We specialise in arranging home loans, for new property purchases, refinances or debt consolidations. So, whether you are looking to arrange a home loan to buy a new home or apartment, rural residential property or some other form of residence, looking to refinance your existing home loan, reorganise your existing finances, or simply have some queries as to whether you have the best finance for your current requirements, we can help.
We will listen to your requirements and preferences, undertake the appropriate research and advise you of our finance/lender recommendations and reasons, as well as provide you with detailed, written product information. We will then arrange the loan application, finance approval, loan documentation signup with you, the refinance in need, and continue to liaise with the various other parties (e.g. solicitor, real estate agent) until the matter is finalised. We will then provide you with comprehensive bank contact details after the loan has settled.
So, why not leave it to the experts to do the running around for you, and work out what's the best option for your circumstances. We would be delighted to have the opportunity to arrange your finance for you, so please contact us to discuss the matter further.
The range of home loans currently available include the following types (click on the name underlined for additional information), together with some of the better interest rates currently available (as at 16/1/08):
* Anualised comparison rate based on average loan of $300,000 over term of 30 years.
WARNING: This Comparison Rate applies only to the example or examples given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the Comparison Rate but may influence the cost of the loan.
Lending terms and conditions apply, including: 'Full Doc' loans to have suitable employment, satisfactory security, serviceability and credit history; 'Low Doc' loans to comply with employment requirements, satisfactory security (lending value ratio may also impact on the interest rate), serviceability and credit history. Loan fees may apply.
Basic Variable Rate Home Loan
Many lenders offer basic variable rate home loans with lower interest rates than standard variable rate home loans, however, some may have fewer features than the standard rate home loans. Like all variable rate home loans the interest rate and your repayments can vary over the term of the loan. With the major banks, the biggest advantage is price - basic variable rate home loans have a lower interest rate so repayments are sometimes lower than standard variable rate home loans. However, with some lenders, their home loans have all the features of the standard home loans.
Some lenders normally do not offer the same range of features or flexibility e.g. many basic variable rate home loans cannot be used in combination with other loans and may not be portable (i.e. be able to be transferred to a new property if your residence is sold). It is important that you look into each different lender as you need to work out the advantage or disadvantage of each loan in comparison to one another.
Family Pledge Home Loan
Most of the banks now offer the ability for a family member (generally the applicant's parents) to pledge their support to assist with a loan application. This may be by way of additional security, serviceability or both. Typically, the provision of additional security may alleviate the need to have Lenders Mortgage Insurance on the loan, and could save $000's.
Generally you have full access to all the home loan types, however, it may be advantageous to look at splitting the loan to limit the parent's exposure, consider an interest only portion on the larger portion, with a view of having the parent's security released as quickly as possible.
Again, the banks have a range of policies, in regard to whether first or second mortgages are acceptable security, whether the family member needs to be able to show they can service the debt they are offering to support, etc, so we would be delighted to go through the various options for you.
Fixed Rate Home Loan
Fixed rate home loans allow a borrower to lock in an interest rate for a particular period of time (normally 1 - 15 years). You then have the assurance of your repayments being fixed for that period no matter what interest rates do.
You could also split your loan between a fixed rate portion and a variable rate portion, and get the benfit of both, i.e. a fixed rate portion to hedge yourself against the possibility of an interest rate rise, and a variable rate portion to pay off quicker or to utilse the redraw facility on.
Fixed rate home loans generally have more restrictions usually e.g. most fixed rate loans limit or do not allow extra repayments (without incurring a fee) or you cannot pay out the loan during the fixed rate period without incurring a break fee. Features such as redraw or mortgage offset are usually not allowed during the fixed period of a loan, however combining the loan allows you to take advantage of features available on variable rate loans.
Honeymoon/Introductory Home Loans
Honeymoon (or 'introductory rate') home loans offer customers a special reduced ("teaser") rate for an introductory period, often one year. The interest rate then reverts to a standard or special variable rate (depending on how the initial loan has been set up). There may also be a break fee if you switch the loan to another type, or if you clear the loan in full during the first 4 years after drawdown. As a result, you may be 'trapped' into the higher standard rate loan for the subsequent 3 years - not a good option.
Whilst this might help initial cash flow, by minimising the repayments in the first year, these loans can be on offer with different packages, so again you need to look at the overall package in relation to your specific requirements, working out the overall rate applicable to the loan over a period of years, potential break fees, etc. Be sure to know what the AAPR is - the effective rate of the loan, as part of ascertaining whether to take a discounted rate or not, and also the break or switch fees.
