“Competition among lenders for a home loan remains steep but borrowers may still be missing out on great deals and important information that could save them thousands of dollars.” (afgonline.com.au)
“Most lenders will pitch one or two loan products to customers. But that’s a tiny fraction of the number of loans available in Australia. If you want to get a grasp of the wide variety of products out there, consider a mortgage broker. A mortgage broker works for you, not the lender, and can help you tap this vast vein and find the loan that is best suited to your needs. Talk to your broker about your financial circumstances and goals so they have as much information as possible to determine the best product solution for you.” (afgonline.com.au)
You can set up a line of credit to help fund your investment property
“If you are negative gearing an investment property, you will have a shortfall between your costs and rental earnings. You can fund this gap with a line of credit (LOC) product using equity in your home or another property.” (afgonline.com.au)
“This strategy works providing there is capital growth in your investment property over the same period, otherwise you are eating into your capital gain. You also need to have fiscal discipline and not dip into the LOC for non-investment related expenses, such as holidays. While lenders will be able to set this structure up quite easily, they are not likely to offer it up front as part of your investment loan. Talk to your broker and financial advisor about whether this strategy is a smart option for you.” (afgonline.com.au)
People with poor credit ratings can still get home loans
“While it’s true a poor financial record will probably make it harder for you to land a loan, the doors may not be closed. Lending criteria has tightened in the wake of the global financial crisis but there are still plenty of loans up for grabs for those with a blemished track record or little financial backing. Be prepared, however, to pay a higher interest rate than the standard offering. A broker will be able to help you find loans with less stringent criteria, often labelled non-conforming loans, and will help negotiate with the lender on your behalf. You should also do a budget to ensure you are able to make any repayments, lest you end up adding to your woes.” (afgonline.com.au)
There are ways to avoid lender’s mortgage insurance if you don’t have a 20 percent deposit
“Lender’s Mortgage Insurance (LMI) is a one-off payment by the borrower when a loan exceeds 80 percent of the property’s value. It covers the lender’s risk if the borrower defaults, but does not cover any loss by the borrower. LMI can be a painful hit to the hip pocket, often running to several thousands of dollars, especially after a home buyer has scraped together the minimum deposit. One alternative to paying LMI if you have less than a 20 percent deposit is to secure a guarantor to cover the extra stretch.” (afgonline.com.au)
“The advantage of securing additional funding through a guarantor is that it simply gets tacked onto your loan so you can repay it over time, rather than forking out up front for LMI. The key before you make any big decision about home finance, is to have all the facts at your fingertips. Your broker will be able to compare the products and options that are out there and size up which arrangement will work for you and your circumstances.” (afgonline.com.au)
Let us help you!
With interest rates at their lowest levels in decades, it pays to check whether your current home loan is still right for you. It’s a time consuming task that many people put off, even though they may have the potential to save significant amounts of money.
At Option, our primary concern is how much money we can save you. That means we work extremely hard to make sure we find your best loan option, we also check your current home loan and let you know whether you could save by switching. If you do decide to switch, we’ll do all the legwork for you to make it as easy as possible.
The cost of this consultation is 100% covered by us. Why? Because your future is important to us.
Every client we serve, we want to go above and beyond for. We want to make sure your financial future is secure – and if we do that well, you’ll be able to get your next property sooner.
How it works?
At Option Home Loans, we will meet you at a time and place that suits you. As soon as you contact us or book an appointment, one of our lending specialists will be into touch.
Make your life changing decision and contact us today!
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References:
https://www.afgonline.com.au/learn/home/home-loan-industry-insights/