To make your home loan journey a smooth sail, in this article we will help you to know eligibility criteria, rates of interest, process, necessary documents, comparison and transfer for lowest rates.
To make your home loan journey a smooth sail, in this article we will help you to know eligibility criteria, rates of interest, process, necessary documents, comparison and transfer for lowest rates.
Choosing the right home loan depends on the purpose for the loan and your short and long term strategy. Then there is a layer of complexity to add, by way of who is borrowing, their character, capacity and collateral. And the final layer is the lender – their risk appetite for the type of loan, the interest rates, features and terms they are willing to offer. Essentially, there are hundreds of different elements in a home loan, so working out which of those elements are important, is best done using a home loan broker who can help ensure you are fully informed to select the right one.
Are you going to live in the property?Is the property going to be an investment?If the property is land, are you holding it for increasing value or building on it later?Just asking these questions can help a home loan broker provide you with options that will suit your immediate, short and long term needs.
A home loan broker like Funding Zone has access to over 40 lenders and 100’s of products, so choosing a home loan is something that takes knowledge, experience and an understanding of what can happen if the wrong home loan is selected.
Of course, your strategy can and will change, but half the battle is knowing how your home loan will be affected if you do change direction. Life can get in the way of strategic decisions and with property market changes, you may need to sell before you originally intended to. Depending on how you structure your home loan, there may be costs if you end the term earlier than expected. You home loan broker will be able to guide you through the changes.
Your home loan broker will be able to provide an insight on repercussions of your selected home loan. If you choose to fix your interest rate, there may be financial costs with breaking the loan. However, knowing that early in your strategy will help you to prepare for the potential costs.“Imagine you regularly received cash bonuses from your employer that you wanted to put towards your mortgage, but the home loan product you selected doesn’t allow extra repayments towards your loan. Choosing the wrong home loan can have greater costs than just what the interest rate is.”
Owner-occupied, Investment, Principal an Interest, Interest only, Variable Interest Rate, Fixed Interest rate, Split (Combination of fixed and variable)
There are many types of home loans and combinations of home loans. Depending on the purpose, some options and features may not be available. For example, recently the major banks are restricting the number of interests only home loans for owner occupied properties. Repayments are lower on interest-only, but home owners are not repaying any of the principal of the home loan.The most common components of home loans are;
In addition to the core components, depending on the type of loan, borrowers may select features such as Offset Package, Line of Credit, Low-Doc, Redraw, Extra Repayments.
Before you buy a property, you’ll need a deposit of between 5% and 10% of the property price. For example, if you want to buy a house that costs $500,000, you’ll need a minimum of $25,000 of your own cash to use as a deposit. There are ways to avoid saving for a deposit and if you’ve got family or a really great friend who own their own property and have equity (amount owed to the bank is lower than the property value), they could cover/guarantee your deposit with their equity.There are also government incentives that may help contribute to your deposit.
In addition to the deposit, you’ll need cash to cover associated purchase costs like stamp duty, conveyancing/legal fees, mortgage insurance. These costs vary from state to state, so a good guide is to put aside a minimum of 5% of the purchase price.
Before going property shopping, you need to know how much you can spend. Funding Zone is able to assess your financial situation and advise you of how much you can borrow on your home loan before you go shopping. Banks and lenders credit criteria vary, but essentially the more deposit, higher income and lower expenses you have, the more you can borrow.
One of the steps to buying your dream home is to secure pre-approved finance. Not only will you feel more comfortable knowing that the bank or lender have approved your home loan, it will enable you to make quick decisions and beat buyer competition.Pre-approval finance is essential for auction conditions because once you buy at auction, the property is yours and if you don’t complete the purchase, you lose your deposit.
The team at Funding Zone assist clients with residential, commercial, business, and SMSF lending. We work with the big four banks and multiple second tier home loan lenders to provide a vast portfolio of products for our clients.We simplify the process for our clients, taking care of all the necessary administration tasks, which includes the paperwork, application process, and the final settlement.Our services are free of charge, as we are remunerated by the lender you choose once the loan reaches settlement.Contact us to discuss your finance requirements.
