Purchasing Your Home
Do your homework
There is a lot to consider and plenty to research. The first thing you need to do is work out how much you can borrow. This is where our services will really help you. Make sure you have an accurate and detailed budget that takes into account all expenses associated with purchasing a property, including stamp duty, council rates and other fees.
We can help you identify these extra costs.
Consider Options Suited To Your Requirements:
- Think about the different loan options, and how they relate to you and your spending habits.
This includes considering options that would reduce the loan faster, avoiding the expensive costs of long term debt.
- If you’re in trouble, ask for help; we understand how, during the term of your loan, some circumstances are out of your hands, which affect your ability to repay your loan. We can negotiate with your lender on your behalf, to ensure that your best interests are taken into account.
- Be careful who you listen to; your friends and family will offer you advice, but don’t just take their word for it! Make sure their advice is backed with evidence, and don’t hesitate to share their feedback with us.
- Get excited; owning your own home is one of the most exciting and gratifying experiences you will have in your life!
Variable home loans
These home loans are the most common type available. The variable rate loan offers more features and flexibility than the basic or “no frills” loan, so the rate is usually slightly higher. The extra options (for example a redraw facility, the option to split between fixed and variable, extra repayments and portability) should be taken into account when choosing your type of variable loan. Repayments will vary as interest rates fluctuate.
Fixed rate home loans
These home loans are set at a fixed interest rate for a specified period (usually one to five years). The advantage of allowing you to organise your finances and repayments without the risk of rising interest rates is offset by the disadvantage of not benefiting from a drop in rates. At the end of the term all fixed loans automatically revert to the applicable variable rate. At this stage you have the option to lock in another fixed rate for a new term, switch to variable or go for a loan where you split with a percentage fixed and the remainder variable. However these loans may have limited features and lack the flexibility of 100% variable loans. There may be early exit fees and limited ability to make extra payments.
Split home loans
These home loans combine the features of various products and can have the security of a fixed rate loan and the benefits of a variable loan. They can also combine a standard term loan and a line of credit. For example part of the loan can be borrowed at a fixed interest rate with the remainder on a variable rate. These loans can be split into as many products as you want to reflect your personal circumstances.
100% offset accounts
An offset account is a savings account attached to your loan account. Money in this account is offset against the loan amount thereby reducing interest payable. Significant savings are made by reducing compound interest with the use of these accounts.
Other advantages of an offset account include being able to pay off your home loan faster than the repayment schedule demands and being able to redraw money if the need arises.
Equity lines of credit
These loans are a great way to access the equity in your home to use for things like home renovations, investments or other personal purchases. Repayments on a line of credit loan are determined by the interest rate applicable at that time. If you have sufficient equity in your home and your current loan structure doesn’t allow for withdrawing your equity, you will need to make a separate application for a line of credit loan. You have the added advantage of being able to make unlimited deposits/repayments as your repayments are not set. You must check the conditions of these loans as they are sometimes more expensive than standard products.
These loans are offered to provide an all-in-one home loan package. They offer interest rate and fee savings on your home loan, credit card and transaction accounts. Some lenders also waive the annual fees for your credit cards. An annual fee ranging from $120 to $395 is usually applicable on these loans.
Professional packages can also offer amazing flexibility, with some lending institutions willing to waive product switching fees when changing from a variable to a fixed rate or converting a principal and interest type loan to an interest only loan.