Home loans. Frequently asked questions
about home loans in general of the HomeMate Flexible home
loan solutions.
Home Loan FAQ provides answers to common question you may have
about home mortgage finance.
What is a
home loan anyway?
What is
a Flexible Home loan
How is a
home loan repaid?
What
are my obligations under a home loan agreement?
My
home loan application has just been declined! Why is this?
What
types of home loan lenders are there?
What
types of home loans are there?
A home loan is a sum of money advanced at interest
by the lender for the main or dominant purpose of buying or
refinancing a home, against the security of that property, or in
conjunction with other real property as security.
- A home loan agreement
consists of two documents;
- The loan agreement which sets out the amount of
the loan, the term of the loan, establishment fees, charges,
interest rates, obligations of the mortgagor, penalties for
defaulting, terms and conditions of granting the loan. This is
summarised in the Letter of offer provided by the Lender. The
loan agreement is enforceable at law, but without security is of
little value to a lender. So a second document is required to
protect the lender [mortgagee] against default on the part of
the borrower [mortgagor].
- The Mortgage document. This repeats much of
what is in the loan agreement, but contains the pledge of the
property being mortgaged from the borrower to the lender should
the borrower default on the loan. [The word Mortgage is from old
French, roughly translated meaning a pledge [by the borrower, or
mortgagor] onto death. This means that a home loan is a serious
legal document, not be taken lightly. You should always have
your legal adviser explain the loan and mortgage documents to
you so you understand the implications to you. In many
circumstances it is also advisable to seek the advise of your
financial adviser as one can explain the legal implications and
the other the financial implications.
For a free application for
a home loan click here now. and select the home loan that best
suits you and an Australian Mortgage Member will refer you to the
best mortgage option free.
Is this Australia's
best home loan? You be the judge!
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application apply now
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The Flexi-FreeŽ range of home loan solutions
offers you many advantages over traditional finance options,
including:
- Competitive mortgage rates in the prime,
sub-prime lo doc, and nonconforming loans.
- with no ongoing fees and charges
- High LVR's on any mortgage over $50,000,
and up to $2,000,000.
- Flexi-FreeŽ's lower rates and free account
keeping means you can:
- pay less for your home loan every month for
life.
- be able to service a bigger loan
comfortably.
- meet serviceability where you can't on a
bank loan rate.
- buy a better or bigger home.
- become an investor sooner.
- pay your home off sooner.
- Have more money left over every
month.
- Income verification and "no doc"
options.
- You can get a yes from us where your bank
says no due to serviceability guidelines. We have options
where you don't have to prove income at slightly higher than
normal rates.
- Free direct salary crediting.
- This means you can put your salary directly
into your home loan, reducing the interest payable, and
redraw funds as required.
- Build up "rainy day money" and
pay off your home in a fraction of the time it normally
takes using mortgage reduction strategies.
- Free redraws any time.
- Use the "savings" you have
accumulated in your mortgage to make purchases, or pay
unexpected bills, or build wealth by building the deposit
for your first investment property.
- Free Voluntary lump sums payments anytime.
- So you can pay out your home loan fast.
- Be able to redraw any time up to the
reducing credit line.
- Free account splits [up to four splits]
- Free Internet banking
- Free phone banking.
- Free B pay
- Free switching.
- Change from fixed or variable when you
like.
- And yes you can keep your bank account
with your favoured bank. We're only interested in the mortgage!
- No need to change banks, just your
mortgage!!
Is this Australia's
best home loan? You be the judge!
For a free internet
application apply now
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We believe that home ownership is a great concept,
and most people would benefit from a home loan, as it allows one to
buy a home on a small initial payment [deposit] and then pay off the
home loan in a comfortable repayment schedule. This is called
amortising the home loan, or a principle and interest home loan
where part of the principle is repaid with every repayment. This is
the main home loan option favoured in Australia. Home loans can be
repaid weekly, fortnightly or calendar monthly.
