CAN WE HELP YOU WITH YOUR HOME LOAN?

BASIC VARIABLE RATE HOME LOAN

Basic Variable Rate Home Loans as the name suggests are very basic home loans with lower
interest rate but with less features than a standard variable rate home loan. This type of loan
generally has no ongoing monthly fees. As with all variable rate home loans the interest may
be increased or decreased according to the market. Basic variable rate home loans suits
budget conscious customers.

STANDARD VARIABLE RATE HOME LOAN

Standard Variable Rate Home Loans are the most popular type of loan. This type of loans are
linked to the official Reserve Bank rate thus depending on rates going up or down your
repayments will go up and down. Standard Variable rate home loans are flexible and may
include optional features such offset, the freedom to make extra repayments, to redraw funds
or split your loan. This type of loan might allow to incorporate an introductory discounted
rate. Introductory rates are usually effective for the first 12 months of the loan, at which it
then reverts back to the standard variable rate

FIXED RATE HOME LOAN

Fixed Rate loans as the name suggest is a loan with fixed interest rates for a set term. You can
choose anywhere from 6 months to 15 years to have fixed rate home loan. Please note if the
Reserve Bank drops interest rate, fixed rate home loan does not allow the reduction of
repayment amounts. These loans can be combined with variable rate products to provide a
mix of security and flexibility. You can have half of your loan as standard variable loan and
the other half as fixed.

INTRODUCTORY RATE OR HONEYMOON RATE HOME LOAN

Introductory Honeymoon Home Loan offers a low-interest rate usually for the 1st year of the
loan. With this type of loan, you can have your rate as fixed, variable or capped.

Please note with Introductory Honeymoon Home Loan if interest rates rise your rate will not go up, but if interest rates fall that rate will go down, and you will benefit.

The other advantage of this loan is that it offers borrowers a chance to reduce the principal quickly by making extra repayments.

The disadvantage of this loan is once your Introductory or Honeymoon
a period is finished the interest rate usually reverts to the standard variable rate and most banks
charge a slightly higher rate after the introductory period.

RATE LOACK

A Fixed Rate Lock allows customers seeking a guaranteed fixed interest lending rate to
protect against potential interest rate increases that may occur during their settlement period.
This type of loan allows you to put a rate on hold for you for between 60 and 90 days. Some
lenders charge for this feature and others offer Rate Lock for free.

WHAT IS A PROFESSIONAL PACKAGE?

Professional Package
You pay one annual fee where Professional Package home loans bundles together various
products with your lender, including credit cards, personal loans, savings and transaction
accounts.

Professional Package loans offer lending discounts to borrowers based on loan to value ratio
(LVR) and the size of your loan – with discounts generally starting for loans greater than
$150,000 with a number of banks and lenders.

Professional package is available to anyone and not just doctors, lawyers etc

Low Doc Home Loan

If your are self-employed  Low Doc Home Loans provides flexible financing solutions for
you.

Low-docs are designed for people who have income and assets, but are unable to
provide the usual income verification documentation such as financial statements and in some
cases, tax returns ready at the time of home loan application.

A simple BAS statement, self declared income statement or verification from the Accountant may suffice for this type of loan or if a self employed person has not lodged a tax return for whatever reason, and the right opportunity has presented itself to purchase a property, then a low-doc loan may be the
answer.

What is Lenders Mortgage Insurance also referred to as LMI?

When lenders agree to lend a client money, there is a small risk that they won't get the money
back if the client is not able to meet the minimum repayments. Lenders' mortgage insurance
protects the lender in the unfortunate event of you defaulting on your home loan. Although
the lender has the house as security, if property values decline that security may not be
enough to cover the outstanding loan when the lender comes to sell it.

This insurance helps lenders broaden the net of who they are able to lend to by taking some
of the risk out of lending the money and means that more people are likely to get a loan and
the home they want sooner.

What is a Guarantor?

A security guarantee allows another person, generally a family member to use the equity in their home as additional security for a portion of your loan amount. This means you may be able to buy a property sooner, avoid paying the premium for Lenders Mortgage Insurance or a Risk Fee and maximize the amount you can borrow. You can use a guarantor loan to buy a home or invest in residential property.

Self Managed Superannuation Fund Home Loan

If you have a self managed super fund or are considering establishing your own super fund, you are now able to use these arrangements to help you buy a residential or commercial investment property.

Superannuation legislation allows Self Managed Superannuation Funds (SMSF) to borrow to invest in residential or commercial property.

Organising a Self Managed Superannuation Fund Home Loan is quite a complex thus it is recommended that you seek a professionals help in organising this type of loan transaction and hence the reason to employ professionals to do the job, is a must.

Bridging Home Loan

This is a temporary loan which allows a buyer to complete the purchase of a new property before selling their existing property.

This type of loan helps you finance the building of a new home while still living in the old one.

The main advantage of a bridging loan is its quick and you can get the money you need in order to move ahead with the purchase of your new home. But there is also a disadvantage with type of loan. The main of which is usually a lower loan to value ratio or LVR, since Bridging Loans tend to be riskier for the lender. Bridging loans work well where there is plenty of equity available within your lending structure

Non-Conforming Home Loan

This type of loan is designed for borrowers that do not meet ‘standard’ bank criteria and may
include seasonal or contract workers, non-residents, small or no-deposit holders or even those
with a poor credit history. In most cases, due to the decreased credit assessment criteria, non-
conforming loans attract a higher rate of interest.

Line Of Credit / Equity Home Loan

Line of Credit or as some might call it Equity lines works more like a credit card and provides increased flexibility. The lenders assigns you a credit facility limit, secured against your property and when you need cash you draw against that limit. As you pay back the loan (the terms of repayment vary), the money becomes available to you again. Line of Credit (LOC) loans usually attract a slightly higher rate of interest than a loan where the balance is continuously reducing.

The advantage of a line of credit over a regular loan is that you don’t pay principal, only interest is charged on the part of the line of credit that is used, and the borrower can draw on

The line of credit at any time that they choose to. However, the greatest advantage of a Line of Credit is that you always have ready access to money, which makes this type of loan attractive to investors.

What is a credit score?

A credit score is used to help lenders decide whether or not to loan money or provide credit
and on what basis. A score summarises information on a credit application or credit report
into a single number. The score alone is not a determinant of whether or not a credit provider
will give you credit. Credit providers have their own lending criteria and the score is just one
piece of information they take into consideration when assessing your application

There are many different types of scores including application scores and bureau scores.

VedaScore is Veda’s bureau score and is a rank ordering tool. It uses only information on
credit files held by Veda to predict the likelihood that an adverse event will be recorded on
your credit file in the next 12 months. VedaScores are calculated based on information in
your credit file, such as:

• Whether you have an overdue debts on your credit file
• The number of enquiries you’ve made to lenders about credit, over time
• The types of lender’s you’ve applied to
• The type of credit you’ve applied for
• The dollar amount you are applying for
• Public data including court judgements or court writs
• Defaults including how many, whether they are paid and how recent they are.

Each credit provider applies their own criteria and policies when making decisions on giving
credit, which is why some lenders may approve your application while others don’t.