For most Aussies, a home loan is the biggest financial commi
What is a Home Loan?
How Does a Home Loan Work?
How Does a Home Loan Work?
Most Australians do not have the luxury of being able to buy a home or property outright with their own savings, which is where a home loan comes in. A home loan or mortgage allows homebuyers to borrow money from a lender for the purposes of buying a residential property to live in, or as an investment. There are several different types
Most Australians do not have the luxury of being able to buy a home or property outright with their own savings, which is where a home loan comes in. A home loan or mortgage allows homebuyers to borrow money from a lender for the purposes of buying a residential property to live in, or as an investment. There are several different types of home loans, each catering to the different needs and financial circumstances of property buyers.
How Does a Home Loan Work?
How Does a Home Loan Work?
How Does a Home Loan Work?
With a home loan, homebuyers borrow a sum of money from a lender (financial institution or bank) which they then have to make repayments to, over a period of time, known as the loan term. Once homebuyers have been approved for the loan, it can then be used towards purchasing the desired property.
Depending on the type of home loan, repaym
With a home loan, homebuyers borrow a sum of money from a lender (financial institution or bank) which they then have to make repayments to, over a period of time, known as the loan term. Once homebuyers have been approved for the loan, it can then be used towards purchasing the desired property.
Depending on the type of home loan, repayments will be made based on an applicable interest rate. In addition to repayments, the purchased property may also be used as collateral for the loan — this arrangement is known as a mortgage.
Are Home Loans and Mortgages the Same?
Are Home Loans and Mortgages the Same?
Are Home Loans and Mortgages the Same?
Though these two terms are often used interchangeably, they actually refer to two different arrangements.
A home loan refers to a borrowed sum of money provided by a lender for the purchase of the property, while a mortgage simply refers to a conditional arrangement where the purchased property is used as security for the loan. In the eve
Though these two terms are often used interchangeably, they actually refer to two different arrangements.
A home loan refers to a borrowed sum of money provided by a lender for the purchase of the property, while a mortgage simply refers to a conditional arrangement where the purchased property is used as security for the loan. In the event that repayments are not made on a mortgage, the lender has the right to sell the property to recoup their losses.
What to Look for in a Home Loan
Are Home Loans and Mortgages the Same?
Are Home Loans and Mortgages the Same?
Home loans come in different shapes and sizes, each designed to fit homebuyers with differing financial needs. In order to get a home loan that best fits your situation, you should work with a broker to consider the following factors when evaluating a home loan:
- The type of applicable interest rate (fixed, variable)
- The amount you can bor
Home loans come in different shapes and sizes, each designed to fit homebuyers with differing financial needs. In order to get a home loan that best fits your situation, you should work with a broker to consider the following factors when evaluating a home loan:
- The type of applicable interest rate (fixed, variable)
- The amount you can borrow with the home loan (Loan-to-value ratio)
- Reputation of the lender
- Length of the loan term
- The cost of the loan’s fees (application fees, lender's insurance)
- Flexibility of the loan for extra features (ability to redraw, offset account, extra repayments)