Home Loans in Adelaide - Learn about the Different Options

Posted by Greg Samuel on August 2nd, 2016

Buying a home in Adelaide is one of the biggest financial investments you will ever make, so it only makes sense to be prudent when shopping for home loans. Take time to learn about your different options and think about how they will affect your cash flow in the long term. Experts often suggest that you work with an experienced and reliable mortgage broker in order to get the best deals. An Adelaide mortgage broker can likewise explain the different types of home loans available and help you decide which one best fits your requirements and ability to pay. 

Fixed Rate Home Loan 

Many people opt for fixed rate home loans in Adelaide because they like the security of locked-in repayments. With this type of loan, you pay a fixed amount throughout the term of the loan, allowing to plan your finances with a bit more certainly looking forward. Fixed rate periods can range between 1 to 10 years. The longer the locked-in period, the higher the interest rate (in general). 

Interest Only Home Loan 

In this type of arrangement, you pay only the interest (not the principal) for a certain period (up to 10 years). This frees up your money so you can spend it elsewhere, such as on renovations or in other investments. 

Line of Credit Loan

This fixed limit loan can be used for whatever purpose you see fit, including buying a home. Your lender essentially gives you a line of credit that you can access on your discretion. This kind of loan generally has higher interest rates. Limit fees may also apply. 

Low Documentation Loan 

Also known as ‘lo doc’ loans, these arrangements require fewer documents for approval. They are generally extended to self-employed people without up to date financials and are therefore ineligible for regular home loans. Some lenders only require trading account bank statements or BAS statements. You may be able to borrow 60% to 85% of the home’s value. 

Non-Conforming Loans 

Borrowers who don’t satisfy the stringent lending criteria imposed by traditional lenders (like banks) may be able to seek non-conforming loans in order to buy a home. Lenders in this market are more flexible, but this flexibility comes at a cost. Expect fees and interest rates to be higher. This type of loan is not recommended for everyone, but when used correctly, they can help those with bad credit re-establish their financial records by showing a good repayment history, so they can eventually refinance to a traditional home loan with lower interest rates. 

There are many different home loan products in Australia offering varying benefits. The key is to look beyond interest rates and truly understand the advantages of certain loan types for your situation. A mortgage broker can guide you to real value.   

About The Author:

Samuel Finance is a leading organisation for commercial finance and mortgage broking. They have a personalised approach to help you achieve a superior outcome for your personal or business finances. They provide finance for business loans, trading, working capital, property investment, development, home loans and more. They always strive hard to be a trusted advisor and deliver an outstanding level of personalised customer service.

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Greg Samuel

About the Author

Greg Samuel
Joined: October 14th, 2015
Articles Posted: 34

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