Loan Types & Process

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Loan Types

These are generally the “no-frills” version of the Standard Variable home loan, and so have some limitations in terms of redraws, additional payments and other options, but therefore also generally come with a cheaper interest rate.

These days it is very easy to accumulate a variety of debts and credit facilities, and often consolidating these into a Home Loan, and reducing interest rates, can take some pressure off the home budget. But you should have a professional Finance Broker ensure you are achieving the right outcome for your needs.

These allow you to fix the interest rate on the home loan for a period of time, generally between 1 and 5 years, but some lenders will go as high as 10 or 15 years. The main advantage is the certainty of loan payment amounts for the fixed term, but conversely there are often limitations on additional payments and other options.

These are the most flexible of all Home Loans and if used correctly can be very advantageous in minimizing interest. Rather than a monthly payment of interest and principal, a line of credit provides for essentially an overdraft limit in which to deposit and withdraw as required. However care must be taken to ensure this type of loan is suitable and used effectively.

Today most borrowers should regularly review their Home Loan package to ensure they are achieving the best possible deal available. Depending on your needs or motivation, refinancing can often provide a better outcome for improving cash flow, or debt reduction strategies.

A split loan is a combination of some of the above – so rather simply having one home loan under one set of terms, it can be split into say a Standard Variable, a Fixed and a Line of Credit, in order to gain maximum benefit from all of the options available.

By far the most common Home Loan amongst Australian borrowers and offered by a wide range of Bank and non-Bank lenders. More flexibility than a fixed rate home loan, such as large additional repayments, but the interest rate will move up and down with market forces.

The Loan Process

  • Assessing our client’s needs and determining the best suit financial solution and collection of all necessary documentation.
  • Application is submitted to the appropriate lender.
  • The Lender advises of Conditional or Pre-Approval, which is usually subject to valuation and any other required information which they deem necessary.
  • The Lender will instruct one of their panel valuers to value the property.
  • Once the Lender is satisfied with the valuation they will require the provision of any outstanding approval conditions per Step 3.
  • When all approval conditions are met to the Lenders’ satisfaction, a formal approval is issued. A formal approval confirms the availability of finance.
  • The Lender or their Solicitors prepares the loan and mortgage documents which are sent to Finance Mutual Australia for the clients to sign.
  • All Lenders documents are signed and returned to the Lender in readiness for settlement.
  • Once the Lender receives all signed Loan documentation they will liaise with the clients’ conveyancer/landbroker, in respect to a purchase, or the clients’ current Lender, in respect to a refinance, to arrange a settlement date.