A home loan is an amount of money that a person borrows from a bank or money lending company at a particular rate of interest to be paid with the equated monthly installment every month. The money lending company for the home loan will obtain the property which will serve as a security. The property can either be residential or commercial.
A loan can be availed for up to 90% of the property’s market value. The interest rate is low compared to mortgage loan. Once the borrower is not able to pay the dues, the lender will own all legal rights to retrieve the remaining loan amount by sale of property in question.
To know more about home loans, we have listed down the different types of home loans available in Australia:
A loan can be availed for up to 90% of the property’s market value. The interest rate is low compared to mortgage loan. Once the borrower is not able to pay the dues, the lender will own all legal rights to retrieve the remaining loan amount by sale of property in question.
If you are buying a new property, although you are still planning to sell your existing property, you might want to consider a home loan called a bridging loan. Bridging loan is a short-term loan that gives you up to 6 months to sell your existing property, helping you drive this inconvenient moment as you move to your new home.
A fixed-rate loan allows you to secure your current interest rate at the time of payment. It means that the lender is not able make any adjustments to the interest rate, whether be it increased or decreased. You may want to consider to fix a rate for up to 5 years, although the lifetime of the loan itself may be 25 or 30 years, but this would only depend on your situation and needs.
Although some people might like the security of knowing exactly how much their repayments will be, they might lose out on falling interest rates as the market changes.
If you are on a pension or applying for a home loan at an older age, you may be limited in the amount of funds you can borrow, due to a higher risk of being related by lenders when preparing your loan application. The types of home loans available for pensioners can include reverse, mortgages, line of credit home loans and investment loans.