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Major Home Loan Categories/Types
We've provided a break-down of only the major home loan categories/types. Somewhere amongst these major headings your future loans fits.
Standard Variable
A Standard Variable can be classified as 'fully featured' with lots of
flexibility. The flexibility comes from the options like off-set accounts,
redraw, and the ability to make extra repayments. A standard variable means
that the interest rate will fluctuate with the market; therefore your rate can
increase or decrease.
Fixed Rate
A Fixed Rate has less flexibility, such as no redraw and there are normally
limits on extra repayments. Your interest rate is locked for the agreed period;
if interest rates do decrease your repayments will remain the same. There may
be extra costs to remain on a fixed rate once the original period has ended.
Honeymoon or 6-12 Month Discount
This is a discounted rate for a period of time (normally 6-12 months).
Interest rate for the period is very low, but once period is up it will return
to a standard variable rate.
Line of Credit
Line of Credit can be considered as a big 'credit card'. This works on
the same principals of a credit card, you pay for what you have used, and still
make a monthly repayment. It can be 'maxed' out, paid back, and 'maxed' out
again. The repayments are interest only.
A Line of Credit works well for investors who need access to cash quickly,
investors who renovate and then sell, self employed people or business owners.
Be aware that if you make minimum repayments, you will only pay off the
interest. If you cannot make extra repayments you can quite literately end up
owing the original loan amount (at the end of loan period).
Construction Loan
This is generally a standard variable product, but you have the option to
revert to another product after the construction is completed (normally at a
cost). Portions of the loan will be funded/released at every interval of the
construction. This will happen approximately 4-5 times (i.e. laying of the
foundation, erection of walls, etc). At the end of construction there will be
final inspection to check completed construction.
Low Document
Low Document loans are normally for self-employed or business owners
who do not have their tax returns and can not prove their income. This type of
loan normally only requires a letter from the accountant and a signed
declaration.
Still confused? Our job at Lending Hand Finance is to assist you in finding a loan to suit your situation and lifestyle.
Contact Lending Hand Finance on 1300 850 545 or
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Speak to Lending Hand Finance about your individual needs and clarification on
any home loan product(s).
Contact us on 1300 850 545 or
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