Main loan types

The most common loan type
A Standard Variable Home Loan is popular option for borrowers for both home and investment loans, with repayment periods of up to 30 years.

One of the most popular loans
Basic loans have the lowest running costs - and less extras - so you generally pay a lower interest rate. Before you choose this loan make sure that you don’t need any extras (such as fee free credit cards, offset accounts and other accounts etc.) and compare the costs of getting them separately.

Loan with a set interest rate for a period of time
"Fixed rate" means you know exactly what your repayments will be for the term of the fixed rate. If you are unsure about whether to take a fixed or variable rate - you could consider a Split Home Loan. – so part of your borrowing is at a fixed interest rate and part at a variable interest rate.

A common loan type for the Self-Employed
Today, more people are self-employed or employed on contract, so their income patterns are not as regular as PAYE employees. A Lo Doc Loan can be set up whereby you "self-certify" your income. This avoids the trouble of asking your accountant to provide up-to-date financials every time you wish to borrow money.

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Types of loans and details

One of the most popular loans
These loans have the lowest running costs - and less extras - so you generally pay a lower interest rate. Before you choose this loan make sure that you don’t need any extras (such as fee free credit cards, offset accounts and other accounts etc.) and compare the costs of getting them separately.

Advantages

Discipline - regular repayments help you with budgeting. The interest rate is generally lower than standard variable rate loans. Extra repayments - these are usually allowed at any time.

Disadvantages

Money held in normal savings accounts with the same institution is unlikely to be able to offset your mortgage interest liability. As the interest rate is variable you are exposed to interest rate fluctuations (which may be favourable or unfavourable). Other facilities such as loan redraw may not be available or may have a fee for use.

A Standard Variable Home Loan is a common offer by banks and has been used by many people to buy properties. These home and investment loans have repayment periods of up to 30 years and are regularly used by home buyers today. However there are usually better deals to be found and traps to avoid which we can assist you with at Lightning Fast Home Loans. For example: don’t be misled by start-up lures – introductory or honeymoon rates! Often lending institutions will offer a discounted start-up period with lower interest rates to motivate you to choose the loan. The benefits of this discount (or honeymoon period) are short-lived as the remaining years on your loan are charged at a standard variable rate. There may be occasions when these are appropriate (such as when one borrower will receive an increased income in a year or two after completing study, returning to work after maternity leave etc), but we believe that a thorough discussion with us will ascertain whether this type of loan is the most suitable in your circumstances.

Advantages

Discipline - regular monthly, fortnightly or weekly repayments help you with budgeting.
Redraw - most institutions will allow you (subject to terms and conditions) to withdraw additional repayments you have made over and above the minimum repayment.
Offset - it may have the ability to offset credit balances held in other accounts at the same institution against the principal of the loan. Extra repayments - these are usually allowed at any time.

Disadvantages

The interest rate is variable (apart from any start-up period) and the loan will be subject to interest rate fluctuations. The interest rate is always higher than Low Frills Home Loan rates.

Loan with interest rate locked in for a period of time
Fixed rate loans provide a fixed interest rate for the term of the fixed period. Fixed rate loans are for those who want certainty in their future repayments for a period of time and for those who anticipate future rises in variable interest rates. It is possible to split loans, such that so part of your borrowing is at a fixed interest rate and part at a variable interest rate – see Split Home Loans. (below)

Advantages

Discipline - known repayments help you with budgeting. If interest rates go up, you will not be exposed to the increase in interest rates on your fixed rate loan. Extra repayments - these may be allowed but may be capped at a certain amount per year.

Disadvantages

If interest rates go down, you will not benefit from the decrease in interest rates on your fixed rate loan.

A common loan type for the Self-Employed
Today, more people are self-employed or employed on contract, so their income patterns are not as regular as PAYE employees. A Lo Doc Loan can be set up whereby you "self-certify" your income. You will generally need to supply 12 months of BAS or 12 months business transaction accounts statements to support your income declaration. Nevertheless, with these loans you do not have to supply a tax return and ATO Notice of Assesment. You may have some restrictions imposed, particularly in relation to the amount you can borrow against your property.

Advantages

  • There is no need to provide full financials to the lender.
  • You receive faster access to your loan and greater flexibility.
  • Non-traditional and irregular income sources are considered.
  • Some lenders also offer Lo Doc Loans to investors and PAYG earners.
  • Disadvantages

  • You may pay higher interest rates and fees
    • E.g. Lender’s Mortgage Insurance if your Loan to Value Ration is above 60%.
  • You may be at risk of over committing yourself if your income varies.

  •   Speak to us first - We look after many first-home buyers and those refinancing who need to do low documentation loans.

    It is a misnomer that the professional package is just for professionals! This is not the case. In fact, the only requirement you need to access these loans is to meet the lender's minimum loan amount (which can start at $100,000). A professional package may offer you interest rate discounts depending on the loan size, as well as fee free transaction accounts, an offset account and credit cards free of charge and a range of other special offers. Higher interest rate discounts are often available for loans above $250,000.

    Advantages

    Interest rate discounts on the standard variable rate and some line of credit products. You may be eligible for other benefits such as fee free transaction accounts and the annual fee waived on some credit cards. Most Home Loan lenders also offer no establishment fees and no ongoing monthly fees on your loans.
    Extra repayments - these are usually allowed at any time.

    Disadvantages

    An annual fee applies to this package, in most cases, in place of establishment and ongoing monthly fees.

