5 Most Essentials Things For Acquiring Right Home Loan
The Australian Bureau of Statistics has confirmed that the nation has the highest level of home-ownership on the entire planet. But obtaining a property on Australian soil will not be that simple unless you get yourself a home loan. Home loans are one of the best ways you can get a property of your choice with no issues. But these days, home loans are not like signing up for 25-years and then make regular loan payments. It’s because the lending industry has become pretty complicated and competitive. For such reasons, you need to make the right decision when you opt for a home loan.
Type of Home Available
There are numerous home loans from which you can choose the one that matches your needs. But for loans like the self managed super fund or SMSF, you need to take the assistance of an SMSF home loan expert because it’s controlled by the members of the super fund. Given below are some of the most popular kinds of home loans that are provided in Australia. Check below!
- Home loan package: Home loan packages come with a 1.2% of interest rate discount. These loans are much cheaper than basic home loans. Normal package home contains no annual fee credit card and a free transaction account. But the high package fee is up to $400 per year.
- Standard home loans: The standard home loans provides much more flexibility than the basic home loans. You can redraw extra money, which you have paid in and get to divide the loan into a variable and fixed loan. On certain occasions, the standard loans deliver a 100% offset account. Otherwise, you can look for a loan that comes with a cheaper interest rate and carries the same features.
- Basic home loans: The basic home loans carry no-frills and have a lower interest rate. Many of the basic loans are now offering redraw facilities but might come with fees and restrictions. This means the basic home loan will not be the type of loan you need if you are looking for extra repayments and wish to access them later on.
Things You Must Consider When Acquiring Home Loan
Just like finding the perfect home can be pretty challenging. Getting yourself the right home loan is pretty daunting as well. To make sure that you do not experience any issues, there are several things you need to consider before you opt for a home loan. Look below!
See to it That You Have Enough Cash for Deposit:
Before you start looking for a home loan, you need to assess the security, financial standing, and savings. You must also keep a check of your credit rating as its compulsory. The next thing you need to do is check whether or not, you have money to pay 20% of the property’s value. The majority of the lenders in Australia will allow you to borrow around 80% of the property value. So, you need to source out the remaining 20% from your savings. For instance, if the home’s value is $500,000 you can request the lender to provide you $400,000, and the rest you need to manage yourself.
- Choose the interest rate type:
The type of interest rate that will match your requirements is something you must put under your consideration below applying for a home loan. If you want to take the risk of paying lower interest rates, you can opt for the variate rate. The variate interest rate depends on the monetary policy of the RBA (Reserve Bank of Australia). Another interest rate is the fixed-rate one, and it’s ideal for budget-conscious first-time home buyers. This type of interest rate is fixed for only a period of around 1 to 2-years. The last interest rate is the split-interest, which you divide into two parts. There is no limit on how you will divide your loan as it depends on you.
- The type of home loan features you need:
If you want to be a wise borrower, then you need to look beyond the interest rate. It’s because the interest rate is not the only feature, which can break or make a mortgage deal. Before you apply for the loan, you need to check the available features. Once you check the features, you can easily make the transactions with your lender. The most useful feature you need to look for is the power to make extra payments without providing any additional cost. When you make extra payments, you can settle your loans pretty quickly and cut down the overall interest rate. With this feature, you can save thousands of dollars.
- Take the help of experts:
For all first-time home buyers, finding the right home loan can be complicated. For such reasons, you need home loan advice from home loan experts. The experts will provide you information, tips, and recommendations on home loans. They will also help you choose the right home that will match your needs, wants, and budget. The home loan experts are experienced and highly-qualified. They have skills and knowledge and know what you need in a home loan. All you need to do is state your requirements, and they will help you find the right loan.
- Home loan interest and fees:
You need to make sure that you do not fall foul when it comes to home loan fees. There are many home loans, which comes with an application fee. This particular fee can reach up to $1000. But the real sting is the ongoing service fee where you have to pay around tens and thousands of dollars. So, unless you are utilizing all the home loan features, it will be better to opt for a home loan that has fewer features and no ongoing fees. You will find many home loans only that comes with low application fees. So, be sure to compare them before you make the final call.
Last words to share!
Home loans are the ultimate way to get yourself the home of your dreams. Make sure to conduct good research and check the internet. You can also take the guidance of the brokers before you choose a home loan.