Frequently Asked Questions
Get answers to common mortgage and home loan questions
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General Questions
What does a mortgage broker do?
A mortgage broker acts as an intermediary between you and lenders. We compare home loan options from 30+ lenders to find the best fit for your situation, handle the paperwork, and guide you through the entire application process. Our service is free for most clients as we are paid by the lender when your loan settles.
Is using a mortgage broker free?
Yes, for most standard home loans our service is free. We're paid a commission by the lender when your loan settles. This commission is already built into the loan—you don't pay extra for using a broker. In some complex cases (like debt consolidation), there may be a fee which we disclose upfront.
Why use a broker instead of going direct to a bank?
Banks can only offer their own products. A broker compares options from 30+ lenders to find you a better deal. We're also legally required to act in your best interest (Best Interest Duty), whereas bank staff work for the bank. Studies show broker clients often get lower rates and better loan features.
How long does the home loan process take?
Pre-approval typically takes 1-3 business days. Once you have a property, full approval usually takes 3-5 business days, though complex applications may take longer. Settlement typically occurs 30-90 days after signing contracts, depending on your agreement with the seller.
What areas do you service?
We're based in Melbourne's western suburbs and specialise in Truganina, Tarneit, Point Cook, Werribee, Hoppers Crossing, Wyndham Vale, and Manor Lakes. However, we can help clients anywhere in Australia as most of our process is digital.
First Home Buyers
How much deposit do I need for my first home?
Most lenders require a minimum 5% deposit, though some government schemes allow 2%. With less than 20% deposit, you'll typically need Lenders Mortgage Insurance (LMI). First home buyers may qualify for the First Home Guarantee scheme which allows 5% deposit without LMI.
What is the First Home Owner Grant (FHOG)?
The FHOG is a $10,000 Victorian government grant for first home buyers purchasing or building a new home valued up to $750,000. It applies to newly built homes or substantially renovated properties—not established homes. You must be an Australian citizen or permanent resident and never have owned property in Australia.
Can I use my superannuation for a house deposit?
Yes, through the First Home Super Saver Scheme (FHSS). You can withdraw voluntary super contributions (up to $50,000) for your first home deposit. The scheme allows you to save within super at a concessional tax rate. Contact the ATO to check your eligibility and release amount.
What stamp duty concessions are available for first home buyers?
In Victoria, first home buyers pay no stamp duty on properties up to $600,000 and reduced stamp duty on properties $600,001-$750,000. This can save you up to $31,070. The property must be your principal place of residence for at least 12 months.
Can my parents help me buy a home?
Yes, there are several ways parents can help. They can act as guarantors (using their property as security), gift funds for your deposit, or co-purchase with you. Each option has different implications for tax, borrowing capacity, and asset protection. We can explain the pros and cons of each approach.
Refinancing
When should I consider refinancing?
Consider refinancing if: your current rate is higher than market rates, you've been with your lender for 2+ years, your property value has increased, you want better loan features (like an offset account), or you want to consolidate debts. A rate reduction of 0.5% on a $500,000 loan saves about $2,500 per year.
How much does it cost to refinance?
Typical costs include discharge fees ($150-400) from your current lender and government registration fees (~$200). Many new lenders offer cashback ($2,000-$4,000) or waive application fees, often offsetting the costs. We calculate the net benefit before recommending a switch.
Will I need a property valuation to refinance?
Usually yes, but many lenders offer free automated (desktop) valuations. If a full valuation is required, the lender typically covers the cost. We check your property's estimated value before submitting to ensure the valuation will support your application.
Can I refinance with bad credit?
It depends on the nature and timing of the credit issues. Minor blemishes older than 2 years may not be a problem. Serious defaults or current issues limit options but some specialist lenders can help—typically at higher rates. We review your credit file and advise on realistic options.
What is a break cost on a fixed rate loan?
If you exit a fixed rate loan before the fixed period ends, you may face 'break costs.' These compensate the lender for lost interest and can be substantial (thousands of dollars) if rates have dropped since you fixed. We factor potential break costs into our refinance assessment.
Investment Loans
How much equity do I need to buy an investment property?
To use your home's equity, most lenders require you to maintain at least 20% equity in your existing property after releasing funds. For example, if your home is worth $800,000 and you owe $400,000, you have $400,000 equity—but usable equity is typically $240,000 (80% of value minus debt).
What is negative gearing?
Negative gearing occurs when your investment property expenses (interest, maintenance, etc.) exceed rental income. The loss can be offset against your other income, reducing your tax. While it provides tax benefits, you're still making a loss—the strategy relies on capital growth to be worthwhile.
Should I choose interest-only or principal and interest?
Interest-only reduces repayments and maximises cash flow—popular with investors for tax efficiency. However, you're not building equity and the loan balance doesn't reduce. Principal and interest builds equity faster but reduces cash flow. Your choice depends on your investment strategy and financial goals.
What is cross-collateralisation and why avoid it?
Cross-collateralisation means multiple properties secure a single loan. While convenient, it can limit your flexibility—you may need lender approval to sell one property, and the bank has more control over your portfolio. We typically recommend separate standalone loans for each property.
Can rental income help me borrow more?
Yes, but lenders typically only count 70-80% of rental income when assessing serviceability. They apply 'haircuts' for vacancy rates and property expenses. Investment loan rates are also slightly higher than owner-occupier rates, which affects borrowing capacity.
