Frequently Asked Questions - Application Form
1. Is this the form I use for Formal Pre Approval, Purchase and Refinance?
This is the form to use for all of these. When you go through the application, just leave the questions blank that don’t apply to what you are looking to do.
2. If I fill in my information on the application form on the computer, does this information go directly to SCMC?
No. The application form is a writeable PDF, which means it is just a fancy form that allows you to fill it in on the computer rather than just by hand in pen. It is just used to capture the information we need. If you are more comfortable filling it in in pen, by all means do so. Once it is filled in, it needs to be printed out and signed. Without these signatures we do not have your authority to start the application process.
3. I have completed an online indicative pre approval for the purchase of a property. Can you explain the difference between this and formal pre approval, where I fill in the application and supply my payslips etc?
The online pre approval is an indicative approval. It allows you to determine if what you are looking to do is feasible given your income and commitments. Formal pre approvals require you to fill in the application form and supply documents like payslips and savings statements. Formal pre approvals are very thorough and take about a week. Credit and employment checks are completed and the application fully assessed by our assessors and may even be submitted to our funders for their preliminary approval. What this all means for you is that once you have formal pre approval, you can be confident that once you purchase a property, that your finance will be approved. You really only need one thorough pre approval from one lender, prior to making an offer. Getting too many pre approvals only adds to the enquiries on your credit report, which can go against you in the long term.
4. Do I have to have my loan pre approved before I can make an offer on a property?
No but it can be useful to do so. It is a good idea in particular circumstances to have completed one to make sure that your application will be approved when you need the loan. For example, we would highly recommend gaining formal pre approval in the following circumstances:-
- first home buyers,
- people who haven’t purchased a property for a long time and have forgotten the process,
- borrowers who have time and can get some of the paperwork out of the way before purchase deadlines cause stress,
- if you have been with your current employer for less than 6 months or are a contractor,
- if you have a limited deposit and are looking to borrow the maximum
- If you are approaching retirement age
In the end, formal pre approval is free so it can help ensure that finance doesn’t add to your stress when you are purchasing a property.
Application Form
Page 1
Wy do you ask for the name of my nearest relative?
This is just an additional, alternative contact person, just in case we are unable to get in touch with you. They are not going to be called to give a personal reference. If you don’t have anyone in Australia meeting this description, it can be a close friend.
Page 2
Loan Details
This section is just narrowing down the loan setup details. Portion A, B, C, D is referring to the splits or sub accounts that you can divide your loan up into. Each of these can be setup differently. In reality, most people would just be using one sub account. In this case just fill in the top line under Portion A. Don’t forget to fill in things like loan amount, interest rate for the loan product you are applying for, P&I (principle and interest) or Interest only and the number of years. Dynamic repayments is a specific feature which, if selected, means that as soon as you pay extra funds into the loan, the principle and interest repayment amount automatically recalculates on the balance. Most of the time you don't want to do this - you want to pay extra and actually reduce the term of your loan. There are specific circumstances when people specifically want this. Please call if you want more information on this.
Loan Product
Loan term is generally 30 years but a lesser term can be chosen. LMI/ Fee Capitalisation is referring to mortgage insurance. It is applicable if you are borrowing more than 80% of the purchase price or valuation. If you are borrowing less than 80% just leave blank. Debit card request – there is an optional debit card that you can get with the loan. It is just another way to access your redraw via EFTPOS and ATM’s. It does involve fees so you will need to read the fees and charges pdf and/or call us to discuss so that you can make a decision as to whether it is in your best interest to get it or not. Redraw is automated and free via the internet. The majority of our borrowers would utilize this redraw method rather than the debit card due to the fees and limitations of it.
Funds Position
This is for purchases and refinances so you need to fill in the relevant items. For purchases, it is basically just showing that you have enough funds to complete the purchase. Part of the funds for the purchase will come from the loan but the rest needs to cover your contribution to the purchase, stamp duty, your legal costs etc. For refinances, just put your current loan balance at “refinance” and then if you are getting additional cash out or debt consolidating this will go at “others” or “home improvements” depending on what you are wanting the funds for. In the end the total of the Transactions Required must equal the Funding Sources.
Security Property 1 and 2
This is where you put the details of the property that will be used for security for the loan. The weekly rental is only needed if it the property is/is to be rented out. Name on title is who will be on the title once it is purchased eg you. For Contact Name and Number, put the details of the best person for the valuer to contact to gain access to the property. For purchases this is usually the real estate agent. For refinances it may be you for an owner occupied home or the property manager or tenant in an investment property.
Page 3
Assets and Liabilities
This is where you list all your assets and commitments exactly as they are today. If the property you are purchasing hasn’t settled yet then you won’t list it as an asset. You will list a deposit paid and the balance of funds in savings that you are contributing to the purchase. For refinances you will list your current property and tick it as a security and list the most recent details for your existing mortgage. For assets don’t forget to include things like your car, value of your home contents and superannuation balance. For all Liabilities, make sure you list who the lender is, in the box provided. For credit cards, store cards and interest free, make sure you fill in all the columns particularly the limit as this is a critical piece of information we need. This is still required if you don’t use the card or if you pay it in full each month.
The rate you’ll have to pay for mortgage insurance depends on the loan size. It can be as high as 3% of the loan amount but a more typical rate is between 1.2% and 1.5%. at 1.2% your mortgage insurance would cost $3000 on a $250,000 loan.
Page 4
Application Declaration
Point i talks about a $360 legal fee. This is a non proceed fee which is only charged if you go decide not to proceed once your loan application has been fully approved and loan contracts are mailed to you. Our solicitors charge for the work that they have done and so we are recouping this cost. This fee is rarely charged.
Page 5
Joint Borrowers Declaration
Applies to loans where there are two borrowers. If the borrowers are partners then by signing this nomination, all correspondence can be addressed to one borrower only. This stops you receiving identical documents addressed to each of you individually.
Page 6
Loan Purpose Declaration Form
Part A – If you are individuals applying for a loan in your own names then just tick “yes”, “no”, “no”. If the borrower is a company or trust you would complete it opposite to this.
Part B – Just put the loan amount beside the number that applies. If you are increasing your current loan, then divide the loan amount between refinance and the purpose of the additional cash out. It is what the funds have been used for that is critical here.
Page 7
Loan Purpose Declaration Form
Part C – if the majority of funds in Part B are in the first column, then it is a Code Loan. In this case tick “yes” and both sign. If the majority of the funds were in the second column under Non Code, tick “no” and sign.
Declaration of purpose
Only sign this if the majority of the loan was Non Code in Part B. In the majority of cases, where the funds have been used for personal purposes or investment in a residential investment property, then it should just be left blank.
Page 12
Loan Checklist
Go through the list of what we require carefully. We will require all the relevant documents. If you are sending in the application with some missing, please let us know in a cover note or email so we don’t ask for them.
Page 13 & 14
Certified Copy Certificate
You will need to get copies of your ID certified by one of the category of certifiers on page 15. Take your original ID and copies of your ID to the certifier and get them to certify the copy as well as fill in the details and sign this page. You will need to sign your section in their presence. This certificate gives us all the details of the certifier so that we are able to verify who they are.
Signing. Double check that you have signed on page 3,5,7,9 and 11.
I have completed the application and collected the documents. What do I do now?
You have three choices. Either scan and email, fax or post it to us. If you scan and email or fax, it enables us to get started on your application faster. We will need the original application and certified ID for our file, so later on, you will be asked to post these to us.
