Australian Home Loans

Owner Occupied Loans

As its name suggests, this loan can be used to finance your home purchase. Owner-occupied home loans differ from other financing options, such as investment property loans, because you are the end-user. You are not going to rent or resell the house. Instead, you are going to live in the house.

The loan is an excellent financing option if you are a first home buyer. You can enjoy your home while paying the loan in instalments.

Owner-occupier home loans often have lower interest rates on average compared to other sorts of loans, like investment home loans, since they’re used for a property that will likely be your main residence for years to come, making you more likely to hang onto it. 

Preapproval

A home loan pre-approval puts you in a position to act fast when you find the home of your dreams. It also helps you set a ceiling price for your purchase, which can save you time on your property search and protect you from spending more than you can afford.

Speak to us to find out:

• How much can you borrow
• How much you require for a deposit
• How much you can repay each month
• If you qualify for a government grant or concession.

How long does pre-approval take?

Turn-around times for pre-approvals vary for each lender from the time of application submission. We will confirm the expected time frame for your preferred lender. Providing us with the correct documentation up-front will help achieve a speedy turnaround. Once approved it will be valid for 3-6 months depending on the lender.

Get in touch with us to arrange your pre-approval today.

First Home Buyers

Buying your first home is an exciting time! As your broker, I am here to help you every step of the way. Did you know that the Australian Government has two new initiatives that support first home buyers? These are the First Home Loan Deposit Scheme (FHLDS) and the First Home Super Saver (FHSS) scheme.

First Home Loan Deposit Scheme (FHLDS)

What is it? FHLDS helps first home buyers purchase a home sooner by providing a guarantee allowing those on low and middle incomes to buy a house with as little as 5% deposit (lender’s criteria apply).

Who is eligible? Singles and couples that meet the following key checks: an income test, a prior property owner test, a minimum age test, a deposit requirement, and an owner-occupier requirement. Get in touch with us so we can check if you meet the criteria.

First Home Super Saver (FHSS) Scheme

What is it? FHSS allows you to make voluntary before-tax and after-tax contributions into your super fund to save for your first home. Eligible candidates can then access these contributions and associated earnings to buy their first home. As of July 2019, there have been changes to the scheme, including only applying to buy your first home in Australia, compared to the previous version that applies to any location. 

Who is eligible? First home buyers who live in the premises they are buying or intend to live there as soon as practicable; and who intend to live in the property for at least six months within the first 12 months they own it. The buyer also must have never owned a property in Australia and have not previously requested a FHSS release authority.

Get in touch today to learn more about these schemes and explore opportunities suitable for you. We can provide details on how each scheme works, the ins and outs, and the pros and cons that apply to your current situation.

Contact us today to check your eligibility.

Refinance

While you’ve probably heard of refinancing before (and may well have done so already, given a large portion of home lending every month is for the purpose of refinancing), ‘refinancing home loans’ generally aren’t a product. Lenders might advertise home loans to attract customers looking to refinance, but many home loans will generally be available for people refinancing or purchasing a house.  

So don’t get confused when you can’t find any ‘refinancing home loans’ – they’re just regular home loans you can refinance to, whether that’s with another lender or the one you’re with now. By refinancing your home loan to a new loan with a lower interest rate or better features, you could save yourself thousands of dollars over the course of your loan period.

Despite the interest rate increases, there’s still strong competition amongst lenders for your business.

If you’ve been with the same lender for a while, now is a good time to review your mortgage and make sure it’s still right for you.

Refinancing may help you to:

• Secure a lower interest rate
• Pay less fees
• Free up equity for an investment property or another asset
• Consolidate your debt
• Add interest-saving features to your mortgage (an offset account or redraw facility, for example).

We can run through your finances and take a good look at your mortgage to see whether it still works for you. If you could be getting a more suitable home loan elsewhere, we’ll let you know.

To explore your options, get in touch today.

Investment Loans

An investment home loan is a home loan for people looking to buy a property for investment purposes, which typically involves renting it out and profiting through a rise in the property’s value. They tend to have higher interest rates and stricter eligibility criteria than owner-occupier loans since investors are usually considered riskier borrowers than those buying a property to live in.

There can be tax benefits to taking out an investment home loan, as the Australian Taxation Office (ATO) states interest payments (among other things) can be claimed as a tax deduction (but you should seek your own taxation advice). 

Relocation / Bridging

If you already own a home, with its own ongoing mortgage repayments, a bridging loan could be something you consider when purchasing a new property while you’re still in the process of selling your existing property. A bridging loan is a special type of short-term loan that can cover the purchase price of another home during such a scenario. It’s a financial “bridge” for homeowners trying to traverse the gap between buying and selling.

However, this type of home loan comes with its own risks and costs that may not be suitable for everyone. Bridging loans typically are interest-only home loans that have short loan terms, usually 12 months, and the loan amount will be calculated against the equity of your current property. They also have special conditions attached that generally involve interest rates and whether the current property can be sold within a certain timeframe. It’s important to read all important documents when considering taking on such a loan.

