Expert Home Loan Brokers – Residential, Investment, Refinance

Residential properties – free-standing, apartments, duplex, semis, are financed with the same types of loans. The mortgage market includes thousands of products with many variations. The most popular loan is the standard variable or fixed rate loan. The property is used as loan collateral.

The amount you are approved to borrow is based on your credit profile, income, expenses, debts and assets. The LVR – loan-to-value ratio, impacts your rate. Book a home loan health check for your loan options.

An Interest and Principal mortgage, often known as a standard home loan, is the most widely used format for residential property buyers. The monthly repayments pay down both the interest and the principal – the amount borrowed. Both parts of the loan are being reduced as the loan is repaid, and equity is built-up in the property.

Interest rates may be fixed for an initial term, variable, or the loan may be split between fixed and variable rates. Get a home loan check to find out your best option.

This type of loan is used primarily for investment properties and for borrowers with an expectation of higher income over the loan term. The interest-only payment period is usually set at 1-5 years of the mortgage term. As only the interest is being paid, the principal is not being reduced. more total interest may be accrued over the term, and it will take longer to build up equity in the property. This may suit some investor strategies, but most homeowners look to building equity over time.

In general terms, the larger the deposit, the better the interest rate offer. A standard deposit required for a home loan is 20%. This presents a loan-to-value-ratio (LVR) of 80%. Any lower deposit, less than 20%, is seen as riskier by lenders and attracts higher rates and Lender Mortgage Insurance (LMI). Achieving this 20%, while a challenge for many buyers, especially first home buyers, can be worthwhile with better rates offered and avoiding LMI.

Some lenders will approve mortgages to borrowers with a 5-10% deposit, a LVR of 90-95%. Approval is based on meeting specific lender criteria. Higher interest rates would apply, and borrowers will need to take out Lender Mortgage Insurance (LMI). LMI is an additional upfront cost. Approval criteria can include stable employment and income, good credit score and profile, and possibly having someone to guarantee the loan – a guarantor. Ask Jade to check your eligibility.

A popular inclusion with most home loans is an offset account. This is a bank account which is linked to the mortgage. Borrowers use this as their everyday account. Income from wages and other earnings are deposited into this account and expenses paid out. The mortgage payments are directly debited on a monthly basis. The interest on the home loan is calculated based on the offset account balance. Ensuring the balance exceeds the monthly payment can offset the loan and reduce the interest.

Use our calculators to see the difference between the different types of loans, where savings on interest may be realised, and how terms and rates effect how fast a loan is repaid. The calculators estimate repayments based on different loan amounts and rates. Allowing buyers to establish a buying budget. Upfront costs including stamp duty, lender fees and conveyancing should be factored in. They are not included in estimates. For assistance on your most suitable loan, book a home loan check.