Are you looking for a home loan? Maybe you are a first home buyer, refinancing or investing. We can help you get the best home loan for you. We will perform a home loan comparison to find the home loans with great interest rates and the features that you need.
Once we have selected some of the best home loans we will take you through the options.
We don’t have our own home loans to sell, instead we use our expertise to undertake a home loan comparison to ensure that you get the great home loan rates.
Loan characteristics such as interest rates, features, conditions, fees and charges can make a big difference to the overall cost and flexibility. We can help work through the options to get you the loan with the options needed and competitive rates.
How much can I borrow?
How much you can borrow will depend on your circumstances including:
- Your income(s)
- The amount of your other loan repayments and other commitments
- The amount of the deposit (cash or equity) you have
- Your eligibility for any grants or rebates such as the First Home Owner Grant or Stamp Duty Concessions
It is also important that you are able to repay the loan comfortably, even when interest rates (and your repayments) increase in the future.
What interest rate can I get?
The interest rate you will be able to get will be dependent on your circumstances and the loan you choose.
Generally, the larger the amount you borrow the lower the interest rate.
Different lenders have different interest rates, depending on which lender you use will impact on the interest rate you get. Different lenders will assess your income and your ability to repay the loan differently when considering your loan application. This means that you may not be able to get the loan amount you need/want approved with all lenders.
If you are self-employed and unable to supply all of the regular documentation that is required by the lender (to prove a stable income) you may need to get a ‘low doc loan’. The low doc loan may charge a higher interest rate.
A mortgage broker at Oak Laurel can assess which lenders can approve your loan application and of these which ones have good interest rates.
Which is the cheapest home loan?
It is difficult to determine a single cheapest home loan. Depending on your situation and how you manage your funds means that using some features may make a loan cheaper. Without considering loan features, generally for home loans of smaller amounts, those loans with cheaper fees or no fees are cheaper. For larger home loans the interest rate generally becomes relatively more important than the fee costs.
Do I need a deposit?
No, if you have a guarantor with a property you may not need a deposit and can use a guarantor home loan. If you do not have a guarantor, you will either need a cash deposit or provide equity from another property as security. You may be able to borrow up to 95% Loan to Value Ratio (LVR), that is borrow 95% of the value of the property you are buying. If you are borrowing more than 80% Loan to Value Ratio, most lenders will require you to pay Lenders Mortgage Insurance. Lenders mortgage insurance can be a costly expense if your deposit is very small and your loan is large. You may also be able to borrow the funds for the lenders mortgage insurance (add the cost of lenders mortgage insurance to your home loan amount).
Do I need to show genuine savings?
Most lenders require that you show genuine savings for loans above 80% loan to value ratios. Some lenders do not require you to show genuine saving below 90% loan to value ratios.
Genuine saving are funds that you can show that you saved rather than received as a gift. Many lenders will require that you show genuine savings of 5% of the property price. To be considered genuine savings you must show a paper trail that is at least 3 months or 6 months long, depending on the lender. For example has the money been in your account for the last 6 months or been building up in your account from your salary or wages.
What documents will l need to supply?
Lenders will require you to provide documentary evidence about your income, employment, liabilities, genuine savings (when you have a loan to value greater than 80%) and property details. They will also need to check your credit file.
How is my home loan assessed?
Each lender has their own criteria for assessing home loan applications. However, all lenders base their assessment on four main criteria.
Serviceability – can you afford to repay the loan, not just at today’s interest rates but when interest rates increase in the future? This will consider your income, liabilities (other loan repayments) and other expenses.
Employment and residential stability. These are things like: how long you have been in your current job and/or industry and how long you have been at the same residence. If you have switched jobs and industries and moved around a lot this may concern from the lenders.
The amount of deposit that you will contribute. The greater the deposit (equity may be used in place of cash for a deposit) you provide the lower the risk to the lender.
The security that you provide (the property that the mortgage is over) will influence the minimum amount of deposit that you contribute. Some properties are considered higher risk than others. A well located residential property in a capital city will be considered lower risk and easier to sell quickly than a property in a rural area.