Answers to common questions

Frequently Asked Questions

A valuation on the property you are using to secure your loan with us allows us to determine a few essential points during the assessment of your loan application. The formal report provided by an independent and accredited valuer confirms some important information about the property, including its value and its acceptance under our lending guidelines.
The Loan to Value Ratio (LVR) is the percentage of the property value that you’re borrowing. For example, if your property is valued at $500,000, and you are borrowing $400,000 your LVR would be $400,000/$500,000 = 80%

The reality is there is no exact answer to this as there are numerous variables that need to be taken into consideration. At Kelston Capital, we are able to provide our clients with a detailed breakdown of what the repayments will be after each progress payment which is tailored to your development.

Lender’s Mortgage Insurance (“LMI”) protects the lender if you are to default on your home loan, and the proceeds from the sale of the property are not enough to cover the outstanding balance of the loan. In most cases LMI is only required when your Loan to Value Ratio (LVR) is over 80%. You can either nominate to have the LMI capitalised onto the loan amount or you can pay this out of savings or cash you have available.

Equity is the difference between the market value of your home and the amount that you owe your lender. To calculate how much equity you have, simply deduct your loan balance from the estimated value of your home. IMPORTANT to note that this is not your useable equity. Your useable equity is going to depend on what your LVR is.