WHICH LOAN TYPE IS RIGHT FOR ME?

PICKING THE RIGHT PLAN FOR YOUR HOME LOAN NEEDS

With the wide array of features and fees varying from one loan to the next, it might feel daunting to find the right loan for your specific needs. Rest assured in the knowledge that we are here to help find the best home loan option for you. We believe in working closely with our clients to assess which of these loans will best match your individual income, goals,budget and lifestyle. Everyone has their own unique circumstances, and our loans aim to provide the best option for your situation.

FIXED RATE LOAN (PRINCIPAL AND INTEREST)
WHAT ARE THE BENEFITS OF A FIXED RATE LOAN

Our fixed rate loan is designed to offer you certainty and security. A fixed rate loan is priced at a pre-determined interest rate that does not fluctuate for the fixed rate period. Therefore, the borrower will have fixed loan repayments during the fixed term. The time period of these loans can vary, but you can usually 'lock in' your repayments for between one and five years. When the determined time period expires, you have the choice to either switch to a variable rate, or to fix the loan again at the current market rates for another set period of time.

Set your mind at ease in the knowledge that your repayments will not increase during the fixed period

Knowing exactly how much your loan repayments will be during the fixed period will give you an opportunity to carefully manage your household budget

VARIABLE RATE LOAN (PRINCIPAL AND INTEREST)
WHAT ARE THE BENEFITS OF A VARIABLE RATE LOAN?

Our variable rate loan provides flexibility that allows you to react dynamically to your specific life situation. A variable rate loan consists of having a loan in which the interest rate charged on your outstanding balance can fluctuate over time. The rise or fall of the interest rate is based on the official rate set by the Reserve Bank of Australia and funding costs (lenders may make rate changes independently of cash rate changes). Therefore, your repayments will vary depending on the rise or fall of the interest rate. Your regular repayments pay off both the interest and some of the principal. You can also choose a basic variable loan, which offers a discounted interest rate but usually has fewer loan features.

Declining interest rates will reduce the size of your minimum repayments.

The flexibility a variable loan offers allows you to make extra repayments, without restriction, should you choose to do so. Making extra payments can reduce the length and cost of your mortgage.

Some variable loans offer a 100% Offset Facility.

SPLIT RATE LOAN (PRINCIPAL AND INTEREST)
WHAT ARE THE BENEFITS OF A SPLIT RATE LOAN?

Can't choose between the flexibility of a variable rate loan and the security of a fixed rate loan? A split rate loan can offer you the best aspects of both. You can divide split rate loans between fixed and variable interest rates.

Your regular repayments will vary less when interest rates change, making it easier to budget

Enjoy both flexibility and security with a split rate loan

If interest rates fall, your regular repayments on the variable portion will too

You can repay the variable part of the loan quicker if you wish to do so

INTRODUCTORY/HONEYMOON RATE LOAN
WHAT ARE THE BENEFITS OF AN INTRODUCTORY/HONEYMOON LOAN?

Ease yourself into your mortgage with our introductory rate loans. Originally designed for first-home buyers, but now available more widely, our introductory loans offer a discounted interest rate for the first 6 to 36 months, before the rate reverts to the usual variable interest rate.

The lower regular repayments provide you with a serene introduction to life with a mortgage. This allows you to get ahead financially during the first months and gives you the experience of living with a mortgage without overwhelming you initially

GUARANTOR LOAN
WHAT ARE THE BENEFITS OF A GUARANTOR LOAN?

Do you need a helping hand to buy your home? Do family members want to help you in this endeavour? You can get your home faster when a family member guarantees part of your home loan. A Guarantor Loan allows your family to help you purchase a home without them actually providing the cash for a deposit. Your family members can use their own home's equity to provide additional security for a portion of your loan amount. This solution reduces your loan to value ratio and can also save you a significant amount of money by reducing or even avoiding the need to pay Lender's Mortgage Insurance. You get your home faster, with the help of your family. With a Guarantor Loan, the guarantee may be limited to a specific amount, which helps provide certainty and allows the property to be released earlier than guarantees which cover 100% of the loan amount.

By increasing your security through a guarantee from your family, you may be able to reduce of avoid paying Lender's Mortgage Insurance. Lender's Mortgage Insurance is generally payable on loans that exceed 80% of the value of the property

Guarantor loans can help you maximise the amount you can borrow so you can purchase the property you want. A guarantor can request to limit the guarantee to a specific amount

Both the borrower or guarantor can ask us to release the guarantee (subject to approval) when the standard Loan to Value Ratio (LVR) requirements are achieved

INTEREST-ONLY
WHAT ARE THE BENEFITS OF AN INTEREST-ONLY LOAN?

An interest only loan can be the choice for you if you need to free up cash or require larger savings for emergencies or current living expenses. With an interest-only loan, you are required to only repay the interest charged each period, and not on the principal. As a result, your monthly repayments are lower. The interest only period will usually last between one and five years. At the end of the interest-only period, you begin to pay off both interest and principal. These loans are popular with investors who plan to pay off the principal when the property is sold, having achieved capital growth. 

Your regular repayments can be significantly lower during the interest-only period.

If it is not a fixed rate loan, you're given great flexibility. You can choose to make extra repayments on the principal, and often redraw the principal, at your convenience. If you're experiencing a temporarily lower income cycle, the interest only loan can loosen your financial strain.

LINE OF CREDIT
WHAT ARE THE BENEFITS LINE OF CREDIT?

Need flexibility in managing the size and timing of your repayments? A line of credit allows you to access additional funds by drawing on the equity value of your home. After fixing a limit on how much you can borrow, you direct income from all sources into your loan account and then draw down funds as required.

You can consolidate spending and debt management in a single account.

You can use your income to help reduce interest charges and pay off your mortgage quicker.

Provides great flexibility for you to access available funds when needed.

LOW DOC
WHAT ARE THE BENEFITS OF A LOW DOC HOME LOAN?

Are you self-employed or a small business owner? If you have difficulty providing the needed financial documentation or proof of income for our other loan options, the low documentation loan may be for you. This loan requires less documentation or proof of income than most. Due to the larger risk this presents to the lender, the exchange for such a loan is a higher interest rate, or a larger deposit from the borrower. If there is an opportunity for you to provide enough documentation for one of our other loans, it might be in your best interest to do so. However, if this is not possible, a low doc loan may be your best opportunity to borrow money.

Lower requirement for evidence of income.

Unit 16, 23 Addison St, Shellharbour. NSW 2529 PO Box 300, Oak Flats. NSW 2529

M:0413747138
P:0242968888
F:0242968884

loretta@lorettadavison.com.au