Interest Only Home Loan
No principle repayments are required on interest only home loans - only the interest portion has to be paid on this loan, generally monthly, for the interest only term. Interest only terms are generally available up to 5 years, but some banks offer them up to 15 years.
Some loans can be split with an interest only portion to reduce repayments early on in the loan. Interest only works well with fixed rate loans where the ability to calculate future interest means interest can be paid in advance. This is sometimes a good option for investors.
The interest on a loan is the tax deductible portion of your loan if you are buying an investment, and a fixed portion is sometimes a good option if you are paying off a home loan or more then one mortgage. It is recommended that you speak to an accountant regarding the best way to work the repayments tax effectively.
Line of Credit
Refer Line of Credit page, which has more detail on this facility.
"Low Doc" or Self Certified Home Loan
A low doc or self certified income home loan requires provision of less financial data to the lender. This may be a necessity for a client when they:
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Haven't completed their previous year's tax return;
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Have a complicated or unusual earning structure, e.g. multiple entities, trusts, etc;
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Have had a relatively substantial increase or decrease in their earnings, and their true position is not represented in their previous tax return.
They are particularly suitable for self employed applicants, but also available to selected PAYG customers. Most of the banks have low doc loans these days, however, their policies are different in regard to employment (type and term), suitability of security, serviceability, and the interest rate offerings of the banks vary enormously.
Mortgage Offset Home Loan
A mortgage offset account becomes a personal transaction account. The balance in the account is used to reduce interest on your home loan. You can deposit and withdraw on this account the same as other accounts so it could be set up as an account for depositing your salary for instance. Your offset account is linked to your home loan thereby reducing the balance of your mortgage by the amount of money in your account, generally dollar for dollar; therefore allowing the balance to reduced the interest payable on your mortgage.
It could be used as a Loan Reducer or Mortgage Reduction facility. Different lenders offer different types of Offset features, again you need to shop around to make sure the lenders facilities are in line with your own requirements. Be aware that Mortgage Offset is not necessarily always offset 100%, as some lenders offer 'partial offset' facilties (generally on the basic home loans).
Although ATM, Eftpos, cheque and other access means are available, 100% offset loans encourage borrowers to use a credit card for all purchases and then settle the card in one transaction from the mortgage account per month. This allows the money to remain in the account to reduce the interest for the longest possible period of time.
No Deposit Home Loan
A number of the major banks have recently bought out 'no deposit home loans', and these generally allow you to borrow up to 100% of the property purchase price (some non-major lenders will even allow up to 106% of the property purchase price, to cover costs).
Some of the banks charge standard interest rates, however, some charge a premium interest rate as well as higher setup fees. So the use of a broker will again serve useful to ensure you get the full details and the right finance for your requirements.
Generally, the banks have a higher standard for these loans, i.e. suitable employment by the applicants and a suitable property/location being bought.
Principal & Interest Home Loan
A standard home loan loan on offer from lenders requires that you pay a portion of principal and a portion of interest on every repayment every month ie. amortising home loan. This will ensure that your home loan is repaid within the specified period or term. Paying extra repayment to your home loan will also allow you to pay off the home loan in a quicker period therefore reducing the interest calculated on your home loan, potentially saving you a lot of interest. Depending on the product that you use, you can split your home loan according to the tax effectiveness of the funds that you have borrowed against it i.e. if you have investment debt against your home for example, it is better to pay your home loan debt first, then when this is paid off, concentrate on your investment debt.
Professional Packages ('Pro Pack' Home Loans)
Previously, you needed a professional qualification to get access to one of these packages. However, these days, most of the banks have 'pro packs' available that require a minimum borrowing amount (plus generally that you also open a transaction account and credit card), and in return you get access to discounted, or waived, fees and interest rates. Can be a great option for borrowers, however, all the Bank's packages have variances and niches, and we would be delighted to advise you on whether one is most suitable for you.
Standard Variable Rate Home Loan
The interest rate can vary throughout the term of the home loan - both up and down. The term is usually 25 to 30 years. The advantages of this are that if interest rates fall, your repayments will also come down; you can usually make additional repayments without incurring a penalty allowing you to pay off your home loan faster. Remember, if interest rates rise, your repayments rise as well.
Lenders generally offer lots of packages on the standard variable rates. The advantage of Standard variable rate home loans is that they may include many features which if used correctly can help pay off your mortgage more quickly, however, you need to proper advice to determine whether this or a cheaper loan more be suitable (e.g. a basic home loan or a pro pack home loan). These features generally include mortgage offset account, redraw facility, etc. Some lenders will also offer discounts packaged with one year introductory rates (refer the pro pack section).
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