Home Loans
Buying property can be both exciting and daunting at the same time. We’re here to help to ensure you’re armed with the right information to help you make the right decisions. Having us on side is the smart way to go and having this site as a handy reference tool will keep you streets ahead.
Your Home, Your Castle…the great Australian dream
Here at Optometry Finance Australia we have the right people in place to assist you with all your home lending needs. With us at your side, you’ve got someone going into bat for you across Australia’s leading lenders, securing the deal that’s right for you. The choice is endless with hundreds of mortgage products available, and the mortgage market is dynamic and ever changing with lenders changing interest rates independent of the Reserve Bank. Now, more than ever, is the right time to have a broker on your side when looking for a home loan.
Whether you’re wanting to renovate, consolidate debts, change for better rate or loan options, or purchase a new property, refinancing your existing loan may be the way to go.
The mortgage markets are ever changing which is why staying in touch with us on a regular basis is the smart thing to do. We are always more than happy to conduct a review or quick home loan health check on your current loan.
It’s an easy and fast process, we’ll make a date to review your loan and we will then walk you through the options available that will suit what you’re looking to do.
Research and having the right people to help you are the keys when investing in property.
It definitely pays to do your homework on the property market before you dive in, and we’re thrilled to be on board to help you when it comes to financing your investment.
There’s a myriad of options when it comes to investment loans and we’ll be able to walk you through the right solution for you, so please contact us directly via phone or email and let’s see how we can help.
Buying your first home is a big step to take. A very exciting step, but one that comes with endless questions and options and decisions on how to finance it, how mortgages work, how to find the right one for you and the big question on how much you may be able to borrow.
LVR? LMI? Split facilities? Fixed or variable? Redraw facilities? It can be pretty daunting, and confusing when looking at the home loans options out there.
That’s where we come in. Our job is to take the stress away and do all the legwork for you in terms of comparing home loans from over 1,400 products available from Australia’s leading lending institutions at our fingertips.
We’ll guide you through the maze, and help tailor a solution that’s just right for you
Spend a few moments checking out our site’s clever calculators, hints and tips. Then just get in contact with us and we’ll show you how we can help. We look forward to then sitting down with you and walking you through the options available that will suit what you’re looking to do.
Variable
Variable rate loans often provide additional flexibility and are the most popular type of home loan in Australia. As the name suggests the interest rate is variable and therefore fluctuates with the Reserve Bank of Australia’s movement and the cost of the financial institution sourcing funds to lend. Variable rates are generally broken into two categories by financial institutions: basic and standard.
As the name suggests the basic variable rate only covers the basic home loan features. On these loans you won’t have access to features such as a redraw facility; however this also means the interest rate is generally slightly lower than other loans.
The standard variable rate is traditionally slightly higher than the basic variable, however along with this you receive extra features such as a redraw facility, repayment frequency flexibility, portability and the option to pay in advance.
Variable loans generally require closer monitoring, especially if you over-capitalise and interest rates rise. It is important to make sure that you budget and plan for the future should interest rates rise, to ensure that you are able to meet the required repayments.
Fixed
Fixed rate loans generally have all of the features of a standard variable product; however the interest rate is fixed generally from one to five years. Fixed rate products are great products to help maintain the household budget because the repayments will not change during the fixed period.
However, a fixed rate loan means you could end up paying more if interest rates fall. It is possible to exit the loan agreement if you feel it is right to do so, although lenders will generally charge penalty fees to compensate for any loss in profits they may suffer.
Introductory and Honeymoon
Introductory or Honeymoon loans are generally popular for first home buyers, however this doesn’t mean that these are the only people who can access these products. Honeymoon loans give individuals a discounted interest rate for the first six to twelve months depending on the product. After this period expires, the loan generally reverts to the lenders standard variable product.
Although it may be tempting to take out a Honeymoon loan because of its reduced interest rate, it is important to watch out for restrictions or exclusions on other aspects of the loan. Many lenders will limit the availability of features (such as redraw facilities, repayments etc.) to offset the lower interest rate. In some cases this can mean less flexibility over the life of the loan.
