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With new products being introduced by Lenders every day, the Home Loan industry is a complicated and forever changing environment.
At Vanda Finance we can compare a number of different home loan products from the lenders on our panel and establish which ones best suit you and your needs.
One of our Finance Specialist would welcome the opportunity to assist you assess your options.
Description: A Basic Variable Home Loan is a Variable Home Loan (typically moves with the RBA Cash Rate changes). This type of home loan does not normally offer the additional features that a standard variable home loan does which enables the lender to offer a slightly lower interest rate.
Pros:
Cons:
Who they suit: Basic Variable Home Loans can be ideal for first home buyers due to the lower interest rates.
Description: The Standard Variable Home Loan like the Basic Variable Home Loan however offers greater flexibility with additional features at a slightly higher interest rate. They are also the most popular Home Loan type in Australia.
Pros:
Cons:
Who they suit: The Standard Variable Home Loan is suitable for most people from home buyer/s to those refinancing and especially those seeking the additional flexibility offered.
Description: A Fixed Rate home loan as the term suggests is a home loan whereby the interest rate has been locked in for a set period of time which is usually 1 to 5 years. At the end of the term you have the option of locking in the interest rate for another term or switching to a variable home loan. Pros:
Cons:
Who they suit: Fixed Rate Home Loans are suitable for anyone who prefers to know exactly what their repayments will be or worry about rising interest rates.
Description: A Split Rate Home Loan is a loan that has the best of both worlds and has one portion of the loan fixed, while the other portion is variable. You have the ability to specify how much you allocate to each.
Pros:
Cons:
Who they suit: Split Rate Home Loans are suitable for anyone that worries about rising interest rates and wishes to have the peace of mind of fixing a portion of their home loan, while taking advantage of the additional features of the variable component.
Description: An Interest Only Home Loan is a loan whereby for a set period (usual 1 to 5 years) you are repaying the interest on the principle only and not making any repayments against principle which results in making lower loan repayments. At the end of the Interest Only period you must commence to make Principle and Interest Repayments.
Pros:
Cons:
Who they suit: Interest-Only Home Loans are suitable for Property Renovators, Property Investors and Developers and anyone that is looking at property improvement profiting from adding value to a property within the time frame of the Interest-Only Period.
Description: Line of Credit Home Loans enable you to use the equity in your home to finance other things such as renovations or purchase other assets like shares. You typically need a large deposit and a fair amount of equity in your property to be able to take advantage of it.
Pros:
Cons:
Who they suit: Line’s of Credit are suitable for those thinking about renovating or investing and those that have strong budgeting skills.
Description: Low-doc Home Loan are loans that are specifically designed for those that are self-employed and are unable to disclose their income.
Instead of providing a tax return or financial statements, borrowers can sign a form stating their income.
Pros:
Cons:
Who they suit: Low-doc Home Loans are suitable for those that are self-employed and unable to disclose their income.
Description: Introductory Home Loans or Honeymoon rates as they are often called are loans whereby the lender is offering a lower initial interest rate (usually for 12 months) to attract borrowers, The loan then usually becomes a Standard Variable Home Loan at the conclusion of the introductory period.
Pros:
Cons:
Who they suit: First Home Buyers and potentially other home buyers that wish to benefit from a lower interest rate and the ability to reduce their principle quickly.
Description: Non-conforming Home Loans are loans that are offered by lenders who loan money to those that do not meet Banks strict lending criteria such as those with poor credit ratings, older borrowed, casual workers or self employed.
Pros:
Cons:
Who they suit: Anyone that does not meet the Banks strict lending criteria.
We have provided a quick summary of the various types of home loans available on the market today.
Please speak to one of our Finance Specialists who will review the available home loan products against your specific requirements to find the most suitable home loan for you.
Vanda Finance (Credit Representative Number 405785) is a credit representative of Vow Financial Pty Ltd (Australian Credit Licence Number 390261)
Copyright © 2020 Vanda Corporation Pty Ltd - All Rights Reserved.
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