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Loans and Financing Secrets

Hello, my name is Tony and this is my blog which is all about borrowing money and paying it back. If you are looking to borrow money, you will want to make sure that you get the best possible deal. When I first borrowed some money to buy a car, I didn't know what I was doing and I ended up paying back the loan with a high-level of interest. Thankfully, my uncle gave me some really good advice as he is a man who knows how the world of money works. I decided to start this blog to offer advice and help to others.

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Top Tips When Taking A Home Loan

Many Australians take mortgages to buy or build their dream homes. Banks and mortgage companies will readily give a mortgage to people with a good credit history. However, choosing the wrong loan could lead to serious financial troubles. So how do you choose a home loan? Below are some useful tips. 

Hire a Mortgage Broker

Some people would want to go straight to the bank to avoid mortgage broker fees. However, you will save more when you hire the broker. The broker will handle the mortgage application process, thus allowing you to manage your day-to-day business. Further, he or she will negotiate interest rates with your mortgage provider and customise the loan repayment plan to suit your needs. For instance, you could have a holiday period where you do not make any repayments for a month or two.

Examine The Various Products

Check what the various lenders have to offer. Other than the interest rates, beware of extra charges such as insurance, loan application and processing fees. Besides, check the terms and conditions of the mortgage. Consider the following:

How long will the lender take to process the loan? Typically, the home loan should be available before the closing date indicated on the contract of sale. Otherwise, you may lose your earnest money.

Most lenders will require you to take home insurance. Check if there are any stipulations. 

When should you make repayments? Are there any penalties if you default a repayment?

What would happen if you are unable to repay the home loan? For instance, will the bank allow you to sell the property?

Inquire whether you need the bank's consent to renovate the property.

Will you incur a penalty if you make an early repayment?

Types Of Home Loans

Below are some home loans you should consider: 

Bridging finance home loans are ideal for people who need a mortgage before selling their old homes. The bank allows you to sell your old home before commencing mortgage repayments on the new house.

An interest-only loan gives you a grace period where you will only repay the loan interest. It is perfect for people that would want to flip the property or those that need some cash to renovate the house.

In a shared equity home loan, the bank gives you a low-interest rate in exchange for equity. As such, the bank owns a percentage of the property.

Construction loans are designed for people that need to build their homes. The bank directly pays the contractor after he or she completes a construction phase.

Preferably, work with an independent mortgage broker with years of experience. Besides, ask for a professional liability cover.