Principled People FAQs

Q1. What is Loan Mortgage Insurance?
Whenever you have less than 20% deposit, you will almost always have to pay mortgage insurance or Lenders Mortgage Insurance (LMI). As the name suggests, this insurance is a one-off payment by the borrower to the lender (or lender’s insurer) to ‘insure’ the loan. It insures the lender for any short fall on a loan, so if you were ever in the position where the lender took legal action and forced you to sell your property it would generally cover the lender if there was a difference between what your property was sold for and any loan amount still owing after the sale. Pn 100% loans, dependent on the lender and the risk, mortgage insurance can cost up to 3% of the amount you are borrowing. Up to 95%, the amount would typically be up to 1.2% - 2.0% of the loan amount. As you get closer to 80%, the cost can discount substantially. Please contact us for more information.

Q2. What is a Professional Pack?
A Professional Package offers you interest rate discounts depending on the loan size. Fee free transaction accounts and credit cards free of charge and a range of other special offers are available. Professional packages are not just for professionals! Packages can start at a loan amount of $100,000. Please contact us for more information.

Q3. What is an Intro rate?
An introductory rate loan generally offers a guaranteed low rate for an initial period of time (usually 12 months) after which most will revert to the standard variable rate. The rate can be fixed or variable.

Q4. Do I need additional paperwork for a Construction Loan?
Yes. A Construction Loan requires a fixed price building contract from a registered builder and council approved plans. Also these loans are usually interest only for the period of building and then become principal and interest once the building is completed. A Construction Loan allows you to draw money as is required whilst building. Please contact us for more information.

Q5. What is 100% Interest Offset Loan?
You place all your salary and other income in an offset account that is directly linked to your home loan. Any balance in the offset account is 100% ‘offset’ against your home loan. This reduces the amount of interest you have to repay, making your money work harder for you. Please contact us for more information.