Interest only loans are particularly popular for investors. The repayments of interest only loans will be lower than an ordinary loan because you only pay the interest charges each month – you aren’t required to pay off the principal.
Some interest only loans are available for owner-occupier clients; however these can be risky because your level of debt will not fall for the life of the loan. Interest only loans should be a short term option (about 5 years at the most). Also, in times when house prices may fall this may mean you have negative equity – you have borrowed more than your house is worth.
Low Doc and No Doc
Low and No Doc loans are increasingly popular in Australia, especially for self employed or contractors. As the name suggests you require less documentation to take out the loan (this is essentially proof of income and other debts etc).
Although it is generally much easier to be found eligible for these loans, it is not always the best way to go. As a result of providing less documentation the bank will generally charge a higher interest rate or additional fees (see note below) because there is a higher perceived risk with applicants. If possible, in most cases you will be better off with a full doc loan (full documentation – providing the required proof of income etc) because they are a cheaper product in the long run. Although it may be less work to apply for a low or no doc option, the extra work can be worthwhile applying for a full doc loan.
(Footnote – vehicle and equipment low doc/ no doc loans usually do not attract higher rates – ask us about these today!)
So how do I know which loan to choose?
That is one of the most frequently asked questions and something that needs to be carefully considered before jumping in and signing loan documents. Really, it comes down to what you think is right for you. Speaking to a broker is a really great way to find out what loan is most appropriate for you.
A broker won’t force you to take out a product; they recommend a loan that will suit you based on the information you have given them and take care of all of the paperwork and application requirements. If you specifically would like a certain type of loan a broker is able to compare a wide range of them.
Get in touch
Speak to us, we can quickly help find out how much you can borrow and which loan suits your needs, plus answer any questions about the process.
Arrange a pre-approved loan
If you haven’t started your property search, or are still looking, a pre-approved loan can be useful. It gives you peace of mind that you can buy a property up to a certain amount. And it may put you in a stronger negotiating position than other potential buyers who don’t have pre-approval. We can take care of the paperwork to lodge a loan application. See our loan documents checklist before meeting with us.
Find your property
Make sure you do plenty of homework when you’re on the hunt for a new property. Research property prices in the area, potential capital growth and existing and planned infrastructure, such as roads, public transport, schools and shops. If you’re unfamiliar with property values in the area, consider a full valuation carried out by a registered valuer before making a final decision.
Make an offer and sign a Contract of Sale
Whether you buy property at auction or make an offer on a listing, your agreement with the vendor only becomes a legal commitment when a Contract of Sale (“or Offer of Acceptance”) has been signed by both parties. This contract will confirm the selling price as well as any terms and conditions. Your commitment will usually be subject to bank approval, a building inspection report and a pest inspection.
The period from signing a Contract of Sale to Settlement — when the property becomes legally yours — is usually six weeks (shorter in some states, such as Queensland). Note: even if you have a pre-approved loan, your lender will still need to complete a valuation of the property you have chosen before issuing full approval.
Pay a deposit
A deposit is required once a Contract of Sale has been signed by both parties (sometimes called ‘exchanging contracts.’) You won’t yet have access to your home loan, so your deposit will need to come from savings or elsewhere. You may also be able to arrange a deposit bond until settlement. Speak to us about your deposit options.
Appoint a conveyancer
You will need a solicitor or conveyancer to check the legalities of the Contract of Sale. Your conveyancer will also check all rates and taxes have been paid, check land use or building approvals for the property and order any relevant searches. They may also help sort out any inspections.
On settlement day, the conveyancer will check the correct amount of money has been transferred from your lender to the seller and all fees – such as Stamp Duty – are paid, so you can take legal ownership of the property.
Cooling off period
If you didn’t buy your property at auction, you have a cooling off period when you can cancel the contract, although there may be a small penalty. Cooling off periods vary from state to state. There is no cooling off period in Western Australia.
Talk to us today about how we can help you into the right home finance today.
