Types of home loans :
There are different types of home loans offered by banks and other finance companies. For first time buyer home loans client can select suitable types of home loans according to their loan requirements and eligibility criterion. Right selection of home loan structure can benefit the clients in many ways. The finance group is helping clients to select the right types of home loan with professional advice for long.
Full doc home loans:
full doc home loans are certain types of home loans for self-employed or PAYG employees supported by full documentation to proof their income. For PAYG employees income need to be demonestrated by 1-3 most recent computer generated pay slips showing employers ABN and YTD income figures on the pay slips. Client may also need to provide recent year PAYG summary to proof income ( pay slips are not showing YTD income, regular overtime, income from previous job where current job is commenced for short time). For self-employed applicants client need to provide recent 2 years full financials including accountant prepared profit & loss, balance sheet, cash flow and tax returns for business and individuals.
Low doc home loans:
Low doc home loans are certain types home loans offered for mainly self-employed applicants who do not have their recent 2 years full financials up to date to proof their income. Bank accept recent 12 months BAS's and 6 months trading account statements as proof of income if business is registered for 12-24 months or client is in the similar industry for minimum of 2 years. Low doc home loans through banks available up to 80% of property value where lender mortgage insurance is required for loan exceeding 60%-70% LVR. We can offer up to 90% LVR low doc home loans through private banks.
No Doc home loans:
No doc home loans only available through private banks up to 85% of property value for eligible self-employed client. Client need to registered for ABN minimum of 12 months. No doc home loans are certain types of home loans required self-declared income supported by accountant letter to proof the income of the applicant. No BAS's, no financials or no trading account statements are required for this types of home loans
Bad credit home loans:
Bad credit home loans are certain types of home loans mainly offered by private banks and lenders. Banks usually accept minor paid defaults up to $1000 depending on the strength of the application. For non bank private loans different degree of defaults, bankruptcy issues are considered case by case basis.
Split home loans:
Split home loans are certain types home loans allow the client to split their total amount of home loan into 2-4 portion. Splitting the home loans allow the client to activate different facilities in each separate splits. Client can structure loan for to get best benefits using split home loans. Client can have one split with fixed rate, one split with variable rate or line of credit facility.
Fixed rate home loans:
Fixed rate home loans are certain types of home loans offered by banks to fixed the interest rate of the home loan for specific period of time. Introductory rates can be fixed for first 6 months to 12 months of the loan term. Fixed rate home loan offers are available to fixed the interest rate of the home loans up to 10 years time. Interest rate is higher for longer term fixed rate home loans. Client can fixed any portion of their home loans from 1-10 year of the 30 years loan term. The benefit of fixed rate home loans are interest rate remain same for fixed rate term, client can make same amount of payment every month during this period, client can save money on interest if they can select portion of fixed rate home loan. Usually there is no offset facility available with fixed rate home loan where client will have to have separate split with variable rate home loan to have obtain 100% offset facility.
Variable rate home loans:
Variable rate home loans are certain types of home loan where interest rate can change any time without prior notice to the client. Bank usually review their interest rate every month and disclose to the client what is their current variable rate. Bank adjust their variable rate with cash rate of reserve bank that is reviewed every first Tuesday of a month. Clients monthly repayment for mortgage change according to current variable rate of the bank. Client can have variable rate home loan for a specific portion of their total home loan using split home loan option. Client can also link their variable rate home loan account to a 100% offset facility account to offset the interest payment for any amount amount of saving they have on their offset account.
Offset home loans:
Bank offer 100% offset facility with variable rate home loans. Using offset facility home loans client can save money on interest if they have savings on offset account. The amount of saving client will have on their offset account at the end of the month, that amount will offset the principle amount of the loan. As a result if principle amount is offseted by savings, client does not need to pay interest on that amount.
Interest only home loans;
Interest only home loans are certain types of home loans allow the client to make interest only repayment for up 10 years term of the total 30 years term home loan. Interest only home loan give client flexibility to reduce their monthly commitment for the interest only term usually 1-10 years. End of interest only period client need to make repayment for principle and interest. In this way clients monthly repayment increase significantly at the end of interest only period. But client will have options to refinance their property to avoid the problem
Line of Credit home loans:
Line of credit home loans are certain types of home loans allow the client to make payment on principle amount and reuse the fund whenever it is required by the client. Line of credit facility usually work like a credit card facility where client have a limit of the facility. Client can make interest only repayment every month for the amount of principle they use. Client also can use over their limit with higher interest rate repayment. Bank offer 75%-90% of the loan amount as line of credit facility. client can have a combination of other facility using home split home loan option. Interest rate for line of credit home loan is variable.
Redraw home loans:
Redraw home loans are certain type home loans facility with fixed rate and variable rate home loans where client can make extra repayment on home loan account and redraw the amount whenever it is required. There is a maximum limit extra repayment facility available with fixed rate home loans usually $10k a year, where it is unlimited for variable rate home loans. Bank charge a fees sometime to redraw fund from extra repayment made on home loan account. Redraw is only available from the amount of extra repayment made by the client. Extra repayments do not reduce principle amount of the home loan loan and do not reduce monthly repayment of the home loan.