Construction Loans
How does a construction loan work?
Unlike a standard loan where funds are drawn in full, construction loans release funds in stages as building progresses. You pay interest only on drawn amounts during construction. Typical stages are: deposit, slab/base, frame, lock-up, fixing, and completion. Full principal and interest repayments begin after completion.
What deposit do I need for a construction loan?
Most lenders require 10-20% of the total project cost (land + build). This can come from savings, equity in another property, or a parental guarantee. First home buyers may also access grants and stamp duty savings which effectively reduce the deposit needed.
Can I use the First Home Owner Grant for building?
Yes! The $10,000 FHOG applies to new builds where the total value is under $750,000. Building a new home is actually one of the best ways to access this grant since established homes don't qualify. The grant is typically released at the first or second progress payment stage.
What documents does the builder need to provide?
Lenders require: a fixed-price building contract, council-approved plans, builder's licence and insurance certificates, and a construction timeline. The contract should clearly outline progress payment stages. Variations (changes during construction) need lender approval if they increase the loan amount.
Can I be an owner-builder?
Some lenders offer owner-builder construction loans, but they're more restrictive. You'll typically need relevant experience or qualifications, a larger deposit (often 30%+), and detailed project management plans. Most lenders prefer registered builders due to reduced risk.
Borrowing & Capacity
How much can I borrow?
Borrowing capacity depends on your income, expenses, existing debts, dependents, and the deposit you have. As a rough guide, most people can borrow 5-6 times their gross annual income—but this varies significantly by lender and individual circumstances. Use our borrowing calculator for an estimate, or book a call for an accurate assessment.
What affects my borrowing capacity?
Key factors include: gross income (and income type—PAYG vs self-employed), existing debts (personal loans, credit cards, HECS), living expenses and dependents, the interest rate buffer (lenders add 3% to the rate), and loan term. Even unused credit card limits reduce borrowing capacity.
Does HECS/HELP debt affect my borrowing?
Yes, HECS/HELP reduces your borrowing capacity because lenders factor in the repayment as an ongoing commitment. The impact depends on your income—higher earners pay more HECS so their capacity is reduced more. Some lenders are more generous than others in how they assess HECS.
What is Lenders Mortgage Insurance (LMI)?
LMI protects the lender (not you) if you default on your loan. It's required when you borrow more than 80% of the property value. LMI can cost thousands of dollars and is usually added to your loan. First home buyers may avoid LMI through government guarantee schemes.
What credit score do I need for a home loan?
While there's no universal minimum, a score above 650 gives you access to most lenders. Scores 600-650 may limit options but loans are still available. Below 600, you may need specialist lenders with higher rates. Defaults, missed payments, and multiple credit applications negatively impact your score.
Application Process
What documents do I need for a home loan?
Typically: identification (passport, driver's licence), proof of income (payslips, tax returns for self-employed), bank statements (3 months), details of assets and liabilities, and information about the property. Self-employed applicants need 2 years of tax returns and financial statements.
What's the difference between pre-approval and full approval?
Pre-approval (conditional approval) confirms how much you can borrow based on your finances, before you find a property. It's valid for 3-6 months and gives you confidence when house hunting. Full approval (unconditional approval) comes after the lender assesses the specific property you want to buy.
How long is pre-approval valid?
Typically 3-6 months, depending on the lender. After it expires, you'll need to reapply—which may involve updated documents and a fresh credit check. If your circumstances change (job, income, debts) during this period, your pre-approval may be reassessed.
What happens on settlement day?
Settlement is when ownership officially transfers from seller to you. Your lender releases funds to the seller's bank, the title is transferred to your name, and you receive the keys. Your conveyancer/solicitor handles the process—you typically don't need to attend. Settlement usually takes 30-90 days after signing contracts.
Can I switch lenders after pre-approval?
Yes, pre-approval doesn't lock you in. However, each new application triggers a credit check which can temporarily impact your credit score. If you're shopping around, it's best to do so within a short period (2-4 weeks) so multiple checks are treated as a single enquiry.
About J2C
What does J2C stand for?
J2C stands for your Journey To Clarity, Confidence, and Comfort. Clarity means understanding your loan before signing—no jargon or confusion. Confidence means certainty that your 30-year decision is the right one for your family's future. Comfort means a loan that fits your life without stretching you thin.
Who is behind J2C Mortgage Advisory?
J2C was founded after seeing too many families sign loans they didn't fully understand. We're an authorised credit representative of Australian Finance Group (AFG), one of Australia's largest mortgage aggregators, and a member of the Mortgage & Finance Association of Australia (MFAA).
How quickly will you respond to my enquiry?
We aim to respond within 2 hours during business hours (Monday-Friday 9am-6pm, Saturday 9am-1pm). For urgent matters, you can also reach us via WhatsApp or phone. We value your time and won't leave you waiting days for a callback.
Do you offer face-to-face appointments?
Yes, we offer appointments at a location convenient for you—including your home, a local café, or video call. While much of our process is digital for efficiency, we understand some conversations are better had in person. Just let us know your preference when booking.
What happens after my loan settles?
We don't disappear after settlement. We conduct annual loan reviews to ensure your loan remains competitive, help with future purchases or refinancing, and are always available for questions. Many of our clients come back when they're ready for their next property.
Still Have Questions?
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