doesn't necessarily mean you are doing anything wrong or that your home loan application will be declined.

But it does mean it's important to understand your current debt position when you're planning a property purchase.

Your latest tax information and HELP debt details can help provide a clearer picture when your borrowing position is assessed.

Does HECS affect refinancing?

It can.

If you already own a property and are considering refinancing, your HECS-HELP debt may be one of the financial commitments considered as part of the lender's assessment.

However, refinancing isn't only about your HECS balance.

The lender may also consider:

your current home loan
property value
income
living expenses
other debts
loan-to-value ratio
credit history
the reason for refinancing

If you're a homeowner in Noosaville, for example, and you're considering whether your current home loan still works for you, our Noosaville refinancing service can help you explore your options.

Can a mortgage broker help if I have HECS?

Yes.

This is one area where comparing lenders can be useful.

Different lenders can have different policies and assessment methods, so it can be a mistake to assume that because one lender says you can borrow a certain amount, every lender will assess you in exactly the same way.

At The Broker Society, we can look at your broader financial position and compare available lending options rather than simply focusing on your HECS balance.

The goal isn't to find a way around your HECS debt.

It's to understand how it fits into the bigger picture.

HECS and home loans: the key takeaway

Having HECS-HELP debt does not automatically rule you out of getting a mortgage.

But it can affect your borrowing capacity because your repayment obligations form part of your overall financial assessment.

The best approach is to look at everything together:

Income + HECS + other debts + living expenses + deposit + property price = your overall borrowing position.

If you're a first home buyer, don't assume you need to completely clear your HECS before speaking to a lender.

And don't assume your HECS means you cannot afford to buy.

Find out where you actually stand first.

If you'd like to understand your borrowing position and explore your home loan options, make an appointment with The Broker Society.

A final thought

Your HECS debt is only one part of your financial story.

It shouldn't automatically determine whether you can buy a home.

The important thing is understanding the whole picture before you make your next move.

This article provides general information only and does not take into account your objectives, financial situation or needs. Lending criteria, government thresholds, HECS-HELP rules and lender assessment policies can change. You should consider your circumstances and seek appropriate professional advice before making financial decisions.