Unlike many lenders, Resi has NO redraw fees on loans with a redraw facility. And better yet, there is no minimum redraw amount. And for even easier access, most Resi loans also come with the option of a FREE ‘direct card’, allowing you to redraw up to $1,000 per day at ATMs or via EFTPOS across Australia (fees and charges may apply). What’s more, every borrower linked to the loan is entitled to one direct card each.
When you’re deciding how much to borrow it’s important to factor in a rate rise of at least 2 per cent so that you aren’t caught short if interest rates increase. Do your own sums and make sure you can afford to live reasonably well and still pay off your home loan. If you borrow too much and your budget is too tight, you may find that eventually it will be too hard to stick to it and you risk defaulting on your loan.
Account statements, pay slips, tax returns, credit card balances are the sort of thing you’ll need for applying for a standard loan. Proof of income requirements will vary according to whether you are a wage earner (normally recent payslips or Group Certificates) or self-employed (normally two years’ tax returns). For personal identification, such things as driver’s licences, rates notices, birth certificates, passports are all acceptable.
There is a growing trend towards friends buying property together or parents going guarantor for their children. However problems can arise and it is vital that anyone choosing this path gets independent legal advice, considers the future ramifications, and puts everything on a proper business footing. Parents wanting to go guarantor for their children may also consider limiting the amount of the loan they guarantee or making a financial gift instead.
You may have heard about telemarketing firms cold-calling home buyers offering to save them large amounts of money on their mortgages. Remember the old adage: if it sounds too good to be true, it probably is! The same kinds of benefits often promoted by these ‘mortgage reduction schemes’ can normally be gained from a loan like the Resi Complete Home Loan with facilities for salary crediting, redraw and more importantly no big upfront ‘scheme’ fees.
If you decide to fix your home loan, you should be focussed on achieving certainty in terms of your monthly loan repayment rather than hoping to gain from future interest rate movements.
This type of certainty can be important if you have a limited income or are an investor. For someone who wants to combine ‘certainty’ and ‘flexibility’, a split loan may be a good option. This allows you to fix part of your loan and keep part of it at a variable rate.
This is a loan ‘nasty’ that you definitely want to avoid. Loan churning normally involves a mortgage broker or lender refinancing your loan so that they can get an extra commission – sometimes with no real benefit for the borrower concerned. Don’t be talked into refinancing your loan unless there are clear financial benefits involved. And make sure these benefits significantly outweigh any costs involved.
The Federal Government First Home Owner Grant (FHOG) of $7,000 is definitely worth applying for if you’re buying a home for the first time. However it is only available to first home buyers and that is strictly defined. You must also be buying the home to live in, rather than as an investment property. To find out more details about the First Home Owner Grant contact the Office of State Revenue in your State.
When you apply for a loan your credit record is normally checked. It can be a good idea to check out whether there are any ‘black marks’ against your credit record before you put in your application. Go to http://www.mycreditfile.com.au to find out how you can get a free copy of your personal credit record. In some cases you may be able to clear any ‘black marks’ up, particularly if they are errors.
It is worthwhile getting loan pre-approval BEFORE you go searching for your new home.
This means that your finances are approved, subject to your choice of property and its valuation.
Loan pre-approval avoids the situation of falling in love with a home which you later find out is beyond your means. You will also need pre-approval if you intend to bid at an auction, together with a deposit or deposit bond.
The size of your home deposit normally determines whether you will have to pay lenders’ mortgage insurance or not. If you have a 20% deposit or more you normally won’t have to pay mortgage insurance. It’s also important to remember that mortgage insurance protects the lender, not the borrower. If a borrower wants to safeguard themselves, they can take out mortgage protection insurance separately.