 |
 |
|
 |
With so many home loan providers now, and a huge range of home loans available, it can be a difficult task identifying the best loan for your circumstances. Competition in the lending market from banks, Australian and international, building societies, credit unions and a variety of other specialist lenders presents home loan products including honeymoon rates, introductory rates, standard variable rates, basic variable rates, fixed rates, capped rates, lines of credit, equity loans, construction loans, redraw facilities, professional packages.
And if you are a first home buyer, the dream of home ownership, and getting the best loan must seem to get harder as you look further into it!
At Mortgage Exchange we will work with you, and ensure that you are not wandering around in a cloud or fog, unsure of what is next. It is our role to both educate, and assist you in the process of home ownership, so that your decisions are made from a position of confidence, and not fear.
The key factors for most people today are as follows; - primarily the lenders stability and professional reputation, exit and early repayment fees by the lender, loan flexibility, products offered by that lender, low ongoing rate, minimal fees and charges, such as setup and ongoing fees, broker recommendation, accessibility of a branch, low deposit option (of less than 10%), and low introductory rate. (2007 & 2009 Mortgage Trends Reports - Genworth Financial).
The options mentioned above are not exhaustive, and there may be other factors important to you. It is vital that you discuss these with your broker, so that he or she will help you identify and best loan for your needs. Once that is done, it is then a matter of applying for the loan with your broker.
Applying for and getting a home loan
Now that you are ready to apply for a loan, it is important to work out how much deposit you will need, how to apply for a home loan (and the necessary documentation you will need), and getting it approved (what is involved in the process).
In addition we explain the credit process and credit profiles, valuations and importantly costs associated with your purchase and the home loan.
Refinancing
We recommend that you review your mortgage every twelve to eighteen months, or when your personal circumstances change, such as a new addition to the family. We undertake loan health checks as a free service, and all that you need to provide us with are your loan details, and income and expenditure details.
Importantly, when looking at refinancing, it is important to look at the change over costs, and the reason you wish to refinance.
Ongoing management of your mortgage
When it comes to your home loan, it is important to realise that it is one of the largest debts you will ever take on in your life. It is important that you treat it as such, and take an active role in managing your mortgage. There are a number of ways in which you can save significent amounts of money on your mortgage over its life time, and there are some great tips which anyone can follow to save thousands in interest and reduce it by years.
Further information and downloads
We have a number of prepared checklists to help with both the process of buying your dream home or investment property, through to application and settlement checklists.
Listed below is a summary of the most common type of mortgages. Mortgage Exchange will gladly guide you in the right direction and assist you in choosing the correct product for your short-term and long-term requirements.
Talk to Mortgage Exchange and we can tailor a solution to your specific needs. It is as easy as a telephone call to one of our experienced loans officers on 1800 775 555.
The interest rate in this type of loan is fixed at settlement. This gives you the security of knowing that you are protected against an interest rate rise for a set period of time, should the variable rate increase. However, you take the chance of also being locked into a higher interest rate should the variable rate decrease.
The advantage of a fixed loan is that it can allow you to lock into set monthly repayments, which allows you to budget accordingly; however, a fixed loan may often have less flexibility and features than a variable rate loan e.g. restrictions on additional payments.
A variable loan is the most common type of loan and consists of either a standard variable or a basic variable. A standard variable generally offers features such as the ability to access redraw facilities, the ability to pay out the loan early, options to make additional payments etc. A basic variable loan will often have a slightly lower interest rate but may have less flexibility. These loans are often favoured by first home buyers as they provide a cheaper repayment which may offset the lack of features and flexibility.
A split loan provides you with the option of locking in interest rates on part of your loan whilst still allowing for flexibility by keeping part of the loan on a variable rate. A split loan will still offer flexibility plus added features. The fixed portion allows you the peace of mind of fixed repayments and the variable portion allows the flexibility of making additional payments and redraw facilities.
Honeymoon rates may be attractive but are only limited to between 6 and 12 months after which time the lender will lock you into a variable rate for a specific number of years. Honeymoon rates are not as cheap as they may appear once the true rate of the loan is calculated. They have been designed to assist with the first difficult year of facing mortgage repayments. Do not over commit yourself and ensure you are capable of making payments after the honeymoon period is over.
All-in-one loans involve utilising one working account. All of your income is deposited into your loan account and then all of your withdrawals occur from this account. The longer the period of time your funds remain in the account, the greater the interest savings on your loan. This type of loan can also reduce your account keeping fees as you will be using only one account. It is important to fully assess the features of an all-in-one loan to make sure that this is the right type of loan for you.
100% offset loans require the establishment of a secondary working account. The dollar amount in your secondary linked account is offset against your loan account therefore reducing the total loan amount that you are paying interest on.
Today's home loans let you do more than simply buy a home. Condiser a line of credit loan for example. Also known as a revolving line of credit, these loans have become popular due to their flexibility and features.
A line of credit home loan is a credit facility secured with a first mortgage on a residential property. Similar to a credit card, they allow you to withdraw funds up to a set limit at any time. Repayments can be made in full or on a monthly basis.
This type of loan can be used to purchase most types of property, from the family home to an investment property. As long as you make the minimum monthly repayments, you can use the line of credit to carry out renovations, invest in shares or pay the bills.
While these loans give borrowers considerable freedom, they are not for everyone.
Like any credit card account, line of credit loans require financial discipline an good budgeting skills to stay within your financial limits.
However, if you are careful with your money and want the flexibility a line of credit offers, this type of loan may suit you.
Low doc loans are designed to help self employed borrowers who may have difficulty providing the necessary documentation required to obtain a loan e.g. most recent tax returns. If you think you fall into this category talk to Mortgage Exchange and we can assist you in obtaining the right loan product for your current situation.
Non-conforming loans are available through some lenders to help borrowers who do not meet standard financial lending criteria including those who have a poor credit history.
Interest only loans are most commonly used for investment properties. They allow you to pay the interest portion of the loan without making any payments towards the principal of the loan. The benefits of an interest only loan include lower monthly repayments and potentially maximised taxation benefits on investment properties.
If you would like additional information, please call one of our experienced loans officers on 1800 775 555 to see whether this type of loan is suitable to your needs.