Our Products
-> Standard
Variable Loan
-> Fixed
Rate Loan
-> Lines
of Credit
-> Offset
Loans
-> Lo
Doc or No Doc Loans
-> Construction
Loans
Standard Variable Loan
This is the most common type of
home loan. It will normally be set up over a twenty
five or thirty year period requiring a monthly payment
that will payout (amortise) the loan over the time frame
specified. The monthly payment is set to allow for the
payment of the monthly interest cost plus a small amount
of the principal debt. The interest rate for this loan
is ‘variable’ meaning in changes in response to shifts
in the official cash rate set by the reserve Bank of
Australia or changes in the cost of raising money that
the lender or bank is currently facing. This allows
for the loan re-payment to go up or down but still amortise
the loan over the standard time.
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Fixed Rate Loan
The fixed rate loan allows a client
to agree with the lender to fix the interest rate that
applies to their loan for a limited time (usually 1,
3 or 5 years). This means the monthly payment will be
constant despite any rate changes for other borrowers.
This loan style is useful for people on a tight income
who cannot deal with payment variations. It is also
a good option in a rising interest rate environment
to be able to fix some or part of a loan and avoid paying
higher interest costs. In a falling rate environment,
this type of loan can leave a client paying more than
the average market price for loan; so it should be used
carefully and with a view to the broader market movements.
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Lines of Credit
A Line of Credit loan is a fully
flexible loan that normally allows clients to make maximum
payments onto a loan and make easy flexible withdrawals
from the same loan. It is an ideal structure for rapid
mortgage reduction. This loan gives a client a general
limit to their loan and allows them to deposit or withdraw
funds as they choose as long as they operate below their
limit. It allows much greater flexibility for the borrower
but needs to be structured carefully to ensure clients
get the maximum benefit from this type of loan.
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Offset Loans
An “Offset” loan establishes a
link between a client’s savings or transaction account
and their mortgage and allows the interest charges in
the mortgage account to be ‘offset’ by the interest
earned in the savings account. This type of loan allows
some value to the borrower from their saved funds. The
earnings from the offset account reduce the cost and
term of their mortgage. These loans vary according to
how much interest can be offset and how the offset is
calculated. So the value of this loan can vary according
to the income and savings position of the borrower.
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Lo Doc or No Doc loans.
Some borrowers cannot fully demonstrate
all of the income they have available for servicing
purposes. This is normally due to delays in completing
tax returns for small business operators or because
some elements of their income are not ‘allowable’ for
credit assessment purposes. So Lo Doc and No Doc loans
can be approved based solely on the client making a
declaration about their own ability to service the loan.
These loans will typically have a slightly higher interest
rate and also a lower level of loan as a percentage
of the home or security value (LVR). The credit standard
on this type of loan is very high. Borrowers need to
have clear credit history without defaults and also
be able to show proper conduct of loans, without missed
or late payments.
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Construction Loans
Borrowers who are building a home
normally use a construction loan. This loan allows progress
payments to be made to the builder during the construction
so the loan increases up to the full limit by the time
the building is complete. It means clients are only
charged interest on the amount of the loan that has
been used rather than paying a full interest charge
on money that has not been used for payments to a builder.
At the completion of construction, this loan will revert
to some other loan type for the duration of its term.
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We have access to over 700 loan products from Basic
Home Loans to Professional Packages.
Once
you have chosen which loan to go with, your assigned
and dedicated mortgage broker will then assist you through
the whole loan application to loan approval and settlement
process, plus, your broker will continue to be there
for you in the future when you need further finance,
property and loan related advice or assistance.
Contact us today for a free
consultation.
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