Home and Investment Loans
Buying your first home is one of (if not) the biggest financial commitments you will ever make. Stay well informed of what is involved so you don't make any rash decisions.
The right advice can save thousands of dollars off your loan and help you own your home sooner! Whether you need a home or investment loan, we have access to a range lenders who can offer competitive quotes and products to meet your needs.
There are some factors that everybody should consider when purchasing a property.
Can you afford to buy a house?
A credit provider must ensure you can afford to repay a loan without suffering undue financial hardship before lending you any money. The total amount that you can borrow is determined by three factors:
- The value of the property you intend to purchase; and
- The funds you use towards the purchase; and
- Your borrowing capacity or "serviceability". Serviceability is your ability to meet loan repayments, and will depend on your income and existing financial commitments. You will need to provide evidence of a continuous stable income.
You Must Have a Budget!
Budgeting your income carefully and understanding your spending habits will help you make regular loan repayments and own your home that much sooner!
Tips to Pay Off Your Home Loan Faster
- Select a home loan that meets your needs. While the rate is important, it is more important to have an appropriate level of flexibility and function.
- Pay off as much as you can, as often as you can.
- Avoid loans that penalise you for making extra repayments.
- Avoid 'honeymoon' loans that revert to a higher rate after the 'honeymoon' period is over.
- Avoid loans with high exit costs.
- Deal with reputable organisations.
Fixed or Variable Interest?
This really depends on your current financial situation. Our team can help you select a loan suited to your needs.
There are advantages and disadvantages of choosing fixed and variable interest loans, and they are assessed on a per client basis.
We can help you select either a:
- Fixed interest loan;
- Variable interest loan; or a
- Split loan comprising of part-fixed/part-variable interest.
Remember however, that if you elect to split your loan into part fixed/part variable, make sure you don't incur two monthly loan maintenance fees instead of one.
There are many costs associated with taking out a home loan, which don't relate to the price of the property.
These Hidden Costs Include:
- Lenders' fees, including loan application and establishment fees;
- Government charges including stamp duty on property purchase and mortgage, and title fees;
- Legal expenses; and
- Inspection costs.
And can cost you thousands!
Lender's Mortgage Insurance
If you can't repay your loan, the lender repossesses your house and sells it to repay the loan. If the sale of your house doesn't cover what you've borrowed and an amount is still owed, lenders mortgage insurance will cover the gap. Lender's mortgage insurance covers the lender, not you!
If you need to borrow more than 80 percent of the total value of your property, most lenders will require you to pay Lender's mortgage insurance. It is usually charged as a one-off premium payment. The higher the percentage borrowed, the higher the Lender's mortgage insurance premium will be.
Home and Contents Insurance
Home and contents insurance protects you from loss or damage to your home or possessions. The cost of insuring your home depends on many things, including the structure, the location and the existing security (security doors, alarm etc).
Home insurance covers the building only - not the land. Contents insurance covers your possessions listed in the policy.
If you have a mortgage on a property, building insurance is compulsory. Contents insurance is not compulsory, although it is generally a good idea and should be reviewed each year as you purchase new contents for your home.
Refinancing Home and Investment Loans
As your life progresses your situation changes rapidly and your requirements for home and investment loans can alter dramatically. Similarly, don't assume that just because your loan was once competitive, it still is. Interest rates change and different types of loans are always entering the market. We can review your current loans to ensure you still have the right product/s for your needs. We will:
- Assess your current interest rate;
- Assess your repayment level; and
- Assess your financial situation to determine whether a better deal can be sourced, saving your money and helping you pay off your loan faster.
Ridell Pty Ltd (ACN 062 778 670) ATF DHR Trust & T&V Pty Ltd (ACN 603 440 768) ATF OP Trust ABN 88 355 151 729 T/A Ridgway Financial Services is a Credit Representative (475874) of Finconnect. Finconnect (Australia) Pty Ltd, ABN 45 122 896 477 Australian Credit Licence 385888, a wholly owned subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Level 3E, Commonwealth Bank Place, 11 Harbour Street, Sydney NSW 2000. P: 1300 665 676, F: 1300 457 703, E: firstname.lastname@example.org www.finconnect.com.au
Lending services are authorised by Finconnect (Australia) Pty Ltd ABN 45 122 896 477 Australian Credit Licence No. 385888 a wholly owned subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.