Home Loans

It’s a big decision to make, and it doesn’t always come easy.

When choosing a home loan, the important thing is that you take your time, ask the right questions and find a loan that is right for you.

When you consider that you could be spending the next 25 years paying off your loan, it’s important that you have a loan that has the flexibility to suit your lifestyle.

Types of Home Loans

Here’s a few of the more popular types of home loans on offer.

The line of credit loan is probably the most flexible type of loan on the market. It’s a great way to make payments and withdrawals very easily. It allows you to have your income put into your mortgage account that helps to reduce the interest.

The added benefit of having access to your money via credit cards, ATM, chequebook and debit cards is a highly attractive feature of this type of loan. Repayments are also easy to make as your able to access funds easily.

With the so much flexibility, and easy access to your funds there is a word of warning, this loan is not for everyone. It does need to be managed carefully and you will need to exercise a good degree of self-control as you may find yourself going backwards if you’re not careful.

Honeymoon Loan

The honeymoon loan was designed by the lenders to attract new borrowers. They will make a very attractive offer, usually it’s a low interest rate, to the lender of for a short period of time to entice to switch lenders.

The honeymoon period will differ from lender and usually ranges from six months to 12 months after which time the interest rate will then revert to the standard rate being offered by the lender.

As with any type of non-standard loan there are normally additional fees and conditions that apply, so make sure you do your homework.

The standard variable rate loans are very popular as they offer a good level of flexibility. The interest rate determines the repayments that you make. If the interest rates rise you pay more, if they go down you pay less.

Some lenders allow you to redraw funds from your loan, make extra payments if you have some extra cash, and if you are able to pay the loan out early, there’s generally lees fees with these types of loans.

One of the added benefits with these types of loans is that you can be offered a discount on your interest if you are borrowing a large amount of money.