| HOW ARE MORTGAGE ORIGINATORS AND MORTGAGE MANAGERS 'Supervised'?
Mortgage Originators and Managers operate under each state and territory's Consumer Credit Legislation. In addition members of the Mortgage Industry Association of Australia operate under a strict Code of Ethics covering confidentiality requirements and dispute resolution procedures if a problem with your loan arises.
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| HOW DO SETTLERS HOME LOANS GET PAID?
Settlers Home Loans is paid from three main sources:
1. Application fees which helps offset establishment costs of the loan.
2. Management fees paid by the lending institution.
3. Brokerage fees on those loans where no introductory fee is paid by the lender.
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| SHOULD I OBTAIN FINANCIAL ADVICE?
You should satisfy yourself that you will be able to meet your repayment obligations, including increased installments if the variable interest rate should increase. If you are uncertain about this for any reason you should seek expert advice.
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| SHOULD I OBTAIN LEGAL ADVICE?
The mortgage contains financial obligations and we recommend that borrowers and guarantors (if applicable) seek legal advice regarding the terms and conditions of their mortgage or guarantee. The majority of Credit providers recommend obtaining a 'Statement of Independent Legal Advice' prior to settlement.
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| WHAT IS A MORTGAGE MANAGER?
The Mortgage Manager is responsible for administering the mortgage from the time it is provided by the funding institution until the borrower pays the final installment of the loan. The manager monitors loan repayments, insurance renewals, interest rate adjustments and loan variations.
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| WHAT IS A MORTGAGE ORIGINATOR?
A Mortgage Originator organises and negotiates funding for home owners and property investors (residential, commercial, industrial and retail) from a variety of funding sources. Settlers Home Loans Pty Ltd is such a mortgage originator.
Mortgage Originators act to introduce a borrower to the lender that in the originator's opinion offers the best product for the specific needs of the borrower.
Mortgage Originators (and Mortgage Managers) have brought strong competition to the home loan market and are subject to competitive pressures ensuring they offer attractive interest rates and personalised service.
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| WHAT IS MORTGAGE INSURANCE?
Mortgage insurance protects the lender and not you as the borrower. If you default on your mortgage, resulting in the need to sell the security property, and the sale proceeds are insufficient to fully repay the loan, the Lender may incur a loss.
The Lender may recover its loss under the Mortgage Insurance policy.
However, if the lender claims under its Mortgage Insurance, you are still legally responsible for paying the amount of any shortfall to the insurer because you are not protected by the Mortgage Insurance.
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| WHAT IS THE ROLE OF THE TRUSTEE?
The source of the mortgage funds is not the Mortgage Originator nor the Mortgage Manager, but a provider of funds on who's behalf the Trustee acts. The Mortgage Manager's role is to ensure that your mortgage is properly and professionally managed on a day-to-day basis with the Trustee overseeing this role.
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| WHAT OTHER COSTS MAY HAVE TO BE PAID BY ME IN ADDITION TO THE APPLICATION FEE?
As a borrower you are responsible for paying your own out of pocket expenses for the transaction. These include mortgage registration fees (e.g. $51-00 in NSW), mortgage stamp duty, searches and inquiry fees (if any). mortgage insurance (if applicable) and professional fees to your legal representative. In the case of refinancing, some lenders charge a fee for discharging mortgages.
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| WHAT SECURITY CAN I USE FOR A LOAN?
The mortgage must be secured over property whether owner occupied or investment. Certain purpose built commercial property is not acceptable. Details of these may be obtained from the Settlers consultant.
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| WHAT SHOULD I DO IF A LOAN REPAYMENT CANNOT BE MADE ON TIME?
If you find yourself in financial difficulty, your Mortgage Manager will certainly help. Phone the Mortgage Manager straight away to talk it over.
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| WHAT WILL BE MY INTEREST RATE IN THE FUTURE?
It is your choice whether your initial interest rate is variable, fixed or a combination of both. If your rate is variable, it can rise or fall depending on prevailing interest rates in the financial market. If your variable rate increases, your monthly installments will increase. It should be noted that the variable interest rates are not 'honeymoon' rates as are often quoted by major banks, they are standard variable interest rates.
If your rate is fixed, it remains unchanged during the chosen fixed period, until you elect to change to a variable rate or refix for a further term.
The main factors, which determine interest rates, are balance of trade figures/foreign debt, unemployment, demand on the Australian dollar, housing industry.
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| WHEN IS MORTGAGE INSURANCE CHARGED?
All loans are covered by mortgage insurance but in some cases the one-off cost is paid by the lender, usually when the loan value ratio is 80% or less. At higher loan value ratios, the borrower is required to pay this insurance which is payable at loan settlement. Indicative costs for this insurance are given on the product sheets.
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| WILL I RECEIVE AN APPLICATION FEE REFUND IF THE LOAN DOES NOT PROCEED?
Application fees cover costs associated with establishing the loan. Settlers refund policy is as follows:
Loan declined prior to valuation.
Full refund of valuation fee
Loan unconditionally approved and accepted by the borrower but terminated by the borrower prior to settlement
No refund but the application fee, less any valuation and /or legal costs, will be credited to any further application made within 6 months of termination.
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