The other option is an interest only repayment
schedule where the home loan principle amount borrowed is never
repaid, only the interest is paid. [Variations of this can be the
evergreen line of credit, but more on that later.] Whilst this seems
a poor deal to the borrower, it has crucial advantages.
- The loan repayments are smaller and therefore
more affordable.
- It allows borrowers to do other things with the
money that would go to paying off the principle.
- It allows borrowers to enjoy any capital growth
for a minimum of outlay and repayment. Most investors use this
option, as the only profit in investing in negatively geared
property is difference between the buying price plus entry
costs, and the selling price less exit costs.
- In the last few years home prices in major
population centres near high paying jobs have outstripped the
wages growth of the jobs in these areas, so buying a home is
less affordable than it was in the past in real terms for most
people. So "renting the money" instead of repaying it
may be the only way to get on the home ownership ladder.
- This may be a good option to start off with and
to switch to principle and interest later as incomes rise and
the repayments are more affordable.
- Another option have the principle and interest
home loan and to buy a cheaper home in the outer suburbs and the
pay it off and build equity to move closer to high paying work.
But the reality has been that most of the capital growth and
rises in value have happened in the near suburban areas of major
capital cities, so this may be more costly option in the long
term.
- In the option above an interest only home loan
may allow you to buy the home in the area near work, saving
commuting time and expenses now, and selling and buying expenses
down the track, and maybe yielding better capital growth, if you
could crystal ball such an outcome.
In the end you have to get a roof over your head,
so whether you rent one, rent the money to buy one or amortise the
loan, it has to be affordable enough to make provision for your
other expenses.
Is this Australia's
best home loan? You be the judge!
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application apply now
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The four main obligations under a home loan for
the borrower are:
- To make repayments in a timely manner.
- To maintain the land and improvements [home] in
good order.
- To pay the council rates as and when they fall
due
- To insure the home.
Most people are not aware that failure to do any
of these things puts the borrower in breach and default of the
agreement. These costs need to be factored in when considering a
home loan.
Is this Australia's
best home loan? You be the judge!
For a free internet
application apply now
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If you have applied for a home loan and been
declined, it could be any of several reasons. The lender should
advise you of this but many choose not to. The reasons for decline
can be:
- It could simply be that your application was
poorly presented. We may be able to get it through. Please
apply here and we will see what we can do. Please advise
that you have been declined and by which lender.
- Poor credit history including:
- Defaults and judgments of any party to the
loan
- Lack of job and employment stability or full
time work of any applicant.
- Number of dependents. Many lenders don't like
more than two children, as children rearing is a growing
expense, and possibly because this may impact on a mothers
ability to stay at work. Mums that work and raise a family have
their hands full. When its a large family, family is a full time
job in itself. It is therefore a good idea to buy a home before
you plan a family, even its a modest home and not big enough for
the size of the family planned. If you move and have equity
built into the home, then this will lessen the loan required to
the next home and this will make repayments easier.
We have lenders who may help here.
- The Home [Security] may be outside lenders
guidelines. If this is the case we
may be able to assist, so apply here.
- Should the property value not stack up, you
will usually get a loan offer of a lesser amount.
- Unsatisfactory savings history or deposit, or
insufficient funds to complete the purchase. We may be able to
get over this with another lender, or mortgage insurer.
Is this Australia's
best home loan? You be the judge!
For a free internet
application apply now
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Home loan lenders fall into four groups.
- Banks and Building Societies. The traditional
home loan lenders in Australia.
- Non bank Mortgage providers. A fast growing
sector in the home loan market in Australia. have around 30% of
the market. Many offer better deals than banks, usually with no
ongoing fees and charges.
- Non conforming lenders. Lenders that lend
outside normal bank lending guidelines. This is a rapidly
growing niche in the home loan market in Australia. We have
several home loan mortgage lenders who will assist where banks
say no.
