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Frequenty Asked Questions
General Questions
Applying for a Rate Star Home Loan
Servicing Your Loan
Fees and Charges
General Questions
1. Who is Rate Star?
Rate Star is a 100% Australian owned and operated company formed in April 2007. The company was established to provide our own branded low cost, low rate home loans.
2. What does Rate Star offer?
Our home loan products include such features as unlimited re-draw at no cost, no application fees, interest rates amongst the lowest available on the home loan market and the ability to apply, 24 hours a day, 7 days a week.
3. Can I speak to someone if I need help?
If you cannot find the information you are looking for, or you have a question that is specific to your own situation, simply email us or call Rate Star on 1300 665 044 (if calling from outside Australia +61 1300 665 044 - international call rates apply).
4. What type of products do Rate Star offer?
At Rate Star there are 2 product types: housing loans (available as principal and interest, interest only for 2,3,5 or 10 years) and lines of credit (interest only for the first 15 years, converting to principal and interest). Construction is an option on all loan products with the exception of line of credit and non-resident loans. One loan may be split into a maximum of four accounts. To assist with taxation returns, each account receives an individual statement. Each account can vary in product type and/or repayment options
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Applying for a Rate Star Home Loan
1. How many people can apply for a Rate Star home loan?
Up to 4 applicants can apply for a Rate Star home loan. If you require more than 2 applicants all you need to do is reprint the application form.
2. What is the First Home Owner's Scheme Grant?
Eligible first home buyers can receive non-means tested government assistance of $7,000. The scheme is administered by the States and Territories. It covers only the purchase of your first home in Australia. If you are married or living in a de facto relationship, you must make a joint application for the grant with your spouse or de facto. Neither of you can have owned a home previously, whether individually, or with any other person. You will be eligible to apply if you:
- are buying your first home
- are an Australian citizen or permanent resident
- intend to make the home your principal residence, and
- start living in the home within a reasonable time.
The payment will be the same regardless of your income.
Visit the First Home Owner's Scheme web site for more details or to download an application form.
3. How many properties can I offer as security for a Rate Star home loan?
Unlimited properties can be offered as security.
4. What's pre-approval?
Pre-approval generally means gaining an estimate from the lender of how much you may be able to borrow, based on your financial circumstances. To obtain pre-approval at Rate Star complete the application forms found here.
5. What financial details do I need to provide when applying for a Rate Star Home Loan?
Depending on your circumstances you may need to provide the following information:
- details of your income
- details of your bank accounts
- details of your assets including shares, life insurance policies, motor vehicles and personal effects
- details of your liabilities including other loans, credit cards and store cards.
If you are self-employed and wish to apply for an income verified home loan you will need to provide up to date financial statements or income tax returns for the last 2 years. For further information view full document requirements here.
If you are unable to supply your financials you may need to apply for a low documentation or equity home loan.
6. I am self-employed, but my tax returns or financial statements are not available. Can I apply for a Rate Star home loan?
Yes, you will able to apply for either a low documentation or equity home loan. The Rate Star Low Documentation Home Loan is suitable for self employed applicants , a minimum self-employment period of 2 years is required and home loans are available for owner occupied or investment property purchases, construction, refinancing existing residential or business loans. The Rate Star Equity Home Loan is suitable for self employed applicants who also cannot supply income verification documentation to support their application with the exception that there is no minimum net asset position required and no minimum self-employment period and home loans are also available for owner occupied or investment property purchases, construction, refinancing existing residential or business loans.
7. What is Lenders' Mortgage Insurance?
If you borrow more than 80% of the security property's value you will need to pay Mortgage Insurance. This insures the lender against any loss incurred in the event the security property is sold for less than the balance of the loan. However, the borrower still remains legally responsible for repaying the shortfall.
The insurance premium is paid by the borrower at settlement or funding, from the loan account.
8. What deposit do I need?
You may borrow up to 97% of the property's value for either an owner occupied or investment loan (some conditions and exclusions apply). When calculating the deposit required to purchase a property take into consideration the additional costs required to purchase the property including govt charges and lenders mortgage insurance costs.
9. Are there any purposes that Rate Star will not lend money for?
For a complete list of the acceptable loan purposes at Rate Star click here.
10. Can I apply for a home loan if I am not an Australian resident?
Yes (conditions apply).
11. How long does it take from application to settlement (or funding)?
Once your application and all the necessary information has been received by Rate Star you should receive conditional loan approval, or a request for further information, within 24 hours. If the loan is conditionally approved, you will then receive a conditional approval email containing a request for further information. The specific documentation required can be found here and will also be listed in your conditional approval email. Once we receive your documentation, we complete verification of your details. When your application details have been verified, and satisfactory valuation/s completed and Lenders' Mortgage Insurance approved (if either are required), we will contact you via telephone if your loan is formally approved. Once your home loan has been formally approved you will then receive your loan documentation in the mail which you will need to read sign and promptly return. Settlement is the final step of the process where solicitors/conveyancers and Financial Institutions meet to exchange all documents and monies. Generally this process takes about 30 days all though it is possible to refinance a home loan from another lender in a shorter time frame.
