Question 1

Can a family guarantor help me buy a home with a smaller deposit?

Accepted Answer

A family guarantee may allow an eligible borrower to use part of a relative's property equity as additional security, which can reduce the cash deposit or LMI required. The guarantor is taking a real financial risk and may be responsible for the guaranteed amount if the borrower defaults. Both parties should obtain independent legal and financial advice.

Question 2

What is the difference between principal and interest and interest-only repayments?

Accepted Answer

Principal and interest repayments reduce the amount borrowed while also paying interest. Interest-only repayments cover interest for an agreed period, so the principal generally does not reduce during that time and repayments may rise later. Interest-only can suit some strategies but usually increases total interest and requires a clear exit plan.

Question 3

Can I access home equity when refinancing?

Accepted Answer

You may be able to increase the new loan and access part of your usable equity for an acceptable purpose, subject to valuation, serviceability and lender policy. Usable equity is usually less than the simple difference between property value and loan balance. Borrowing more increases debt and repayments, so the purpose and cash-flow impact should be clear.

Question 4

Can a self-employed borrower qualify for a commercial loan?

Accepted Answer

Yes, subject to lender assessment. A lender may review trading history, profitability, cash flow, tax records, liabilities, security and industry experience. If standard documents are not available, some lenders may consider alternative verification, but different pricing, deposit or evidence requirements may apply.

Question 5

How is interest charged while a home is being built?

Accepted Answer

During construction, interest is commonly calculated on the amount already drawn rather than the full approved limit. The loan may require interest-only payments during the build before converting to principal and interest. Exact repayment arrangements vary by lender and loan structure.

Question 6

What do lenders assess for business vehicle or equipment finance?

Accepted Answer

Lenders may assess the business trading history, income or bank transactions, existing commitments, credit history, asset details and intended use. Newer businesses or unusual assets may require more evidence or a larger contribution. Approval, pricing and terms depend on the full application.

Question 7

Do low doc loans have different rates or deposit requirements?

Accepted Answer

They can. Because the lender may have less standard income evidence, some low doc products have different pricing, fees, maximum loan-to-value ratios or deposit requirements. Compare the total cost and whether a full-document option may become available with more preparation.

Question 8

What documents may a medical professional need for a loan?

Accepted Answer

Documents may include identification, professional registration, employment contract, payslips, tax records, bank statements and details of existing liabilities. Practice owners may also need business financials, BAS, lease documents and information about the proposed purchase or equipment.

Question 9

Why can a lender's property valuation differ from the purchase price?

Accepted Answer

A lender valuation estimates the property's value for lending security and may use different evidence or assumptions from the negotiated purchase price. If the valuation is lower, the effective LVR rises and the borrower may need a larger contribution, a smaller loan or another solution. A valuation is not a building inspection or a guarantee of market value.

Question 10

What should I bring to my first meeting with BV Finance?

Accepted Answer

Bring or prepare a summary of your goals, income, savings, current debts, credit card limits, living expenses and the property or asset you are considering. Recent payslips, bank statements and identification can help with an early review. BV Finance can then confirm the exact documents needed for the next step.

Home Loan & Finance FAQs

How much deposit do I need to buy my first home in Australia?

Can I buy my first home with a 5% deposit?

Do first home buyers pay stamp duty in Victoria?

Should I get pre-approval before looking for a property?

What does a mortgage broker do for first home buyers?

Can BV Finance help first home buyers outside Melbourne?

What is the First Home Owner Grant in Victoria?

What home-buying costs should I budget for besides the deposit?

What is lenders mortgage insurance and when might I pay it?

Do HECS or HELP debt, credit cards and buy now pay later affect borrowing power?

Can a family guarantor help me buy a home with a smaller deposit?

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