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FAQs For Home Loans

FAQs For Home Loans In Australia


When you’re looking to obtain a new home, you’re most likely going to be looking for home loans in Australia. Most individuals are unable to fund the purchase of a home with their own private money. Home loans come in many different varieties and terms which you should be aware of before you go out shopping for one.

Fixed and variable interest rates are going to be the first factor that you should be aware of when searching for home loans in Australia. Each mortgage lender is going to ask you whether you want fixed, variable, or a hybrid of the two. Before you can absolutely answer this question, you need to understand what each type of interest entails.

A fixed rate mortgage is where you have the same interest rate over the life of the loan. This means that you have the same mortgage premium due each month and there will be no fluctuations in that price for the entirety of the loan. A variable rate mortgage is when the rate changes, which can be up or down, are affected by factors such as the cash rate set by the Reserve Bank. Hybrid home loans in Australia typically combine both variable and fixed rates. Most will have a fixed introductory period of two to five years and then change to a variable rate after that and this can be determined through an online estimator https://www.loans.com.au/calculators/home-loan.

LMI, also known as Lenders Mortgage Insurance, is a common term you’ll likely see when applying for home loans in Australia. This type of insurance is typically required by any lender who you borrow 80 percent or more of the value of a home from. So, let’s say you are purchasing a home that costs 400,000 dollars and you decide to borrow 320,000 dollars from your lender. The amount you borrowed from the lender is 80 percent of the value, which means you’re lender will likely require you to have LMI so that they can recoup the value of their loan if you ever default on your mortgage payment.

Redraws are another factor you need to understand about home loans in Australia as there are some restrictions placed on this with various types of loans. When you pay extra money on top of your regular mortgage payment, it goes into the redraw balance. At any point during the loan when you need some extra money, you can withdraw the redraw balance. For example, let’s say your regular mortgage premium is 300 dollars. If you were to submit a payment of 400 dollars, you would have 100 dollars available for redraw at any point in the future you desire.

As you can see, there are some key terms you need to be aware of when searching for Home Loans https://www.loans.com.au/ in Australia. Understanding what these are will help you to better determine the type of loan you want to receive. When you get the deal for your home structured right, you can save yourself a lot of financial heartache in the future.

Australian Home Loans

Home Loans in Australia

Advisers, lending companies, and astute businesspeople often impart their financial wisdom onto budding homeowners as an attempt to allay misgivings about homeownership. Those who volunteer their home loan knowledge do so diligently, offering statistics to validate their claims. Home loans in Australia, specifically, have been analyzed with a fine-toothed comb, dispelling the burdens that come with owning a home. Here’s a look at some of the best home loans in Australia:

HSBC Discounted Home Value Loan
Appealing to money-conscious borrowers, with the HSBC Discounted Home Value Loan you can borrow up to 90 percent, no doubt serving as a strong incentive for younger buyers to invest. With no upfront or recurring fees, this home loan calculator is second to none: www.loans.com.au/calculators/home-loan

UBank UHomeLoan
Not requiring a longstanding borrower-lender relationship, the UBank UHomeLoan complements the needs of short-lived borrowers. Consumers can split their loan between fixed and flexible rates, enabling the borrower to capitalize on fluctuations in the market. Included with cost-effective initiatives and budget-friendly interest rates, this home loan in Australia is rich with advantageous qualities.

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Bankwest Complete Fixed Home Loan
First-time home buyers are excellent candidates for this home loan in Australia. Requiring only a 10 percent down payment, borrowers can break into the market with ease. Some key features of this home loan include a partial offset account and 3.88 percent p.a. fixed rate for two years. As a bonus, a Bankwest Mastercard comes included with this package plan.

Newcastle Permanent Discounted Variable Home Loan
Esteemed for its flexible and frugal features, the Newcastle Permanent Discounted Variable Home Loan comes with no upfront or ongoing fees. The 5 percent deposit and free extra payments are the true clinchers. Additional features include a full offset account and low rates.

State Custodians Low Rate Home Loan with Offset
An adequate home loan is only as good as its rates, find it here:www.loans.com.au

The State Custodians Low Rate Home Loan with Offset promises low rates, ensuring borrowers a reasonable monthly mortgage fee. Equipped with a 3.64 percent p.a. variable rate, offset account, and free redraws, those looking for a home loan in Australia should look no further.

RACQ Bank Mortgage Saver Special
Money-savvy initiatives are music to every home buyers ears. The RACQ Bank Mortgage Saver Special happily plays that melody with their cost-effective alternatives. Consumers can borrow an astounding 95 percent of the property’s value, making it undoubtedly beneficial to invest.

Types of Home Loans

Types of Australian Home Loans Options You Could Opt For

Settling on a home loan plan can be a challenge. With the various Australian home loans available in the market, it is not enough to compare prices when selecting a home loan. The mortgage should suit your circumstances. Only then can you make an informed choice on what loan package to pick. The following are some the standard Australian home loans.