12. Can we receive correspondence in both our names?
It is a requirement of the Consumer Credit Code (CCC) that every party to a loan receives individual copies of the loan documents, notices, etc. However, where joint borrowers all live at the same address the CCC allows parties to nominate one of them to receive notices and other documents on behalf of the other party.
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Servicing Your Loan
1. How do I repay my loan?
Repayments can be made electronically by direct debit from your bank account or by salary crediting (available on eligible products).
2. Can I make extra repayments, and if so, how?
Yes, you can make extra repayments by either increasing your direct debit repayment amount (the amount you are paying from an account) or salary credit repayment amount.
3. Can I alter my repayments?
You can alter your repayments by changing your direct debit or salary credit amount, subject to the Required Monthly Repayment Amount being met.
4. Can I pay weekly, fortnightly or monthly?
Yes. Except for where you have chosen an interest only payment option, you may make your repayments weekly, fortnightly or monthly.
Interest only payments must be made monthly via direct debit from a related account.
5. Does Rate Star have Repayment Redraw?
Yes. Free Repayment Redraw is available on variable rate loans. Minimum re-draw $50 when using Loan Service Line or Loan Service Net for all variable rate loans
6. What is an interest only loan?
An interest only loan allows you to pay only the interest on the loan, rather than paying both principal and interest. This payment option may be useful for property investors because it maximises the investor's tax deductions. This option may also have the added benefit of freeing up cash flow for alternative investments.
You can choose to have an interest only option for a maximum period of ten years on both Home and Investment Home Loans and 15 years for a Line of Credit Home Loan.
7. Can I top up my loans?
Yes, Rate Star allows you to add other purchases to your existing loan. A Top-Up is useful for things such as a new car, renovations, children's education or a holiday, all at home loan interest rates. The minimum Top-Up amount is $20,000. To apply for a Top-Up loan you will need to complete a new loan application noting your existing Rate Star account number.
8. Can I pay out my loan early?
You may pay out your loan early without incurring early repayment fees, however, a deferred establishment fee may apply if your home loan is paid out in full within the first 5 years.
9. Will Rate Star take a second mortgage as security?
No. Like most lenders, Rate Star requires a registered first mortgage as security.
10. What type of security is Rate Star unable to accept?
Information about acceptable and non-acceptable securities can be found here.
11. What is discharge of loan?
A loan is discharged when it is paid in full, the title no longer has a mortgage registered against it, and can be released to you.
12. How do I discharge my loan?
Call us on 1300 665 044 (if you are calling from outside Australia +61 1300 665 044 - international call rates apply) and request a discharge form to be sent out to you.
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Fees and Charges
1. Are there any ongoing fees and charges?
There are no ongoing loan service fees or charges with a Rate Star Home Loan excluding the Flexible Plus Home Loan which has a $395 annual fee.
2. When do I have to pay a Deferred Establishment Fee (DEF)?
The Deferred Establishment Fee applies to all loans, if the loan is paid out within the first five years from the date of the first loan drawing.
3. How will the DEF affect my loan if I have a Top-Up loan?
All Top-Up loans have the Deferred Establishment Fee and will be payable if the loan is repaid within 5 years from the first drawdown of the topped up loan.
4. When do I need to pay stamp duty or registration fees?
In most cases, mortgage stamp duty and registration fees will be debited to the loan.
For properties that are purchased in Victoria and Western Australia, Transfer Stamp Duty will be transferred from your bank account on or before the date of settlement. Your solicitor/conveyancer will be able to provide you with the exact figure that will be required.
If you wish to find out more information about stamp duty, please visit the Office of State Revenue for your State or Territory.
5. Do I have to pay mortgage stamp duty if I refinance?
If you choose to simply refinance a loan and the new loan amount is not exceeding the original amount of the loan being refinanced, where there are no changes to your name/s on the title deed or on the loan contract, you won't be charged mortgage stamp duty - except in Qld and SA. However, under certain circumstances mortgage stamp duty may be payable in other States and Territories as well. Please contact the Office of State Revenue in your State or Territory for further details.
6. Other than government charges, what are the fees?
A complete list of fees is available in the fees section and these will also be detailed in our loan offer to you.
7. Do first home buyers receive any stamp duty concessions?
Most State Governments also offer various means-tested packages to assist first home buyers. This may include eligibility for discounts on stamp duty.
For more information on the First Home Owner's Grant or other Government assistance programs, visit the First Home Owner's Scheme web site or speak to your solicitor.
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