RESIDENTIAL LOANS
Standard Variable Loan
Standard variable loans are Australia’s most popular type of home loan. The interest rate varies throughout the loan term. These loans generally offer excellent flexibility, low fees and often offer great features such as an offset facility, redraw facility, no limits on additional repayments and in most cases, no early pay-out penalties.
Advantages:
* Flexibility
* Lump-sum payments can be made without incurring a penalty.
* If interest rates fall, your repayments will fall.
* Often offer extra features.
Disadvantages:
* If interest rates rise your repayments will rise.
Basic Variable Loan
Basic variable loans typically offer lower interest rates and fewer features than the standard variable loans. You often have the option to pay for any additional feature required. Interest rates and repayments will vary throughout the loan term.
Advantages:
* Relatively low interest rate.
* Lower repayments.
Disadvantages:
* Many of these loans do not have the same features or flexibility as other variable loans.
Intro Rate “Honeymoon” Loan
An introductory rate loan generally offers a guaranteed low rate for an initial period of time (usually 12 months) after which most will revert to the standard variable rate. The rate can be fixed or variable.
Advantages:
* Usually the lowest rates on the market.
* Some lenders provide offset accounts on these loans.
* Opportunity to reduce the principal quickly during the ‘honeymoon’ period.
Disadvantages:
* Payments will increase after initial introductory/’honeymoon’ period
Fixed Rate Loan
Under a fixed rate loan, the interest rate is fixed for a specified period, usually between one and five years. This loan gives you the certainty of knowing exactly what your monthly repayments will be and peace of mind knowing the repayments won’t rise. However you won’t benefit if rates go down during the fixed term.
Advantages:
* Guaranteed rate, if interest rates rise your repayments won’t.
Disadvantages:
* Reduced flexibility.
* Extra repayments may incur a fee or be limited.
100% Offset Loan Account
A 100% offset loan is very similar to an all-in-one loan. Rather than putting all your salary and other income into your loan, it goes into an offset account that is directly linked to your home loan. Any balance in the offset account is 100% ‘offset’ against your home loan. This reduces the amount of interest you have to repay, making your money work harder for you.
Advantages:
* Can save you substantial amount of interest if used correctly.
* Operates like a normal transaction account and has a chequebook, ATM card, etc. attached.
Disadvantages:
* May have higher monthly fees attached to the account.
* May require a minimum balance in the account
Line of Credit Loan
A line of credit loan provides you with access to the equity in your home or investment properties up to a pre-approved limit. You access the funds as you need to. The interest rate on a line of credit loan is usually a variable rate and repayments are interest only.
Advantages:
* You can use the money when you need it and pay it back when you can.
* Rates are generally lower than a personal loan or credit card.
Disadvantages:
* Unless care is shown it is possible to reduce the equity you have built in your home.
Low-Doc & Credit Impaired Loans
A low documentation (or no documentation) loan is suited to investors or self-employed borrowers who do not meet the ‘standard’ lending criteria. This may include; those with an impaired credit history, those who are unable to provide the required documentation in support of their loan application, or those who wish to borrow more than 100% of the property value.
Advantages:
* Simple income declaration form.
* No tax returns.
* No financial statements.
* Can have features such as redraw, line of credit, variable or fixed rates, principal and interest or interest only.
Disadvantages:
* Generally a higher interest rate.
Construction Loans
If you are building your own home or investment property, a construction loan may be suitable for you. This loan requires a fixed price building contract from a registered builder. These loans are usually interest only for the period of building and then become principal and interest once building is completed. A construction loan allows you to draw money as is required whilst building. Also, with the usual necessary documents required when applying for a loan, construction loans also require a ‘fixed price building contract’ and ‘council approved plans’.
Advantages:
* Competitive variable interest rates.
* Facility to draw money when necessary whilst building.
* Interest only payments during the building period.
* Additional payments can be made.
Disadvantages:
* Requires a fixed price building contract leaving little room for change whilst building.
* Some lenders charge a fee for every time you draw money whilst building.
* Given it is a variable loan; loan repayments will increase if interest rates go up.
Understanding stamp duty and other purchasing costs
As well as the cost of obtaining your home loan, there are fees and charges associated with buying a property. Below is a general guide to property purchasing costs.
We can help you fully understand what applies in your circumstances and estimate costs based on the price of your property.
Stamp duty and transfer fees
- Transfer Duty is the State Government duty charge based on your property purchase price.
