Choosing the Right Loan

Getting the right advice is paramount to choosing the loan that will best suit your circumstances. Our role as your mortgage specialist is to provide you with comparison of various loan options from a panel of lenders, and assist you with choosing the right loan for your circumstances. And if you are ready to apply now, feel free to submit your information to us.

Variable Rate Home Loans

The most common forms are:

Basic or no frills loan (a low interest rate, but limited features)
Variable fully featured loan (interest rate is generally higher than the Basic Loan, however it includes more features and flexibility)
Variable Professional Packaged Loan (Fully featured, Discounted to interest rate depending on the amount borrowed. Normally however these have an annual fee)

Repayments will vary as interest rates fluctuate.

Introductory Rate or "Honeymoon" Loan

This loan is attractive as it offers lower interest rates than the standard fixed or variable rates for the initial (honeymoon) period of the loan (i.e. 6 to 12 months) before rolling over to the standard rates. The length of the honeymoon depends on the lender, as too does the rate you pay once the honeymoon is over. This type of loan usually allows flexibility by allowing you to pay extra off the loan. Be aware of any caps on additional payments in the initial period and what your repayments will be after the loan rolls over to the standard rate.

These loans may be appropiate for people who want to minimise their initial repayments (whilst perhaps doing renovations) or wish to make large dent in their loan through extra repayments while benefiting from the lower rate of interest.

Fixed Rate Home Loans

These loans are set at a fixed interest rate for a specified period- usually one to ten years. The advantage of allowing to you to organise your finances and repayments without the risk of rising interest rates is offset by the disadvantage of not benefiting from a drop in rates. At the end of the term fixed loans normally automatically revert to the lenders standard variable rate, or you can elect to have the loan fixed into another fixed term or you can split the loan into part fixed and variable.

These types of loans have limited features and lack the flexibility of the variable loans i.e limited extra repayments and break fees may be charged if the loan is discharged for any reason during prior to the end of the fixed term or partial repayments made during the fixed term

Refinancing

Sturt Home Loans offers a no obligation service, including an annual review, to assess your current home loan against the many other home loan products available. You may find that there other loans that better suit your individual circumstances and save you money via lower interest rates and fees. If you elect to to reinvest these savings into your loan you could potentially cut years off your loan. You do not need to be buying or selling your home to refinance your loan.

Sturt Home Loans can also help you restructure your finances, and discuss ways to consolidate your debts. If you have personal loans, credit cards or car loans etc it may be feasible to combine these debts into one loan, since your home loan interest rate is usually lower.

We could even arrange for your new loant o be with your existing lender potentially saving your more money.

Split Loans

Splitting your home loan marries the flexibility of the variable rate loan with the stability of a fixed rate loan to reduce the impact of any interest rate changes. Split loans are especially popular when interest rates are increasing.

By splitting the loan borrowers can protect themselves against the risk of higher interest rates. If the interest rates increase, the fixed portion remains the same but the variable portion payments will increase. If interest rate decreases the variable portion decreases and so your can repay your loan faster.

The loan can be divided equally or split into different amounts for example, 60% fixed and 40% variable.

Self Employed (lo-doc)

Contractors and the self -employed don’t always have the same financial structure or income patterns as PAYG earners. This means you may need the flexibility and convenience of a lo-doc home loan. The greatest benefit to these types of loans is they provide non-traditional income earners who have an irregular cash flow the opportunity to get into the home loan market, or to take out a loan to upgrade. In this type of loan you self-certify your income for the loan application rather than provide full financial details to the lender. However there are additional documents that have to be provided.

Call us today, and we can help get this process underway.

Building and Construction Loans

If you are building a new home or planning major renovations to your existing home, a construction loan is generally the most appropriate funding option.

The difference between a construction loan and a standard home loan is that instead of a lump sum payment at agreement signoff, the loan is usually drawn in stages . These drawdown payments coincide initial draw down of the land followed by usually five draw downs at different construction stages

With this type of loan you only pay interest on the amount of the loan drawn down until the project is completed. For example if you borrowed $300,000 for the land and house package, but have only drawn down $100,000 to pay for the land you only pay interest on the $100,000 and not the full amount.

Before building starts, you will need to pay a deposit to your builder as well as paying a deposit for the land if you are buying the land. As work progresses you will need to make payments to the builder

Renovating or Extending

Anyone who’s ever renovated a home will tell you while the end result is very rewarding the actual process is is always more stressful and more expensive than anticipated. To prevent costly mistakes and keep things progressing you need to plan your renovations with care and precision.

If the renovations are cosmetic renovations like upgrading your kitchen or bathroom there are a number of options available to accessing extra funds.

If you pay off more than your minimum repayments your current loan and it has a redraw facility you will be able to access the extra repayments for the renovations

The top up feature (if you loan has one one)allows you to extend the credit limit to your existing loan without applying for a new loan.