Navigating Perth’s residential home loan maze can be difficult at the best of times – with so many options available, how can you really be sure that you’re not going to pay too much for what you borrow? If you pick a loan that doesn’t really fit your situation, you could be paying hundreds per month in repayments more than you need to – and that will have a very real impact on how you live now and in the future. Make no mistake – deciding which home loan to go with is an important financial decision.
That’s why here at First Choice Loans, home loans are our specialty – we can compare over 600 products from more than 30 banks and lenders, so you can be 100% certain you’ll be paired with the best solution for your needs, while paying the lowest interest rates possible.
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We can source affordable rates for anybody, from the FHOG (First Home Owners Grant) assisted first home buyer looking to buy an apartment with a small deposit, through to seniors who need to fund their retirement – with everything in between:
So whether you’re buying your first home, need a bigger house to accommodate your growing family or you just want an upgrade, we make applying for and getting the best home loans easy.
Before you go about taking out a loan, it’s always best to be prepared. Here are a couple of things to take into consideration before you get started:
While there are hundreds of different loans available, they can all be characterized as one of the following:
These loans have an “intro” period of 1 to 2 years whereby the interest rate is lower. Once this period is over, the loan is charged at the standard higher rate. These can be great for first home owners, or anybody looking to save on costs during the first years of home ownership.
A standard variable rate mortgage is possibly the most common home loan that’s taken out in Australia, and is one of the most competitive markets. The interest rate of these loans fluctuate as the lender sees fit to do so, which is often in sync with rising or falling interest rates. These have a number of advantages and features that aren’t easily available with other loan types, but can be difficult to budget for.
Fixed rate mortgages are ideal for those who want to budget with certainty, particularly in times of low interest rates. They aren’t overly flexible or easy to refinance, but if you want to know exactly what your mortgage is going to cost month after month, then a fixed rate loan is what you want.
Interest only mortgages are just like the sound – you only have to pay for the interest on the loan, not the principle. This makes for a much smaller repayment amount each month (which can be appealing to certain types of people, such as investors). Obviously, this isn’t for a traditional home owner.
If you need access to the equity you’ve built into your home, then a home equity loan is a great option. Via either online banking or a chequebook, you’ll be able to access your equity for any number of uses, such as investing, a new car, renovating your home and much more.
Below are a few of the most common loan features you can expect:
Moving house? You can take your original home loan to your new property, thus avoiding fees.
An offset facility is a bank account that’s linked to your loan, the funds therein allowing you to offset interest on your loan. For example, if you have a $200,000 mortgage and a $20,000 offset account linked to it, you’ll only need to pay the interest on $180,000. There are some minor fees associated with this, and offset accounts of varying ranges (100% and downward) can be found.
If you’ve been making extra repayments on your loan and you suddenly need to access to funds, you can “redraw” those extra repayments.
If you’re not able to make your mortgage repayments, whether due to foreseen or unforeseen circumstances, you can request a “repayment holiday”, that is, a period of time where you don’t pay (or pay a reduced sum) for your loan repayments. Some lenders allow you to take a repayment holiday without having made extra repayments in the past, others will have this as a requirement.
If you’re itching to pay down your mortgage as fast as possible, then it’s a good idea to make extra repayments on your loan. Note that some fixed rate loans will have a limit on what you can pay in extra repayments.
As well as the interest that you’ll pay on your loan, there are some other costs that you should be aware of. These are the following:
In most cases yes, though be aware that you would likely have to pay what is known as a “break cost” if you’re switching from a fixed home loan to a variable rate home loan, as your fixed term would not have yet been completed. Switching from a variable to fixed rate loan wouldn’t incur such a cost.
Lenders need to know the current value of your property so they know how much they can responsibly lend you, as well as to know how much the house could be sold for in case you default on the loan.
You’ll need some information on your personal details, such as your full name, driver’s licence or other photo ID, TFN etc, employment info, financial details (how much you earn, how much you spend) as well as of course the details of the property you wish to buy.