Frequently Asked Questions

There’s no such thing as a silly question! Explore some of the queries we are asked on a consistent basis here at Whiteroom Finance. If your question is not answered here, please do not hesitate to reach out to our team for assistance.

General

Why Should I Use A Broker Instead Of Going To My Bank?

There are a range of reasons you should choose to use a broker over dealing directly with a bank, including:

For Convenience
- Your broker will often come to your premises to assist you
- They will become a primary contact and develop a face-to-face relationship with you
- Using a broker will usually streamline your application for an efficient outcome

Knowledge & Extensive Experience
- Good understanding of potential pitfalls in application process
- Understanding policy and procedure allows for calculated advisory services
- Your broker ‘speaks the banks language’
- Often your broker has as much or more experience as your banker, and has a much broader view of funding options

Peace Of Mind
- Over 70% of new home and investment loans and 35% of business loans are generated by brokers, giving you confidence you are within the majority
- A bank may encourage you to acquire all finance under one roof. A broker will take a non-biased approach and will provide advice that is suitable for your unique needs, which may include spreading finance across different lenders, using different products, or reducing borrowed amounts – it all depends on what is in your best interest

How Do You Determine The Best Lender For Me?

We work diligently to gain a deep understanding of our client’s wants and needs, considering how these can be best met by the lenders we work with. We will present you with the options that fit your unique situation best, discussing those you’d like to explore further. It is NEVER about what we get in return.

What Fees Do You Charge For Your Services?

Brokers are generally paid commission by the lender that they arrange a loan with. This can take numerous forms and commission to be received where possible is disclosed to the client through the process.

In some cases it may be necessary for a broker to charge you a fee due to the cost of obtaining such things as company searches, title searches, and credit reports. Fees may also apply if a broker is providing advice that may not lead to a new loan being arranged.

In the case of business or complex home lending scenarios, fees may be charged where commission is minimal or insufficient to cover costs.

In all cases, if a broker believes fees may be payable, they must receive your agreement prior to charging anything to you.

Business Finance

What Types of Business Loans Are Available?

There are two primary types of finance a business can use to secure funding:

Debt Finance: The business receives funding from a third-party and repays the principal borrowed plus interest and fees. There are a range of different types of debt finance, including:

Bank Loans
Business Credit Cards
Invoice Finance
Asset Finance
Trade Finance
Line of Credit
Merchant Cash Advance

Equity Finance: A third-party provides funding in exchange for part ownership or shares in the company. There are a few types of equity financing options, including:

Crowdfunding
Venture Capital
Angel Investors
Friends & Family

To read a full in-depth breakdown, explore our ‘Types of Business Finance’ blog.

What Are The Eligibility Criteria For Business Loans?

It is crucial to understand your business. Ensure tax returns are lodged on time and you can understand them, be able to explain how your business derives revenue, who your clients are, what cashflow looks like, and importantly, why borrowing will improve your position.

Generally speaking, lenders are more willing to approve business loans if you can show you’re managing your existing commitments well. For example, where possible it is important to keep on top of loan repayments, as well as Australian Taxation Office and Superannuation commitments. If you are struggling, it is important to get your commitments in order as soon as possible.

Are There Fees Associated With Business Loans?

There are a range of fees lenders may charge in addition to interest. It is crucial to ask your lender whether you will need to pay any hidden fees, and any reputable lender will disclose all costs up front. Some common charges you may encounter include:

Application Fee: The application fee is charged by lenders as a cost to establish the loan.
Legal Fees: To cover the cost of preparing loan documentation, reviewing trust deeds and related documents, and attending settlement
Origination Fee: Origination fees are similar to an application fee, imposed on the borrower for administrative expenses.
Service Fee: Service fees are generally to cover activities performed over the lifetime of a loan, including customer service, support and keeping payment records.
Early Repayment Fee: Early repayment fees penalise borrowers for early repayment as the loan will not go for the full term.
Late Payment Fee: Late payment fees are imposed to borrowers who fail to pay off their loan timely.
Discharge Fee: Discharge fees are composed of all fees you will be required to pay to finalise your loan.
Drawdown Fee: Though uncommon, if you take out a business line of credit, you may need to pay a drawdown fee.
Penalty Interest: Penalty interest is additional interest charged by the lender if you fail to make timely repayments.
Other Fees: Some other fees to be aware of include brokerage fees, line fees and referral fees.

By familiarising yourself with the range of additional loan fees business lenders may charge, you can easily avoid surprise expenses which may increase the total cost of your loan.

Vehicle & Equipment Finance

What Sort Of Assets Can I Finance?

You are able to finance almost anything which is uniquely identifiable, including but not limited to:

Cars, utes, trucks, trailers and any other road registered vehicles
Plant and equipment, including yellow goods, cranes, tanks and drill rigs
Forklifts, workbenches and other workshop equipment
Point-of-sale machines and payment processing software
Commercial ovens, grills and commercial kitchen equipment
Office furniture and chairs, including partitions and cubicles
Software
Appliances such as refrigerators, coffee machines and more
Solar panels and HVAC systems

Are There Different Types of Financing I Can Apply For?

At Whiteroom Finance, we understand your business is unique and we will work with you to find the most suitable funding structure for your requirements. We can assist you with equipment financing options, including:

Chattel mortgage
Novated lease
Finance lease
Hire purchase
Operating lease and rentals

What Are The Repayment Terms?