    Fixed & Variable Interest Rate Loans (Split Home Loans)
    If you are unsure as to whether interest rates are going up or down, or you want to minimise some of the uncertainty of your loan repayments, you can choose a Split Rate Loan. With this type of loan, you nominate how much of your home loan you would like to be secured with a fixed interest rate and how much of your home loan (the remaining amount) you would like to put on a variable interest rate. A Split Home Loan is a cautious way of borrowing as it provides greater certainty in repayments than a purely variable interest rate loan while maintaining some exposure the interest rate movements on the variable split. Split loans can be effectively used within Professional Packages where extra accounts do not incur further fees.

    Advantages

  • Having part of your loan at a fixed interest rate protects you against interest rate rises on the fixed component.
  • Leaving part of your loan on variable interest rate leaves you less vulnerable if rates reduce.
  • By depositing your salary and savings into this loan you reduce the interest charge.
  • Additional payments are allowed on the variable portion of the loan.
  • Disadvantages

  • You may not benefit to the fullest from any interest rate reductions.
  • You may be charged set-up fees, account fees and discharge fees on both the fixed and the variable portions.
  • You may be penalised for making higher repayments on the fixed portion.
  • You may be penalised if you pay off your loan before the due date on the fixed portion.
  • Bad Credit History?
    If you have experienced financial problems in the past, this is the loan to help you re-build your bad credit rating and obtain a mortgage. Non-conforming lenders are very flexible - even if you have been bankrupt or just have a bad credit history, this type of product, sometimes known as a bad credit loan, will make it easier for you to secure your wanted mortgage.

    Advantages

  • You will get a fresh start and the chance to re-build your credit rating.
  • Non-judgmental lending rules with flexibility.
  • Disadvantages

  • You'll pay higher interest rates and fees.
  • You will require a larger deposit than normal.

  •   Speak to us first - We have assisted many home buyers who needed advice when considering a loan but had a problem with their credit history.

    Buy before you sell
    This can simplify the transition between properties. If your home is for sale - and you find a property to buy, or wish to build - the lender advances the money so you can purchase your new home. Depending on the equity in your current home, you may be able to include all the fees too. The interest charged to your loan can be paid by you or capitalised (added to the loan amount). When your original property is sold, the proceeds are deposited to the new loan. The amount owing becomes your end loan and normal repayments commence.

    Advantages

  • You can buy or build your new home before you sell your existing home.
  • You can avoid moving into a rental property and move directly into your new home.
  • Disadvantages

  • Interest is charged on the full amount of the new loan.
  • If you don’t sell your existing home quickly, the interest bill can really add up.
  • It may force you into selling your existing home at a price lower than you want to.
  • You must have sufficient equity in your existing property to support the purchase of both.
  • Consolidating your debts or loans
    Many people pay more interest than they need to on their debt. This means that it can cost a lot more and take a lot longer to reduce the amount owing. If you have debts - especially those with very high interest rates such as credit cards or personal loans - it can be very wise move to consolidate them into one loan at a lower overall interest rate. This has the twin benefits of saving you money and making it easier to track (and control) knowing how much you owe.

    When it comes to consolidating your debts there are a range of options available. Which one is the most appropriate for you depends on your individual circumstances and factors such as your stage of life, how much equity you have in your current home, the nature and number of your debts and your overall financial situation.

    Speak to us first

    We will help work through the options and can assist with this complex, but potentially very rewarding, loan option. This is where the knowledge and experience of your Lightning Fast Home Loans consultant can be invaluable. We'll look at your total situation and work with you to explain all your options and the advantages and risks associated with each. Then we'll ensure you get the full benefits from the loan of your choice.

    Loans for building a new home or a new investment property

    Whether you're building a new home for your family or an investment property, the whole process is often stressful and demanding - the last thing you need to worry about is your finance.

    Choosing the right loan can save you worry and money, but it can be a complex process as there is a wide choice of home loans available. Which loan is the most appropriate for you, depends on a range of factors, including your overall financial position, the equity you will have in the finished property, your timeframe and whether you are selling another property, as part of the whole process.

    Speak to us first

    This is where the knowledge and experience of a Lightning Fast Home Loans consultant can be invaluable.

    For the over 60's

    As governments put more responsibility on individuals to fund their own retirement, many people find that their super and other income sources such as the pension dont’t provide enough money to support the lifestyle they want. An obvious option is to sell their biggest asset - their home, but that too may be part of the way they want to live. This is where a reverse mortgage may provide the answer. A reverse mortgage is available to residential property owners over 60. It allows you to release funds using the equity in your home. You can use these funds as an income stream or for personal lifestyle needs like travel, home improvements etc.

    Like a traditional mortgage there's interest to pay, but you dont’t have to make monthly repayments. The interest is capitalised, which means it’s added to the amount of the loan. When your home is eventually sold you'll pay back the amount of the loan (the cash you received) plus the interest owing. There are a range of reverse mortgage options available. Which one is the most appropriate for you depends on your individual circumstances and other factors.

    Speak to us first

    This is where the knowledge and experience of your Lightning Fast Home Loans consultant can be invaluable. As SEQUAL accredited, we have the highest, specific industry qualification available to ensure that you get specialist advice. We can look at your total situation and work with you to explain all your options and the advantages and risks associated with each. Then we'll ensure you get the full benefits from the loan of your choice.

    Loans for your business or commercial investments

    In addition to home loans we also provide a full range of business loan services for property finance.

    The most appropriate option for you depends on your individual circumstances and factors including the nature of your business, any other debts it may have, its overall financial situation, the reason for the business loan and your timeframe.

    Speak to us first

    We have access to a wide range of both bank and non-bank lenders and we can assist you in finding the best finance solution for your business or commercial investment.

    Contact us if you'd like to learn more.