Variable Rate Home Loans

Buying variable rate, Australian home loans means your repayments are based on the going market interest rates. It follows, therefore, that your payments will vary throughout the credit period. If the market interest rates go up, be prepared to pay more in that particular period. If the rates go down, you stand to benefit by parting with fewer sums for your repayment.

Fixed Rate Home Loans

As the name suggests, these Australian home loans charge a fixed interest rate for a specified period. This means that your repayment sums remain the same and are not affected by the prevailing market interest rates. Well, it is true that you stand to gain when the market rates increase, the downside is that you miss out on paying less when the market rates drop.

Low-Doc Loans

This category of Australian home loans provides a credit facility with limited or no documentation required from the loan applicant. Before taking up credit from a financial institution, you will be needed to provide income documents. Some individuals are at a disadvantage when it comes to meeting this requirement, especially for the self-employed individuals. The low-doc loans cater for this demographic. The downside of taking up this loan is that you will have to pay higher Home loans at Loans.com.au than standard home loans.
Construction Loans

At times buying or renting a home does not have the same degree of satisfaction as that of owning a home that you designed. This category of the Australian home loans is tailored to address this particular segment of the market. The construction loan package offers an opportunity for a borrower to make gradual withdrawals throughout the building phase. The withdrawals help cater for the costs that arise at every construction stage. Progressive withdrawals offer a higher guarantee of completing your project as opposed to receiving the entire sums up front. If you take up this loan, you pay interest on the funds that you will have used. This means that you start making repayments once your home is completed.

Package Home Loans

This Australian home loan alternative allows you to combine your mortgage with other financial incentives. They include a credit card facility, insurance discounts, and a transaction account. The benefit of this option is the convenience it presents in managing your finances with one particular bank. This convenience is reflected on the fee savings made if you would have purchased the services from other banks.

All the Australian home loans address to particular market concerns. Honours are on you, therefore, to choose that which your interests. Be sure to make an informed decision before committing to any loan package.

Australian Home Loans

Australian Home Loans Are Wildly Popular – Let’s Figure Out Why, And How To Lower Mortgage Agreement Contracts’ Costs

Australia is one of the hottest travel destinations for singles, young couples, and married couples with scores of kids, thanks to the Sydney Opera House and comparable sightseeing landmarks, tens – hundreds – of kilometers of beautiful beaches, and tradition unlike any other around the world. As such, many people who visit Australia actually end up living there, and native Aussies almost always stay in their birth country for their entire lives.

One of the only downfalls about living in Australia is its residents’ lack of aversion to risk, collectively holding one of the highest per capita consumer debt totals around the entire world. Thanks to research conducted by the highly reputable government agency Australian Bureau of Statistics, in 2016 the standard Australian household was subject to a quarter million dollars’ worth of personal debt, meaning the entire country’s debt reaches a total of slightly less than $2,000,000,000,000 – that’s trillions of dollars spread between only 24,130,000-odd people.

Australian Home Loans are one of the biggest sources of consumer debt in the quasi-continent full of kangaroos and aboriginals in the desert plains outside of its coastal regions, with a total of $21,600,000,000 in Australian home loans written in June of 2017, alone. For each Aussie native with an outstanding mortgage, the size of their Australian home loans when they first redeemed them upon securing their homes with the backing of mortgages. The Australian Bureau of Statistics indicates that 56.3% of all debt is in the form of Australian home loans.

Considering the average income of an Aussie household is around $80,000 after taxes are taken out, juxtaposed with the incredulous, ridiculous, truly egregious total of 169,600 dollars’ worth of consumer debt per household, residents of this beautiful country obviously have difficult times paying their loans back. As such, the above sentiment combined with (1) the willingness of financial institutions in the land down under to hand out Australian home loans, and (2) the lack of Australians to purchase residencies with cash because of their insurmountable piles of debt make Australian home loans highly popular.

Now that we’ve established the how’s and why’s of Home Loans at Loans.com.au, let’s figure out how to lower the average of $376,000 mortgages. Keep in mind that these strategies are applicable in every single situation in which one in seeking Australian home loans, regardless of how big, small, expensive, or affordable their prospective new places of living are.

Buy directly from owners, if at all possible. Real estate agents survive from low volumes of high-dollar transactions. This means that they significantly markup the homes they buy from financial institutions in foreclosure auctions, including those bought from private owners who don’t want to deal with the hassles of showing prospective clients around their former home, communicating with them, following up on leads, and everything else associated with getting rid of homes.

Fork over a hefty down payment when initializing your Australian home loan. Another thing you should do is seek out government-assisted loan modification programs, inherently designed to aid consumers in financial trouble.