Before you apply
When you go through the application process for a loan, it’s likely your lender will ask a number of questions about aspects of your life such as your income, your expenses, your spending habits and more.
Before you hit the submit button on your application, it’s important you know that you can and should ask some questions of your lender too. This can help ensure you have a full picture of the relationship you are entering into with your lender bank. Here’s 10 questions you might like to ask.
1. How do I know this is the best home loan for me?
Your lender should be able to explain all of the options available to you and why the one they are signing you up for, best suits your needs.
2. Do you get commissions for selling me this loan?
Many banks provide staff with commissions for products they sell which means you can’t always be sure that what they are selling you is in your best interests. At Bank Australia, we do not pay any of our staff sales commissions, on any of our products.
3. What checks do you do to make sure I can afford the loan amount you’re offering me?
Lenders will look at your income, assets, expenses and spending habits to assess what you can afford. As a responsible lender, we’ll work with you to work out how much it makes sense for you to borrow. We take extra care when assessing your financial situation and incorporate a generous buffer into our calculations, to ensure you won’t be placed into financial hardship if interest rates go up.
4. What are the fees and charges involved in taking out a home loan with you?
Most home loans will have an establishment fee and some lenders will charge ongoing service fees. It’s important to know what these costs are when calculating how much you should borrow.
5. What are the terms and conditions I should be aware of?
All loans will have terms and conditions. This can include things like penalties that may apply in circumstances such as missing a repayment, and the lenders refinancing policy should you wish to move your home loan.
6. What information will you need from me?
You’ll be required to provide a range of documents to demonstrate your financial position. Gain a head start on gathering these by asking your lender exactly what you’ll need from day dot.
7. On average, how long will the application process take?
The time it takes to apply and be approved will vary between lenders and can depend on extra requirements like valuations or requests for additional documentation. At Bank Australia, we aim to have loans processed within a few weeks.
8. Do you have any assistance available if my financial circumstances change?
Sometimes life throws unexpected events at us that place a strain on finances, like an illness or a change to employment status. Ask your lender how they will support you should this happen to you.
Bank Australia will work with you to understand how we can assist now and into the future, looking at options such as lowering your repayments and extending the term of your loan or, providing you with a short break on repayments to give you some breathing room.
9.Would I be able to pause repayments for a specified period of time?
Your lender may have different options for pausing your home loan repayments. It’s good to be aware of what the possibilities are, even if you don’t think you’ll ever use the feature.
At Bank Australia we offer a family pause if you are welcoming a new family member to the world and an eco-pause that lets you redirect your mortgage repayments to make environmental home upgrades like installing solar panels or batter power.
10. What industries does this bank lend to and invest in?
Your home loan can make a big difference in the world. Every dollar you borrow and the interest you pay, goes somewhere and is used for something. Where it goes and what it could be supporting depends on who you are borrowing from. By asking this simple question, you’ll quickly be able to work out whether the lender aligns with your values.
If their answer to this question includes industries that cause harm to people or the planet such as fossil fuels, weapons, tobacco and gambling, chances are that your mortgage is supporting those investments.