Depending on the loan product and terms you agree to, your loan can be structured with seasonal payments, balloon / residual payments and flexible repayment terms.

Home & Investment Loans

Will An Investment Loan Be Any Different To My Existing Loan?

Much like any home loan, the amount you are able to borrow for investment purposes depends on the equity you have available and how much you can afford. Unlike a home loan, the interest you incur on an investment loan may be able to be used to reduce your taxation obligations. Depending on the asset you choose to purchase, you may be able to utilise said asset to provide you with an income.

How Much Deposit Do I Need For A Home Loan?

Lenders are unlikely to lend you 100% of the price of your home, you will usually be required to provide a deposit. The usual house deposit size is at least 20% of the total property price. You need to keep in mind, the house price will exclude expenses such as legal fees, stamp duty, land tax and processing fees.

What Is An Interest-Only Home Loan?

Interest-only home loans involve making repayments to cover the interest accrued on your loan principal for a set period of time. This is different from other standard home loans where you make interest repayments, as well as making repayments to reduce the overall balance of your loan. To learn more about interest-only loans, contact your Whiteroom Finance broker.

Residential Refinancing

What Is Refinancing?

The refinancing process simply involves reviewing your current mortgage against your personal situation and comparing terms against current market offers. The result of this process can see you potentially swapping your loan to a different lender who can better address your current needs and circumstances.

How Do I Refinance My Home Loan?

The first step is to speak to a professional, such as a mortgage broker, about your needs and whether you will be able to afford a different loan structure – particularly if you have more than one property.

What Are The Costs Of Refinancing?

There are plenty of fees lenders and banks can add onto the home loan refinancing process; many of the individual charges, and how much they will cost depend on the lender. Some common fees associated with refinancing include:

Mortgage Application Fee: If you are changing lenders you may need to pay an application fee to establish your new home loan.
Property Valuation Fee: A new lender may ask you to get a valuation on your property before giving approval to refinance with them.
Discharge Fee For Mortgage Termination: Generally applicable to external refinancing, your existing lender may require you to pay a discharge fee to cover the administrative costs incurred when ending a loan contract.
Break Cost: If you currently have a fixed-rate home loan and you want to refinance before the end of your fixed term, you’ll most likely have to pay a break fee. This is to cover any potential losses your current lender may incur due to the agreement ending earlier than it was scheduled to.
Settlement Fee: Settlement fees are paid to a lender to settle a new loan, covering the lender’s legal representation who will attend the loan settlement with you and your conveyancer or solicitor.
Mortgage Registration Fee: A mortgage registration fee is charged by the state government for your mortgage to be added to a register. This prevents you from selling the property without paying back the lender.
Time & Effort: It takes time to compare home loans and assess terms and conditions between different lenders. Working with a broker can assist with this, but you will still need to invest your time in the process.

First Home Buyers

How Much Will My Repayments Be?

To understand your monthly loan payment, you must divide your interest rate by 12. From this calculation you will need to multiply the answer by your principal. A simple way to look at this is:

Monthly repayment = Principal x (Interest Rate / 12)

What Is The First Home Owner Grant, And Am I Eligible?

To understand the First Home Owners Grant and the eligibility criteria in Western Australia, there are a range of resources to explore, including:

How Do Banks Calculate Home Loan Interest?

Your loan’s interest is calculated on the outstanding balance at the end of each day and charged to your account monthly. The outstanding loan balance is multiplied by your interest rate and then divided by 365 days.

Personal Loans

Who Can Apply For A Personal Loan?

The eligibility of an individual applying for a personal loan hinges on the following factors:

Be at least 18 years old
Hold Australian or New Zealand citizenship, Australian permanent residency, or an eligible visa
Live in Australia
Meet minimum income requirements
Be employed or receive regular income
Hold a good credit rating
Not going through the bankruptcy process

What Can I Use My Personal Loan For?

Here are some common ways a personal loan is used:

Purchasing a new car
Holidays
Renovating your home
Buying large appliances like a fridge or television
Consolidating existing debts

How Much Can I Borrow?

Minimum loan amounts generally range from $1,000 to $5,000, dependant on the lender. The maximum an individual is able to borrow depends on the type of loan. For secured personal loans, up to $2 million can be borrowed, while unsecured loans generally max out between $60,000 and $80,000.

Commercial Refinancing

Can I Refinance A Business Loan?

Yes, you can refinance a business loan. Before entering into the process, it is critical to understand why you are considering commercial refinancing – what about your current loan isn’t working for you? Once you understand your reasoning behind refinancing, it will be far easier to evaluate the options available.

When Is The Right Time To Refinance My Commercial Loan?

All funding should be reviewed annually to ensure it is still in line with your business requirements. It is considered best practice to review all funding agreements, whenever new funding is arranged. As business strategies evolve, it is critical to review funding structures to ensure they will not hamper operations. Your broker should always be involved in – or notified of – any changes to your business strategies.

Why Should I Consider Commercial Refinancing?

Commercial refinancing has the potential to provide benefits to your business, including:

The outsourcing of funding management to a professional advisor ensures market comparisons are efficiently and accurately evaluated.
Knowledge and experience of your broker allows for the efficient formation of views on market appetite and funding terms from a range of lenders. This provides you with tailored funding solutions to suit your business requirements.