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Buying a home is a big deal, no matter where you are on the property ladder. Whether on the lookout for your first home, your next home, or an investment property, we can help you find home loan solutions that work for you.
We understand that not everyone fits into the one little box and that no two people are the same. That’s why we have a great range of home loans. Regardless of whether you’re looking for a great interest rate, are self-employed and need a low-doc loan, or have bad credit history and just need a fresh start.
Types of loans available
This loan is the most common amongst borrowers. The interest rate is variable and can move up or down, thereby adjusting your repayments. This loan offers more flexibility than other loans as you can usually make unlimited repayments and redraws without penalty.
Many standard variable interest rate loans also offer a 100% offset account whereby any balance in the offset account is deducted from the outstanding loan prior to calculating the interest payable.
A basic loan is also a variable loan but usually offers less features than standard variable loans.
Generally there is a minimum amount that can be redrawn and there is usually a fee involved. These loans generally don’t include an offset account.
A fixed loan allows you to fix the interest rate for a period of time, generally between one and five years, with some lenders seven, ten and even fifteen years.
After the fixed term, the loan usually reverts to the standard variable rate on offer at that time or you may choose to refix the loan for another term. With fixed loans the interest rate is fixed on the day of settlement unless the rate is locked at application which incurs a fee.
The repayments on a fixed loan do not change during the fixed period and provide customers with certainty about their repayments. The majority of fixed rate loans limit the amount of additional repayments which can be made each year, however some lenders offer fixed rate loans with unlimited repayments and redraws. If you decide to sell your home whilst on a fixed interest rate, a penalty will generally apply unless you replace the security with a new security.
These loans are extremely flexible and are similar to a credit card with a large limit. You can repay as much as you want and redraw as much as you want.
With this loan it is important to budget appropriately so that you repay more than you redraw otherwise you could end up owing the same amount for a long period of time.
With a line of credit some lenders require the borrower to make an ongoing repayment while others allow the interest to be capitalised such that the loan outstanding increases.
Offset Account
With a 100% offset account, the interest charged on the home loan is calculated on the difference between the home loan balance and the balance you have in your offset account, thereby reducing interest and the loan term!
Portability
A portable loan allows you to sell your house and move to a new one without having to discharge your loan and reapply for a new one. This saves application and legal fees. Most lenders, however, insist that the loan amount is the same or less.
Redraw Facility
A redraw facility allows you to make additional repayments on your mortgage, and then have access to the additional repayments. Make sure you understand the conditions attached to the redraw facility as it can include a minimum amount and a fee every time you use it.
Additional Repayments
If you expect to have some extra money from time to time, making additional repayments over and above your regular loan repayments can significantly reduce your balance and the amount of interest you pay.
Weekly/Fortnightly/Monthly Repayments
By making repayments fortnightly or weekly, you effectively make an additional monthly payment per year. This can assist in reducing the term of your loan.
Repayment types
Both the principal and the interest are paid during the term of the loan. These can be either variable or fixed rates. Part of the repayment is used to repay interest while the balance is used to repay the principal of the loan. Repayments are calculated based on repaying the loan within a set period, usually 25 or 30 years.
A loan in which only the interest each month is paid. The loan amount does not decrease as you are only paying the interest and nothing off the principle.
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Your Principal Mortgages broker will meet with you, discuss your options and assist you to select the most appropriate loan. Thereafter your broker will complete the application forms and submit the application to the lender.
Once the application has been lodged the lender may request additional information. Thereafter they will either reject or approve your loan. A conditional approval is subject to a property valuation and any other conditions of the lender. Usually takes 5 days.
Unconditional or formal approval is provided once the property has been valued and all other conditions have been met. This process usually takes 3 days after all the conditions have been met.
Under normal circumstances, it will usually take 5 days until the lender sends a copy of the mortgage documents to either yourself or your conveyancer. Once you receive these documents you will need to sign them and return them to your lender within 5 days.
Once your loan documents have been returned to the lender the lender will certify your file and will then book in settlement. At settlement, you will officially be granted the amount of the loan.