05 April 2016 Mortgage Basics Seven mortgage questions to ask your lender There are many things to consider about your mortgage when you are looking at buying a new house or refinancing an existing loan. To find out more about what mortgage options are available to you, call 13 RAMS (13 7267) to make an appointment with your nearest RAMS Home Loans Centre. 1. How much can I borrow? Depending on your income and what you’re buying, you can borrow as much as 95%1 of the purchase price (or valuation if lower). You can use our Mortgage Affordability Calculator to receive an indicative borrowing amount. 2. What costs are involved in buying a property? You’ll need to set aside funds for a building and pest inspection of the property to ensure it’s sound, plus legal costs, government stamp duty, lender’s fees and other loan set-up costs including RAMS Risk fee and application fees. 3. Is the loan with the lowest interest rate the best? It depends on your needs. Loans with slightly higher interest rates generally offer more flexibility and features that may be worth paying for, for example, free redraw. 4. Can I ensure my repayments don’t change? Yes, if you want to ensure your repayments don’t change you can take out a Fixed Rate option for a term of 2, 3 or 5 years. This will ensure that for the period you choose your repayments won’t change when the variable rate changes. 5. Can I make extra repayments and access these funds if I need to? Yes, in most cases you can but this depends on the product. See individual product features for full details. 6. What happens if my interest rate goes up or down? If you have a variable rate loan and your rate goes up or down, we will recalculate your minimum repayment based on the new rate. We will write to you to advise your new repayment. If you have a fixed rate loan, your rate and repayments will not change during the period of the fixed rate agreement. 7. What if I need extra money? You can apply for a loan increase which can be useful things such as a new car, home improvements, children’s education or a holiday, all at home loan interest rates. Fees and conditions apply. 1Funds to cover transaction costs and deposit required. Subject to loan serviceability. If for investment purposes, must hold 20% of the purchase price in equity in other residential real estate or income earning assets.