Seek expert financial help – Introducing Mortgage Navigators
Making a big financial decision requires proper preparation and planning, and Mortgage Navigators is the finance broker guide you need for success. Founded by George Massouridis in 1998, Mortgage Navigators has helped thousands of Sydney-siders with mortgage finance and this service is available to Property Navigators clients too. As George says, “the right home needs the right loan”!
Mortgage Navigators will research and carefully compare finance options from banks and lenders across the market to save you time, effort and money, Get a great home loan deal and get your finance approved FAST, with our Mortgage Navigators finance broker service.
Mortgage Navigators can help guide you through various finance solutions to meet your needs. They offer no obligation, free consultations. You can Contact Mortgage Navigators or call them directly on 1300 134 898.
Types of Home Loans
There are many mortgage options available for you to fund your investing in property. The first thing you need, is to know what’s available so you can pick the type of loan that suits you best. Whether you are a investor, first time borrower or homeowner, there is one that fits your needs.
Standard Variable Loan
This must be one of the most popular and typical type of home loan in the country. The loan has standard variable rate, which is dependent on the movement of the official cash rate set by Reserve Bank of Australia.
Advantages: flexible, repayments go down when interest rates fall, most lenders allow extra repayments and access to line of credit facilities.
Disadvantages: repayments go up when interest rates rise.
Basic Variable Loan
This type of loan generally offers a lower interest rate than the standard variable loan. However, it also offers lesser features and you need to pay for any additional features that you require.
Advantages: lower interest rate and lower repayments.
Disadvantages: lesser features and flexibility.
Honeymoon Loan
If you want lower initial repayments for your loan, the honeymoon loan gives a discount usually on the first year. The lender usually offers a guaranteed low rate for such period, which can be fixed or variable. Once you’re done on the ‘honeymoon’ period, the loan will revert to the standard variable rate.
Advantages: generally offers the lowest rates, lower repayments during the ‘honeymoon’ period.
Disadvantages: you will be transferred to higher variable rate after the ‘honeymoon’ period.
Fixed Rate Loan
Borrowers who don’t want to be exposed to interest rate changes and want to know exactly how much they are going to pay usually go for fixed rate loans. This type of loan allows you to have your interest rate fixed at a specified period, such as one or five years.
Advantages: your repayments won’t vary, even if interest rate rises.
Disadvantages: making additional repayments may mean having to pay penalty fees, you can’t take advantage if interest rates fall.
Line of Credit Loan
This type of loan allows you to access the equity in your home or other properties you own up to a certain limit, which is pre-approved. Most of the time, a line of credit loan’s interest rate is set to a variable rate and you pay repayments that are interest only.
Advantages: interest rates are usually lower than a regular personal loan or credit card, flexibility of using the money when you need it and paying it when you can.
Disadvantages: if not carefully handled, the equity in your home can be reduced.
Low-Doc and Credit Impaired Loan
If you are worried that you don’t meet the requirements of the lender, you can always apply for a low-doc or credit-impaired loan. This type of loan is perfect for people who have impaired credit history, self-employed, and those who wish to borrow more than 100% of the value of the property.
Advantages: simple documentation requirements, can have different features like variable or fixed rate options, line of credit, redraw, etc.
Disadvantages: usually have higher interest rate.
Construction Loan
A construction loan allows you to draw amounts, as you need it. With other home loans, you will get the loan amount as a lump sum, which means you will also need to start paying interest for the entire amount. With a construction loan, you will only get the money you need for each building stage. It starts with interest only repayments and when the building is complete, the repayments become principal and interest.
Advantages: interest savings, draw money when you need it, additional payments can be made, pay interest only during the construction period.
Disadvantages: it is a variable loan which means repayments go up when interest rate rises, requires a fixed price before construction (not flexible).
Mortgage Navigators can help guide you through various finance solutions to meet your needs. They offer no obligation, free consultations. You can Contact Mortgage Navigators or call them directly on 1300 134 898.