Home Loan Services
All home loan needs under one roof….
CONNECTED HOME LOANS
With over 30 years experience in Banking and finance, we at Connected Home Loans understand the importance of building client relationships from the very beginning based on trust & integrity.
Connected Home Loans believe that people, not product, make better business, so, we encourage our clients to refer us to their relatives, friends & neighbours, creating a network of information, understanding & trust.
Catering to a variety of markets, including:
First Home Buyers
Multiple Finance Structures
Domestic, investor & business loans
The team at Connected Home Loans understand how finances can affect the day to day dealings of individuals & businesses, so, we explore all avenues to maximise our clients borrowing potential & minimise the impact of repayments.
TYPES OF LOANS
There are hundreds of different loan products out there being offered by Banks, Credit Unions and other lenders so choosing the right home loan is never easy. It’s no wonder most people can find it overwhelming. At Connected Home Loans we will take you through the borrowing process with consideration to your specific needs and goals to arrive at the most appropriate loan for your requirements. Following are the various types of loans available:
Variable interest rate loan
The standard variable rate loan comes with many options and the interest rate fluctuates depending on market conditions. You have flexibility of making additional repayments without penalty and the ability to redraw those additional repayments you have made at any time. Many lenders also offer a basic variable rate loan with a lower rate than the standard variable rate loan. These loans generally have many of the same features as their standard variable rate cousins, but often aren’t as flexible. For example, some of these loans may not allow the redraw of additional payments or may incur fees to do so. You may consider a variable rate loan if:
- you want ultimate flexibility with your loan
- you want to be able to make large principal repayments on your loan
- you have the capacity to absorb increases in interest rates without undue hardship, and conversely, benefit from rate decreases
Fixed interest rate loan
A fixed interest rate loan allows you to fix the interest rate for a period of time, generally between one and five years. Some lenders have fixed terms of up to 15 years. After the fixed term the loan usually reverts to the standard variable rate on offer at that time or you may choose to re-fix the loan for another term.
You may consider a fixed rate loan if:
- you are on a tight budget and need certainty of the repayment amount each month
- you are an investor looking to achieve a fixed return on
- your investment you believe interest rates may rise significantly in the future and can’t afford an increase to your repayments
If you decide to sell your home or refinance your loan whilst on a fixed rate term you will generally incur a penalty.
Line of credit
These loans provide the ultimate in flexibility. Your total income is deposited into the loan account thereby reducing the balance immediately. As interest is charged daily on the outstanding balance, while that money sits in the loan account the interest charged will be lower. The easiest way to understand how these accounts work is to look at them like a savings account in reverse. The balance is always negative and the closer to zero you get the better off you are.
You may consider a line of credit if:
- you want to pay as little interest as possible; and
- you can effectively manage your money and keep to a budget
Low doc loan
This type of loan is designed for those who are unable to produce standard financial records to verify their income. In most cases you will need to have been self-employed for 2 years. Generally, borrowings of up to 80% of the purchase price or valuation (whichever is the lesser) is allowed.
A professional package can give you all the benefits of a standard variable rate loan with a discount on interest rate as well as other benefits, such as a credit card and a discount on the establishment fee. Eligibility is based on income or loan limit. Most lenders charge an annual or monthly fee for this privilege.
This is a finance solution designed to help people enter the property market with little or no deposit. There are also other situations such as matrimonial splits where a family guarantee can allow a borrower to retain the family home.
Borrowers are able to purchase or refinance the property by relying on guarantors for security and/or servicing support. The guarantor should usually be a parent, parent in law or step parent; however lenders will look at each case individually.
A reverse mortgage is a product for those over the age of 60. It allows you to release some of the equity you have tied up in your home or investment property. It can be accessed as either a lump sum, or as a series of regular payments.
The amount of equity you can access depends on your age and the value of your property. In general the older you are the more money you can borrow. You can use the funds for any purpose.
A reverse mortgage works in the opposite way to a standard home loan. It is a loan that does not need to be repaid whilst you live in the property. The loan amount plus accrued interest is repaid upon sale of the property
What is Lenders Mortgage Insurance?
Lenders Mortgage Insurance (LMI) is a type of insurance that’s taken out as part of certain home loan applications. LMI provides lenders with cover for any shortfall that may occur from the sale of a security property. When borrowers seek a loan in excess of a loan to valuation ratio (LVR) of 80%, LMI is required. For certain types of applications (e.g., low doc loans), LMI may be required for loans with an LVR over of 60%. The LMI premium is payable by borrowers.
What is a comparison rate?
The National Consumer Credit Protection Act 2009 (Cth) stipulates that any advertised interest rate must also include a comparison rate. A comparison rate is calculated in accordance with a standard formula which incorporates known establishment, ongoing and discharge fees into the interest rate. It is designed to provide you with the ability to compare the ‘true cost’ of different loans. However, the comparison rate does not include any ‘event-based costs’ such as redraw fees or fees that are not known at the time the comparison rate is provided.
Can I increase my repayments?
This depends on your circumstances and the terms of your loan contract. Our variable rate loans also allow you to make additional repayments at any time to help you save on interest costs and pay off your loan more quickly.
How often can I make my loan repayments?
You can choose to make your home loan repayments weekly, fortnightly or monthly. Our variable rate loans also allow you to make additional repayments at any time to help you save on interest costs and pay off your loan more quickly.
What is a Loan to Value Ratio?
A loan to value ratio (LVR) is the term used to describe the amount of the loan as a proportion of the value of the residential property, and it’s expressed as a percentage. So, for example, a loan amount of $260,000 on a property with a value of $400,000 would have an LVR of 65%. The LVR can vary according to the type of loan you choose, your income source and the type of property that’s used as security over the loan.
How can I cope with interest rate rises?
If you’d like to minimise the impact of interest rate rises on your ability to keep up your loan repayments, it’s important to plan ahead. Use our repayment calculator to work out your budget. If you can afford to make additional repayments now to get ahead on your loan repayments? This might give you some breathing space if your budget gets tighter in future. Look at your other regular expenses and see if there are any that can be reduced. It’s also a good idea to review your loan situation every 18 months or so. Ask yourself if your home loan still suits your circumstances.
What is a low doc loan?
This is a term used to describe the extent and type of financial information you’re able to provide when you apply for a home loan. If you’re unable to provide payslips or up-to-date financial statements then a low doc loan might suit you better than a more traditional loan (e.g., if you’re self-employed or a contractor).
What is meant by ‘Interest-only’?
This is a repayment type that allows you to make regular repayments that only incorporate the interest charged on the loan, over a set period of time. This means that the outstanding loan balance remains relatively unchanged during the term of the Interest-only period. Liberty offers Interest-only periods of between one and five years. After the initial Interest-only period the loan reverts to Principal and Interest for the remaining term of the loan.
What is meant by ‘Principal and Interest’?
Principal and Interest is the standard type of repayment for most home loans. The borrower makes regular repayments that include a portion of the principal repaid and the interest that is charged on the outstanding loan amount. Over time the principal portion of the repayment will increase and so the outstanding loan balance also reduces.
Can I use more than one property as security for my loan?
Yes, you can.
Can I transfer my loan from one property to another?
This is referred to as ‘loan portability’ and it allows you to change the property used as security on your home loan. This is a useful benefit if you’re looking to downsize your home.
What is a split loan?
A split loan allows you to take more than one home loan type. For example, you might want a fixed rate home loan but also enjoy the benefits of a variable loan.
What is redraw?
A redraw facility gives you easy access to any additional repayments you’ve made on your loan without going through a complete application process. If your loan has a redraw facility, you can request access to these funds.