Debt Consolidation

Debt consolidation involves bringing your existing debts together into one new loan. The objective is to reduce the number of individual payments you make and reduce the interest rate you are paying on your more expensive debts.

This may be something to consider if you are:

• Managing multiple debt repayments and struggling to keep track of what is due and when.
• Getting into a credit trap where all your spare income is used to pay interest, but you don’t have enough left over to reduce your debt balances.
• You’re paying a very high interest rate on your debts—perhaps you have credit card or cash advance debts, or store credit purchases.

There are several possible strategies to consolidate debts, which can include:

• Moving debts to a new credit facility (e.g. a personal loan or mortgage) with a lower rate of interest, or lower fees.
• Lengthening the term of existing loans (e.g. taking a mortgage debt back out to the 30-year loan term).
• Changing the repayment terms on an existing loan to interest only, or
• A combination of these strategies.

Usually a debt consolidation strategy is implemented to make it easier for you to pay back your debts. However, in some instances, the objective of a debt consolidation may be to improve your cash-flow.

If you implement a debt consolidation strategy, it’s important to understand that it doesn’t reduce your debts—it just makes your repayments more manageable. A debt consolidation strategy should be implemented in combination with a change to your spending behaviour, so you can work to reduce your overall debt level over time. This should include creating a budget to ensure the debt consolidation measures work effectively and using a budgeting tool such as our budget planner can help.

What’s good about a debt consolidation

Simplicity: One loan repayment is a lot easier to manage and more convenient than juggling several different repayments.

Savings on interest and fees: Debt consolidation could potentially reduce the amount of interest you pay on high-interest facilities like credit cards and save you money on fees for multiple credit facilities. This may make it easier to pay back your debts.

Potential cash savings: This is potentially the biggest benefit of debt consolidation. By consolidating your debt into a loan charging a lower interest rate, you have the potential to save interest on monthly repayments and reduce your overall interest.

Lower repayments: Reducing the interest rate and spreading out repayments over time could potentially reduce the monthly repayment amount due.

Stress relief: Specialist lenders are available that may lend to you if you have missed repayments on your current debts, or if you have a poor credit history.

Things to consider:

Concentration of risk: Consolidating all your debt into your mortgage means that you have a lot at stake if interest rates rise. We recommend that you take advantage of all available cash to make additional repayments to pay off the refinanced debt as quickly as possible, or to start a savings account to build up a safety net.

Using up equity: Consolidating debts into your mortgage can also mean you are using up equity gained through paying down the balance or through an increase in value of the property. This means your returns will be reduced when you sell. Furthermore, consolidating your debts into your home loan can increase your loan-to- value ratio (LVR) above 80 percent. If this occurs, you will be required to pay Lenders Mortgages Insurance (or LMI). LMI can be expensive, so this may affect the savings you receive from refinancing your home loan to consolidate your debts.

To explore your options, get in touch today.

Low Doc

A low doc home loan is a low documentation home loan, available to self employed applicants that don’t have the correct proof of income documents available, such as: 

• Income details: copies of most recent payslips, pay summaries, rental income statements and dividends etc. 

Low-doc home loans often have higher interest rates and fees to compensate for their more generous lending restrictions, and they aren’t offered by as many mainstream lenders as owner-occupier or investment loans are.

Low doc loans are more for those who have good credit history and are not wanting to borrow in excess of the 80% of the property value.

Impaired Credit / Non-Confirming Loans

Impaired Credit / Non-Conforming Loans are for people who due to circumstances have a poor credit history.

While these loans are good news for those who don’t qualify for other options, it’s important to note that non-conforming loans usually have higher interest rates than their more-standard loans.

Guarantor / Family Equity Loans

A guarantor home loan isn’t actually a specific product either. There are home loans that allow the use of a guarantor, who is someone (usually a close family member like a parent) who agrees to provide additional security to the bank because at this time you don’t do not have sufficient funds for the minimum deposit amount. They do come with additional risks and we did take a cautious approach to guarantor home loans because of the opportunity for a family member to lose an asset not a result of anything they have done but as a result of something you haven’t done in repaying your loan.

Construction Loans

A construction home loan is a home loan you take out when you are either building a new home or you are doing a major renovation. Unlike a regular home loan, construction loans cover expenses as they occur during the construction process, something that’s called progressive draw-down. These payments usually occur in a five to six-stage process, which are often the following:

Stage	Includes
Deposit	Paying the builder to begin construction
Base	Concrete slab complete or footings
Frame	House frame complete and approve
Lockup	Windows/doors, roofing, brickwork, insulation
Fixing	Plaster, kitchen cupboards, appliances, bathroom, toilet, laundry fittings/tiling etc.
Completion	Fencing, site clean-up, final payment to builder

If one of these stages (such as the base) costs $100,000, then you only pay the loan’s interest rate on that $100,000. The rest comes later. Most lenders charge slightly higher interest rates for construction loans. 

If you are interested in a loan not mentioned above, contact us to see if we can assist in your situation.