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Home Loans
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First Home
Buyer Loans
First home
buyers have become a very attractive market niche to banks and
other lending institutions, especially as the property market
tightens and first home buyers are entitled to $7000 First Home
Owners Grant.
Some lenders (eg
Westpac) offer first home buyers loans of up to 100% of house price.
However to take this great deal you will either need to have a
guarantee from your parents or take out mortgage insurance.
Low Doc Loans
As indicated by
the name they require less documentation than standard loans up
you can pay a premium of up to 1% on your interest rate for this
privilege. Though many lenders reduce this premium each year
that your met your repayments.
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Low Doc Loans
are aimed at people that have problem with their credit history
or alternatively have a problem establishing their credit
history because they can’t produce all the documentation (eg
group certificates) because they are self employed.
An extra 1% can
mean you pay tens of thousands of dollars more interest over the
term of a typical home loan. Visit the home loan calculator
to test this.
Fixed Rate and Variable Rate Loans
A fixed rate
loan enables you to lock into the current interest rates for a
specified term. Alternately the interest rate in a variable
rate loan fluctuations with the market. A combined account
means you can have part of your loan fixed and part variable.
Investment Loan
Investment
loans are needed when you purchase a house you are not going to
live in. Typically the interest rate is .5 to1% above
residential loans. However you do have the benefit that the
interest and any loan coast will generally be tax deductible if
you are receiving rental income from the property
Mortgage
Brokers
Mortgage
brokers don’t actually lend you money, they match you up with
lenders for a fee. Typically this fee is paid by the lender.
Construction Loans
These are aimed
at people building their own home and they are structured like a
line of credit. As the building progresses the home become more
valuable and you can draw down more of you loan.
Home loan check
In an order to
win your business many places are offering a free home loan
check. Basically this mean that they will assess what you are
currently paying and compare it with what you would be paying
with them. The biggest caution here is to factor in the costs –
both financial and other – of moving from lender to the next.
Reverse mortgage
A reverse
mortgage is aimed at retirees endeavouring to access the equity
in their homes. They can borrow money against their home and
not have to repay it until they die or move out. To my mind
reverse mortgages are great deals for banks. Primarily because
they have a 100% secured asset and they get a premium of up to
1% on the interest rate. It would also be wise to investigate
the impact on any Centrelink payments you receive.
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