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FAQs

Providing answers to all of your questions

General FAQ's

A mortgage manager, or non-bank lender, traditionally sources its funds from wholesale funders who do not have a retail presence. Collective Lending holds agreements with wholesale funders who have multiple warehouse funding agreements with domestic and global investment banks for residential and commercial lending products. Read more here.

LMI (Lenders Mortgage Insurance) is a form of insurance that is taken out by the lender to protect themselves should the client default (e.g. can’t repay their loan).  It is a once off premium that the borrower pays and is generally only required if the LVR is higher than 80%.  The key point to remember is that LMI covers the lender, not the borrower.

LVR means Loan to Value ratio. LVR is calculated by dividing the amount of the loan by the value of the property. Depending on the loan product you choose, there will be a maximum LVR applicable. Usually this is 95%. Knowing what this is, is important to working out how much deposit you will need if you are buying a new home. If your LVR is over 80% you may also be required to pay Lenders Mortgage Insurance.

A Target Market Determination is a document which sets out the target market for a financial product, as well as information regarding the distribution of that product. We’re required to have Target Market Determinations for each of our products under the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019.

Refer to our Target Market Determinations here.

The interest rate is what determines the amount you will be required to repay over the life of your home loan. If you have a variable rate home loan, your repayments will rise and fall in line with your interest rate (i.e. if your interest rate decreases so will your repayments).  If you have a fixed rate loan and interest rates increase, your repayments and interest rate won’t be affected during your fixed rate period. 

Similar to an offset account, our sub account is a non transactional account that you can use to deposit funds to offset your interest. Unlike redraw, the sub account gives you full visibility of the extra funds you have available.

Sub & Transaction Account FAQ's

The loan and sub account balances can be checked via the Online Customer Portal.

Please refer to this separate FAQ guide on how to navigate the Online Customer Portal.

Yes. However the purpose of the account is for the client’s sole use otherwise AML issues may potentially arise. Suspicious activity will be reported.

Yes. You must use BSB number 016-937 and add your loan or sub account number to your transaction number.

The details are provided to you at settlement, or alternatively the BSB for both loan and offset is 016-937 and applies to all borrowers. The BSB is to be used in conjunction with the loan or sub account number.

The Pay Anyone feature enables transfer of funds out of the sub account (note daily redraw limits apply).

Yes. This can be to one of your own bank accounts or a third party with an Australian bank account.

Yes. You are required to initiate the transfer from your bank using SWIFT and can transfer the funds to the lenders Collections account (this is not their loan or offset account). It is important that the you correctly identify the payment by including your loan account number to the remitter bank, so that the payment can be applied correctly to the lenders loan account.

The daily redraw limit is $10,000, which can only be sent to the clients nominated bank account.
No. Redraw is not available for SMSF loan accounts.

New loan documents will include the sub account details. For older loans, a variation letter is required.

This depends on the product you have applied for. To confirm if an offset premium will apply to your loan refer to the team at Collective Lending or your broker.

Yes. Until the payment is matched to your loan account, the account will be flagged as in arrears. Once the payment has been identified, it will be applied to the loan account with the effective date being the date the funds were received.

Any additional funds paid towards the loan repayment via the Online Customer Portal will be available as redraw and won’t be refunded.

If you are late in making your repayment, interest will continue to accrue on the higher loan balance. Accrued interest applies at the daily rate multiplied by the daily balance until the payment has been made.

At the application stage or alternatively if the client already has an active loan, they can request a sub account to be set up and linked to their loan.

Yes. The borrowing entity type does not affect this.

This is still a work in progress and has not yet been made available by the lender. We are constantly improving and enhancing our products each day, so please check back in with us or your broker for a further update on what features are available for all of our products.

FASTRefi®

FASTRefi® is a process that allows a refinance to occur very quickly (usually within days rather than weeks) after loan documents have been signed without the need to arrange a settlement with the Outgoing Financial Institution (OFI) before the refinance of a loan settles.

There are many benefits of using the FASTRefi® process including:

  • Better client experience as funds received within days of returning signed
    loan documents
  • Client could access a lower interest rate faster therefore saving money
  • Client receives surplus funds faster
  • Certainty of date for funds

Not all loans can be processed as FASTRefi®. The following conditions need to be satisfied to be able to proceed as a FASTRefi®:

  • Please check with our team if the Outgoing Financial Institution is on the approved OFI List
  • Loan is not an active construction loan that has further progress payments remaining
  • Security Property is not Native Title, Company Title, Old System Title or Moiety Title (SA)
  • No unregistered dealings that may prevent registration of a mortgage
  • The names on the title of the property being used as security need to match exactly or Change of Name needs to be held
    before settlement

There are two additional forms that the client needs to complete and sign for FASTRefi®. These forms will be included in with the other home loan documents. These forms are:

  • Borrower’s Acknowledgment, Undertaking and Payout Advice (BAUPA) form
  • Irrevocable Authority form
There are no additional costs to process a refinance using FASTRefi®.
When calculating the payout figure, the lender will include your loan balance, 1 months repayment and 1 months interest and a small buffer. This ensures that the existing loan is paid out in full. Any surplus amount that is not used to close the current loan will be refunded to the client shortly after settlement.

A buffer is an amount that we add to each payout figure to cover any additional fees or charges by the OFI to close the account. This helps to ensure the lender pays out the refinanced loan in full. It is not a fee.

Normally the buffer amount is adequate to payout the outgoing lender, however in some instances there may still be an amount outstanding. This is referred to as a shortfall. Shortfalls usually occur when the client has forgotten to disclose all debts linked to the security property, redrawn funds from an account being refinanced or have not cancelled direct debits processed on the account. We will advise you if there looks to be a shortfall for your refinance, you may be required to pay additional funds into your loan before the refinance can be finalised.
There’s no need to worry if you see interest accumulating on both your old loan and new loan accounts. The interest charges on your old loan will be backdated to when the loan payment was made to it

FASTRefi® is provided by First American Title Insurance Company of Australia Pty Limited ABN 64 075 279 908 Australian Financial Services Licence 263876, trading as First Title, an Australian general insurance company authorised by the Australian Prudential Regulation Authority.

If you still have further questions, feel free to contact the Collective Lending team.

Contact by Phone

1300 19 11 24

Contact by Email

team@collectivelending.com.au

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