- Mortgage Duty is a State Government duty which is payable based on your loan amount. It is generally charged at settlement. This stamp duty doesn’t apply in NT and the ACT. Some exemptions are available in WA if you are refinancing.
- Transfer Fees are charged by some states. Check with your legal representative.
- First Home Owners Grant: are generally given some relief on duty costs. In some cases, you may be eligible for a total duty exemption.
Document transfer and title registration costs
- These are government fees applied to each document that is lodged for registration on the property title. Typically there is one transfer document and one mortgage document that you’ll need to pay for at settlement.
Legal fees
- You’ll have to pay for solicitors or legal representative services such as reviewing the purchase contract and advising you on your mortgage documents. The cost of this service varies widely and it’s best to ask what it is up front.
- There are also extra fees associated with property inspections.
- It is in your interest (but not compulsory) to get a pest or building inspection completed on the property.
- Sometimes property surveys and searches can be required.
- Your legal representative can arrange these or you can arrange them yourself.
Lender’s Mortgage Insurance
- Depending on what your deposit is, you may have to pay Lender’s Mortgage Insurance (LMI).
- This protects the lender if you default on your loan.
- LMI does not cover the borrower.
- Generally, you will be required to pay LMI only if you have a deposit that is less than 20 per cent of the purchase price of the property.
Home loan application fee
- Most application fee covers the approval, set up, valuation and solicitor’s costs of preparing the loan documentation and attending settlement. This depends on the lenders who provide you with the loan.
- Solicitors may incur expenses at settlement, for example, bank cheque fees. You will be responsible for these costs.
Self-Employed
At Finance 4 we understand that being your own boss means your time is at a premium and having up-to-date financials is a constant struggle. Not to mention how cash flow can often be unpredictable. So we’ve simplified the home loan application process for you. Our special range of low doc home loans mean you can still enjoy a great interest rate without endless paperwork. Quite simply, we don’t believe you should pay a higher rate, just because you’re self-employed and can’t provide full financials!
Low Doc (Low Documentation)
Low Doc loans allow you to provide a signed certificate stating your income instead of providing full financials with your application. Consequently, the interest rate can be quite a bit higher than most other home loans. Low Doc loans tend to be used by small business owners or the self-employed.
At Finance 4, we don’t believe you should have to pay a higher interest rate for being self-employed. We understand that being your own boss means your time is at a premium and you may not have up-to-date financials to prove your income and cash flow. With Low Doc loans you’ll enjoy a low rate, low paperwork and a speedier application process. Easy!
Interest Only
When you take out a home loan you can choose to repay either the Principal and Interest (commonly known as P&I), or for up to five years pay the Interest Only (IO).
Lenders offer upto a 10 year interest only option. A very attractive offering if you’re investing in property and wanting to negative gear (we recommend you talk with your accountant before deciding on this option). It also appeals if you need to keep repayments low in the early years.
Fixed Rate
A fixed rate home loan is when you agree to pay an interest rate for a set period of time. The rate will not alter during that time, regardless of interest rate changes in the financial markets.
If you’re keen to know exactly what your minimum repayments will be for a fixed period of time, you’ll be pleased to know that there are home loans for 1, 2, 3, 5, 7 & 10 year fixed rate options. So if you’d prefer a safeguard during fluctuating markets, we recommend you call us to discuss the options.
Non-Conforming
Home Loan for the Credit Impaired
A loan for special or difficult situations
Do you need help with difficult loans and debts? Don’t let debt drown you – contact us
In many cases we can help save you and/or your business from being financially embarrassed or even bankruptcy.
We can help you access the experience to successfully overcome the challenges of a bad credit rating, major unexpected expense, poor financial history, or even if you are just married or separated. When you can not fit bank guidelines and you are over your head in debt – we are keen to help.
If you own real estate, a house, land, commercial building, rural property, this site can assist people in need.
We may be able to help you consolidate your loans and debts – and probably find additional savings by obtaining a lower average interest rate than you are currently paying.
There are many different packages for home loans, investment loans, and commercial loans. Regardless of your situation.
If this reads like your situation then enquire here without cost or obligation:
- Got behind in servicing loans, credit cards and other unplanned debts
- Your Tax Returns are not prepared yet and a bank will not give you a loan.
- Unpaid defaults or judgments or even recently discharged from bankruptcy
- Short term employment history and cannot get a loan
- Divorce/ separation
We aim to help you to obtain quick approvals and settlement to help you get out of a financial mess and have the second chance of getting ahead.
