Talk to a Home Loan Specialist

Making an appointment to meet with a Home Loan Specialist could save you hours of stress when buying your first home.

A Home Loan Specialist will talk to you about your income, your budget, your plans for the future and any other loans you may have. They will provide an indication of how much you can borrow, and the right loan for your income, budget and circumstances. 

Remember, it is important to do your homework before you even start looking for your first home – you need to know exactly how much of a deposit and loan you can afford, and be aware of all the costs involved in taking out your home loan.

Realestate.com.au and Domain.com.au list properties for rent and sale around Australia.

Questions to ask your lender

When you talk to different lenders, make sure to have a list of questions on hand, including a question or two about pre-approval. 

Some questions you should ask:

• What percentage of the property value can I borrow?
• How much can I borrow?
• Will I ahve to take out lender's mortgage insurance? If so, how much will it cost?
• What types of home loans are available?
• Which home loan will suit my needs and lifestyle? Why?
• Which home loan offers the best variable/fixed interest rate?
• What up-front fees can I expect?
• Can I make extra repayments/deposits?
• What other features does the home loan offer (i.e. credit card, redraw facility, ATM etc)
• Are there free redraws?
• Do you allow me to defer repayments?
• Will the lender give pre-approval of my home loan with no upfront fees?
• How long will it take to process my application?

What loans are on offer?

In this section, we'll give you an overview of the different types of loans available. A home loan specialist can help you figure out what loans would best suit your needs.

Introductory or Honeymoon home loan

An Introductory or Honeymoon loan offers a low interest rate for the first few years of the loan. Sometimes, the rate can be fixed or capped - which means if interest rates rise, your rate will not go up above the agreed ‘cap’, but if rates dip then your rate goes down as well. Once the introductory period ends the interest rate on your home loan will normally revert to the standard variable rate.

Some advantages of an introductory rate are:,the borrower will have extra cash flow during the introductory period to use on such things as:

• furnishing their new house; or
• making extra repayments off their loan which will reduce their principal and the overall life of their loan.

Low Doc home loan

Low doc loans are specifically designed for self-employed people who cannot substantiate their income using the conventional documents required by most lenders. Many low doc home loans give borrowers the option to switch to a conventional variable rate loan after a set time and upon provision of up-to-date finances.

Home loan comparison rate

Comparison rates help potential home buyers work out the true cost of any loan. These rates include both the interest rate and loan’s fees and charges. For instance, if a lender’s advertised rate is 7.7 per cent, once the fees and charges are included its comparison rate may be 8.75 per cent. Comparison rates are calculated using a formula specified by law based on set amount, loan term and frequency of repayments. When a lender advertises an interest rate for a regulated loan, they must include the comparison rate in their advertisement.

Basic home loan

Basic Home Loans generally offer a lower interest rate but with less features than a standard loan. The interest may change as official rates are changed, but it usually has restrictions such as fees on extra payments and withdrawals. This is more suitable for first home buyers who don’t need all the features of a more expensive loan.

Fixed rate home loan

A fixed rate home Loan gives you the certainty of a fixed interest rate, which means your loan repayments won’t change while the interest rate is fixed – normally from terms up to 10 years. Fixed rate loans usually do not allow higher repayments or withdrawals and if you discharge the loan before the end of the fixed rate period you will incur break costs which can be substantial. Once the fixed rate period is finished the interest rate usually reverts to a variable rate. Ideal for investors or those expecting rates to increase in the short to medium term.

All-In-One home loan

The all-in-one loan is essentially a transaction account and a home loan combined. It allows you to pay your salary or other income into the account and withdraw your money as you need it. The benefit is that your savings are decreasing the principal and the interest charged by sitting in your home loan account, as opposed to earning taxable interest in a savings or transaction account. The interest rate on an All-In-One loan is usually higher and may include monthly fees. Ask your home loan specialist to look at what you could save with this loan which suits income earners and the self-employed who are well into the life of their loan.

Line of Credit / Equity home loan

A line of credit works like an overdraft account secured against your property. The biggest advantage of a line of credit is ready access to money at a relatively low interest rate compared to an overdraft or credit card. Equity home loans are best suited to disciplined borrowers or the self-employed with equity in their homes.

Split loan

Concerned about interest rates, but dislike the inflexibility of a fixed rate loan? Then you can try a part variable, part /fixed combination, which gives the advantage of features like accelerated repayments, redraw and mortgage offset on the variable portion, without exposing your entire loan to interest rate movements. Some lenders also allow other splits, such as a basic or a line of credit.

Low Doc home loan

Low doc loans are specifically designed for self-employed people who cannot substantiate their income using the conventional documents required by most lenders. Many low doc home loans give borrowers the option to switch to a conventional variable rate loan after a set time and upon provision of up-to-date finances.

Home Loan Comparison Rate

Comparison rates help potential home buyers work out the true cost of any loan. These rates include both the interest rate and loan’s fees and charges. For instance, if a lender’s advertised rate is 7.7%p.a., once the fees and charges are included its comparison rate may be 8.75 % p.a.

Comparison rates are calculated using a formula specified by law based on set amount, loan term and frequency of repayments. When a lender advertises an interest rate for a regulated loan, they must include the comparison rate in their advertisement.