What every woman should check before signing a mortgage application

What every woman should check before signing a mortgage application

Quick answer Before signing a mortgage application in Australia, every woman should check seven things: whose name is going on the loan and the title, whether the loan structure suits your future (not just your present), what your real serviceability looks like on your income alone, whether all your debts and expenses have been disclosed accurately, what fees and rate type you're locking in, what happens if your circumstances change, and whether you fully understand the document before you sign. Asking these questions before signing is far easier than untangling a regrettable decision afterwards.

This post is your pre-signing checklist. Read it before you put your name on anything.

I see this often.

A woman comes to me three years after taking out a mortgage with her husband, and she's only just discovered that her name isn't on the title. Or that she signed a guarantee she didn't fully understand. Or that the loan was structured in a way that suited him, not her. Or that she didn't know she could have asked for any of it to be different.

The mortgage industry is set up assuming you know what to ask. Most women, especially first-time buyers or women buying jointly with a partner, don't. Because nobody tells them what the questions are.

So here's the list. Before you sign anything, work through this.

Whose name is going on the loan, and whose name is going on the title?

This is the single most important question, and the one most women never think to ask.

The loan and the title are two separate things.

• The loan is the debt. Whoever is on the loan is legally responsible for the repayments. -The title is the ownership. Whoever is on the title legally owns the property.

You can be on the loan but not the title. You can be on the title but not the loan. You can be on both, or neither.

If you are buying with a partner, both of you should generally be on both. If only one of you is on the title, that person owns the home. If only one of you is on the loan, only that person is liable for the debt. If you are buying alone, you should be on both, full stop.

The number of women I have seen sit in my office and discover that they were never on the title of the home they raised their kids in is too many to count. If you have not yet read [Stupid, I Know] it covers exactly this territory.

Before you sign: ask the question explicitly. Get the answer in writing. Confirm with your conveyancer, not just your broker or banker.

Does the loan structure actually suit you?

Not all loans are the same. The big ones to understand:

• Variable vs fixed rate. Variable rates move with the market. Fixed rates lock in for a set period (usually 1 to 5 years). Each has trade-offs.

• Principal and interest vs interest only. P&I means you're paying down the loan. Interest only means you're not. Interest only is rarely right for owner-occupied homes.

• Offset account. A transaction account linked to your loan that reduces the interest you pay. Almost always worth having.

• Redraw facility. Lets you access extra repayments you've made. Useful, but rules vary.

• Loan term. Standard is 30 years. Shorter terms mean higher repayments but less interest paid overall.

• Split loans. Part fixed, part variable. Useful for hedging your bets if rates are uncertain.

Before you sign: make sure the structure suits your future, not a generic borrower's. If you might receive a lump sum (settlement, inheritance, bonus), an offset account matters. If you're planning to renovate, a redraw facility matters. If your income is variable, fixed certainty might matter more.

A mortgage broker should be talking you through these options, not just handing you the cheapest rate.

Is the serviceability calculation realistic?

Lenders use a serviceability buffer when assessing your application, which is currently 3 percent above the actual rate. This protects you from rate rises, but it also means the loan they approve assumes you can handle higher repayments than you'll actually pay (initially).

Before you sign: do your own honest serviceability calculation. Could you make these repayments comfortably? Comfortably enough to keep saving, paying for childcare, eating out occasionally, going on holiday? Or are you stretched to the edge?

The bank will sometimes lend you more than you should comfortably borrow. That doesn't mean you have to take it.

Also ask:

• What happens if interest rates rise another 1 percent?

• What happens if your income drops by 20 percent?

• What happens if you take parental leave or carer's leave?If the answer is "I can't make the repayments," the loan is too big. Borrow less than the maximum.

Have all your debts and expenses been disclosed accurately?

Lenders will ask about every debt you have, every monthly expense, every regular commitment. Be honest, but be accurate. Many women either:

• Understate expenses because they're worried about being declined

• Overstate expenses because they're tracking household spending that includes things they no longer pay for (or never did)

Either is a problem. Understating expenses can lead to a loan you can't actually service. Overstating can mean you're approved for less than you genuinely qualify for.

Common things to include:

• Rent or current mortgage repayments (if any)

• Utilities, internet, mobile, streaming services

• Groceries, fuel, childcare

• Insurance (health, car, home, life)

• HECS/HELP debt

• Credit card limits (lenders count the limit, not the balance)

• Buy-now-pay-later balances

• Personal loans, car loans

• Child support paid or received

• Subscription services and memberships

Before you sign: do an honest budget for one to three months and use real numbers, not estimates.

What rate, fees and charges are you actually agreeing to?

Mortgage paperwork is dense, and the costs are spread across multiple documents. Before you sign, you should know:

• The interest rate for variable, fixed, or split portions

• The comparison rate (the actual cost including fees, more useful than the headline rate)

• Application fees and establishment fees

• Annual or monthly fees on the loan or any package

• LMI cost if you're borrowing more than 80 percent (unless an exemption applies)

• Discharge fees if you ever pay out or refinance the loan early

• Break costs on fixed loans (sometimes very large)

• Valuation and legal fees

• Stamp duty (separate from the loan, but a major cost)

Before you sign: ask for a full written breakdown of every fee. Compare it against at least one other lender's offer before committing. Your broker should give you a comparison of three lenders.

