10 Home Loan Hacks I've Identified Over My Years in Lending/Brokering

1. Company Car Benefit

A fully maintained company car can add between $3,000-$7,500 in extra income to your borrowing position. I always remind my clients to disclose their company car if they have one. It could be the difference for you.

2. Fully Assessed Pre-Approval

I always recommend aiming for a fully assessed pre-approval. A standard pre-approval really doesn't mean much as all your documents haven't been verified by the lender. A fully assessed pre-approval is one where the lender checks off all your paperwork in advance of you putting down any offer. Essentially you end up being approved subject to a contract of sale and valuation being held. This is the best way to go as it's a lot more concrete and gives you peace of mind.

3. Offset Account Value

If you're paying monthly for offset accounts, I always check to make sure you're saving more in interest each month than the actual fee to hold an offset account. If you're only saving $6.52 every month but it's costing you $10 per month for the offset, you're actually going backwards.

4. Property Report Insights

I provide my clients with an RP data property report for the address they're keen on. One of the most common things these reports pinpoint is previous listings for the property. I see a lot of instances where a property is listed online as a "new listing" when actually it may have already been listed several months prior without selling and then has just been relisted again as a "new listing." Knowing this could give you leverage in negotiations if you know interest in the property has been low recently.

5. Credit Card Limits Matter

Banks will always look at the credit card limit NOT the balance when assessing your borrowing power. The bank always takes a "worst case scenario" approach and bases their calculations on the assumption that you could end up owing the full amount at some point in the future. So if you have a $25K credit card and you clear it off in full every month, it doesn't matter—the full limit is factored into the equation.

6. Business Expense Add-Backs

Business expenses such as depreciation, interest charges, and additional super contributions noted on your profit/loss can be added back into your business earnings to help boost borrowing power. Also, I know some lenders don't consider business debts in their calculations, which is a huge win as a lot of lenders will include the business debt repayments into calculations and have them come off your profit.

7. Property Address Up Front

I always tell my clients to share the address for the property they're negotiating. The lender may be able to confirm what type of valuation will be required beforehand (internet valuation, desktop, kerbside/drive by, or full in-person inspection). This ensures that the actual property type fits within that bank's policies, and also allows the lender to set accurate timeframes for unconditional approval based on the valuation required.

8. LMI as a Tool

Lenders Mortgage Insurance (LMI), whilst an annoying cost, is a useful tool if you need to use it. For example, if LMI is $10K, you only really need your house value to grow $10K and you've essentially made your money back. Too many times I see people holding off on purchasing to avoid the cost of LMI only to see house prices rise faster than they can save, missing out on that property growth.

9. Car Financing Through Home Equity

In a lot of cases, I've found buying a car using house equity can be very handy instead of getting a car loan. There's a general misconception that buying a car using the mortgage means you are carrying it over 30 years—this is not the case if structured right. Just make sure to borrow the money you need for the car as a separate home loan split. That way you'll have 2 loan accounts: one for the house and one for the car. Then just set the car loan portion of debt over a shorter loan term of 5-7 years to mirror what a normal car loan would look like.

10. Early Approvals for Off-the-Plan Purchases

For off-the-plan purchases or unregistered land, I can get you unconditionally approved, with the approval being valid for usually 3 months but sometimes as much as 6 months. Getting your unconditional approval out of the way early, a few months before the property/land is even registered, takes some of the pressure off and gives you peace of mind. Too many people leave their finance until a few weeks before the property is expected to register, when you don't necessarily have to do this. Just get it out of the way early on, put your feet up, and wait for notification of property registration.

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