What home loan types are available?
Every lender has their own name for each of their home loans. There’s no need to be daunted though because in reality there are only a handful of different loan types.
- Basic Home Loan
- Professional Package
- 100% Offset Home Loan / Offset Account
- Equity Loans
- Line of Credit
- Fixed Rate Loan
- Rate Tracker Loan
- Low Doc Loan
Reach out to us so that we can reach out to you and see which one best meets your needs
Which one is right for me?
When selecting the type of loan to apply for, you should firstly work out what features you need and which you do not.
The more features your loan has, the higher the interest rate.
This is particularly true for low doc loans, fixed rate loans and line of credit loans (LOCs).
The main things you need to consider are:
- Do I need to be able to make extra repayments?
- Do I need to be able to redraw any extra repayments I have made?
- Do I need easy access to my funds via an offset account or ATM access to my loan?
- Can I prove my income?
- Would I like the security of knowing exactly what my repayments are each month?
- Would I like to be protected from interest rate fluctuations?
- Is my loan large enough to negotiate a professional discount? (Generally $250,000+
At Bloom we are here to help. It is our goal to help you achieve your dream with a home loan that doesn’t cost the Earth.
The process of getting finance for a home loan changes constantly. The best lender this month may not be the next. This is because there are many factors, apart from rate, that lenders change on a regular basis. Keeping on top of lender policy changes and making sure the best options are presented to meet your needs and objectives takes effort.
Some examples include:
- How your income is assessed
- Are you the type of lender that bank is looking for at the moment, and if not which bank wants your business right now
- Do they offer the loan types you need for current and future needs
- How they value your property
- How long will the bank take to assess my application
- Do the lenders offer special concessions based on your occupation
Nearly 70% of all new home loans are now
done with a mortgage broker.
There are many reasons for this. The most important are that a Mortgage Broker is legally bound to operate in your Best Interests. Banks do not have this obligation. Mortgage Brokers also offer you a choice. Banks are only able to offer you their products.
How we are paid
There is no cost for seeing a professional Mortgage Broker. The lender will pay the broker a commission for introducing the client to them.
Applying for finance is a big deal. Every application for credit will remain on your credit file for 5 years. Multiple applications for credit within a short period run the risk of shredding your credit score and making it more difficult to get finance.
We are close!
Bloom is your professional advocate as your Brokers for Loans. We are in your corner to get the right loan for you. We live in and know the area well. Let us support you.
- We specialise in obtaining approvals, not just pencil pushing.
- We provide dedicated support to ensure your application progresses faster than most others in the industry.
- Bloom Home Loans operates on a best interest duty, banks do not.
- We offer Australia wide services.
- A full member of MFAA and AFCA, we only enact the most ethical and fine tuned lending practices.
To put it simply, the lender’s maximum loan is normally between 5 – 7 times gross income. It is always important to consider what is the best way to present your income to a lender so that they will understand? Items such as personal loans, credit cards and HECS debt all have a very large impact on how much you can borrow. Depending upon your income some lenders are very strict on overtime, bonuses, commissions and self employed. Whereas others are far more lenient in these areas. We are experts in understanding each element which may affect your ability in obtaining credit.
Absolutely! We pride ourselves in knowing lender policies for our self employed clients. Some lenders will offer prime rates will an ABN as little as 6 months old. Understanding your business and then representing this in the right way to the right lender is very important. A good Accountant will ensure you have tax effective income. A good Mortgage Broker will understand the good work your
accountant has done and then represent this to the bank in the right way to increase your borrowing power.
Many years ago lenders needed you to have at least 20% deposit plus stamp duty to buy a home. As living costs and home prices increased; they released this was an unrealistic hurdle. So they allowed clients to have as little as 2% deposit but pay a one off insurance premium – Lenders Mortgage Insurance (LMI). LMI protects the lender in the event you default on the loan but you pay the premium. LMI is normally added to the home loan. Whilst it can be a significant cost, it enables you to get into the market sooner
All lenders use independent third party valuers to assess the value if your home when a full on site inspection is required. Normally this cost is picked up by the lender. Some lenders have their own software to automatically determine the value of your home. Valuations between lenders vary significantly. Sometimes more than 20%. If a valuation is required we will order this for you.
Rather than count yourself out of being able to get finance we recommend you contact us as you may be surprised what is possible. There are specialist lenders we have relationships with that will consider your loan application even with bad credit, defaults, ATO debt and bankruptcies.
Lenders look at your Capacity to repay the loan, your Capital / how much money you have, Collateral you are offering as security for the loan, Conditions including the economic environment, loan purpose and interest and your Character to ensure you are a responsible borrower and will repay the loan
Fixed rates are great if you are worried about what would happen when interest rates rise. They offer certainty for a period of time but this certainty may come at a cost with higher interest rates. You will likely also be restricted from making additional repayments off your loan. Variable rates enable you to pay as much off your home as you like without penalty. You can also access these payments again via redraw if you are ahead on your scheduled payments. If rates fall you will benefit whereas If they rise your loan payments will increase. It is possible to have a split loan, where a portion is Fixed and a portion Variable.
The best loan is the one that offers certainty of approval and meets your needs now and into the future. The lowest rate may not necessarily be the best fit. Whilst a low rate may be enticing now, if the bank policies mean you cannot access it or if the loan structure is not suitable then this may not
be the best option for you
Yes. This is sometimes called “the bank of mum & dad”. Loans with no deposit may be possible if another property is offered as partial security to support the loan. It may not increase the amount you can borrow but it will reduce the risk to the lender and result in a lower interest rate. It will also save you having to pay Lenders Mortgage Insurance. It is not without risk though. The guarantors property is used to secure your loan If you default on your loan the bank may call upon the guarantor to pay the shortfall. Guarantor loans of this nature are limited but still present a risk.
If the loan term exceeds your expected working life the lender will want to know how you will pay the loan when you finish working. This is termed an exit strategy. There are various exit strategies that are considered by lenders. Some include downsizing to a smaller property after retirement, using superannuation to pay off the remaining loan or if it is an investment property you can sell it at any time
We save you time by preparing the loan application and presenting you to the most suitable lender in the best manner, request interest rate reductions on your loan, structure the loan, offer guidance on the benefit of making additional loan repayments and saving you time. When we say our home loans don’t cost the Earth, we mean it. Even a 0.50% interest difference on a $500,000 loan over 30
years will save you more than $55,000
Every lender is different. For our first meeting we recommend getting evidence of income, liabilities and ID. We will guide you on the specific requirements as we progress your application
We will make this clear once an application is lodged. Approval timeframes vary depending on the lender and complexity of your application. We monitor your application every day to ensure it never falls behind as we have seen is all too common in the industry.
We encourage you to reach out at any time! We have a passionate team ready to discuss your needs right away.