What happens if your circumstances change?

This is the question women rarely ask, and it's the one that matters most.

What happens if:

• You separate from your partner?

• You lose your job?

• You get sick or injured?

• You have a baby?

• You want to renovate or extend?

• You want to sell early?

• You inherit money and want to pay down the loan?

• You want to use the equity to buy an investment property?

Most of these scenarios are manageable, but only if you understand your loan's flexibility. Some loans have heavy break costs. Some have generous redraw facilities. Some are easy to refinance. Some lock you in.

Before you sign: ask the broker or lender how each of these scenarios would play out under this specific loan. If they can't answer clearly, that's a flag. If you're buying jointly and you're worried about a future separation, [Buying a house after divorce in Australia]

walks through what that actually looks like.

Do you understand the document you're signing?

If the answer is "not really, but my broker said it's fine," stop.

Loan contracts are legal documents. You are agreeing to repay (often) hundreds of thousands of dollars over decades, secured against your home. You should understand:

• What you're borrowing

• What you're repaying, and over what period

• What happens if you default

• What you're allowed to do (overpayments, redraw, offset, switching, refinancing)

• What restrictions apply

Before you sign: read the loan offer document in full. If anything is unclear, ask. If the answer is unclear, ask again. If you still don't understand, get an independent second opinion. A solicitor or conveyancer can review loan documents alongside the contract of sale. Some women's legal services and financial counsellors will also review documents at no cost.

You are allowed to take time. You are allowed to ask difficult questions. You are allowed to push back. A good broker or lender will welcome it.

If you're early in the process and want a more comprehensive view of what to do before applying, [Five things to do before you tell him you're leaving] covers the financial groundwork that makes any future application easier, even if separation isn't on the table.

Frequently asked questions

Can I add my name to a mortgage or title later?

Yes, but it's not always simple. Adding a name to a title generally requires a formal property transfer, which can trigger stamp duty and capital gains implications. Adding a name to a loan requires a refinance or formal variation, with the lender reassessing serviceability. Both are doable, but it's almost always easier to get the names right at the start.

What's the difference between pre-approval and full approval?

Pre-approval (sometimes called conditional approval) is the lender's indicative agreement to lend you up to a certain amount, subject to conditions. It's useful when shopping for property because it shows sellers you're serious. Full approval is the formal go-ahead to lend on a specific property after valuation. Pre-approval typically lasts three to six months. Full approval is needed before settlement.

Should I get my own legal advice on a mortgage?

Yes. A solicitor or conveyancer reviewing your loan and contract documents alongside the property contract is highly recommended, and in some states required. Independent legal advice helps you understand what you're agreeing to and flags issues a broker or lender may not raise.

What is Lenders Mortgage Insurance (LMI), and when do I have to pay it?

LMI is insurance that protects the lender (not you) if you default on a loan with less than a 20 percent deposit. It's usually a one-off cost added to your loan amount. There are exemptions for certain professions and for buyers using government schemes like the Australian Government 5% Deposit Scheme, which waives LMI for eligible first home buyers and single parents.

You are allowed to ask the hard questions

The biggest mistake I see women make at the mortgage stage isn't choosing the wrong lender or the wrong loan. It's signing without fully understanding what they're signing.

There is no question too basic. There is no concern too small. The mortgage industry has spent decades teaching people to defer to brokers and bankers. You don't have to.

Before you sign anything, sit with it. Read it. Ask. Push back. Get a second opinion. The loan you take out today will shape your finances for years, possibly decades. Spending an extra week to understand it properly is one of the highest-return investments you can make.

If you want a private, free space to work through what you're being offered before you commit, that's exactly what Runa was built for. No broker calls. No sales pitch. Just the tools and knowledge to help you understand what you're looking at.

Sign up free at [runaapp.com.au]

You may also find these helpful

• Stupid, I Know: why so many Australian women find themselves starting over without a home in their name

• Five things to do before you tell him you're leaving

-Buying a house after divorce in Australia: a complete guide

• Borrowing capacity for single parents: what lenders actually look at

Sources and references

This post is primarily based on Rielle's professional experience as a mortgage broker.

The following sources are referenced or relevant to topics covered:

• APRA macroprudential guidance (3% serviceability buffer)

- Australian Government 5% Deposit Scheme (LMI exemption)

• ASIC Moneysmart on home loans

*This article is general information only and does not constitute financial, legal or tax advice. Please speak to a licensed financial adviser, solicitor and your superannuation fund about your specific circumstances.

**Rielle Berglund is a mortgage broker and the founder of Matilda Tree Finance. She works with Australian women navigating major financial transitions, including separation, divorce, terminal illness and bereavement. She is also the creator of Runa, a free financial literacy app built for exactly this stage of life.

**Book a confidential conversation with Rielle at [matildatree.com.au]

or start with Runa, free, at [runaapp.com.au]