- Lenders of last resort. Private mortgage funds
normally administered by legal practices that specialise in this
form of lending. We occasionally arrange this type of loan, for
business people and developers who want fast decisions [money in
seven days is common] and be in and out of deals frequently. The
higher interest rates are of no concern as they want to be in
and out of the deal in 12 months or less with large profits. Can
roll these home loans over, and even get interest paid in
advance so no repayments required!
Is this Australia's
best home loan? You be the judge!
For a free internet
application apply now
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Australia is the most competitive home loan market
in the World, and has the largest choice of loan products. new ones,
or derivatives of old ones are constantly being touted by lenders.
Examples of options available are
Principle and interest home loan. The jewel
in the crown of Australian lending, and by far the most popular home
loan product for home owners. The loan is amortised [paid back] of
the given period, usually between 10 and 30 years in Australia.
Variable Interest only home loan. In high
cost home areas such as Sydney and Melbourne this option reduces
loan repayments by foregoing principle repayments. This makes the
home loan more affordable and allows the buyer to settle on property
that may otherwise be out of reach.
Fixed Interest only home loan. The
investors favourite home loan, as it allows an investor certainty in
repayments. Also used by people that fear interest rate spikes that
we saw in the late eighties and mid seventies. Usually not as
flexible as the variable loan, and set at a higher interest rate.
Since the mid nineteen nineties those that have elected to have a
fixed interest rate loan have lost big time, as interest rates have
continued to fall or stay flat, with many people locked into loans
that are several percentage points higher than the market rates.
Line of credit. The home loan that is
becoming more popular all the time, mainly due to mortgage reduction
concepts. A line of credit is a flexible variable interest loan
option [the interest varies with market variations on the cost of
the money lent]. The line of credit that allows an unlimited amount
of payments and redraws in any month. It is usual a variable
interest only facility, but there are many variants including:
All in one account. Includes a cheque
book and credit card to better manage your money.
Evergreen. Interest only. The home loan
you never have to pay back as long as to meet your mortgage
obligations.
Principal and interest. This one offers
the safety of repaying the loan and having the surpluses when you
need it. Many people with lines of credit tend to use it to
improve their lifestyle rather than pay out the home loan early,
or as an investment facility.
Interest only then amortising. This home
loan model allows low repayments and the safety of repayment of
the loan.
Cocktail. Any combination of the above in
one loan with separate accounts. Sometimes called 'blends'.
Split home loan. Unlike in the US, and many
other developed nations, Australian's don't enjoy tax deductibility
on mortgage loan interest. The split home loan offers a split
account home loan facility that allows you to convert the existing
home into a tax favoured investment and buy a new home to live in.
Created by Austral Mortgage in the mid 1990's then condemned by the
TAX office. The tax office didn't like investors using the
capitalising of interest on the investment property, and rapidly
paying off of the non tax home loan. The Tax office has lost the
battle after three court losses the tax rulings have gone in favour
of the investors, and lenders who sat on the fence are now
clambering to offer them. It is rumoured that the Tax office will
now approach the Government to have the laws changed, but many
people feel that this is unlikely to happen.
Portfolio. Line of credit that has multiple
accounts [up to ten] Ideal for business people with multiple
investments, who want to run all their home business and investments
in one account to save on fees and charges.
Offset. A home where you have two accounts
[often fees and charges apply to both] a savings account and home
loan account. The interest of the home loan is offset by the savings
in savings account. Be careful. These are touted as 'as good
as' lines of credit but come in complex derivatives.
Delayed. The offset benefit has a time delay.
You lose valuable interest offset benefits.
Partial. The offset only triggers when and if a
certain amount is in your offset account.
100%. The home loan interest is 100% offset
against the money in the saving account.
Links to Home Loan Applications
Mr Mortgage is now taking loan applications on
behalf of Loan Mate. Please apply below
Links to Home Loans for specialty purposes
No Deposit Home Loans
Home Loan Refinance
Low Doc Loans
No Doc Home Loan
Bad Credit Home Loans
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