Seeking out all the available financing options for buying a home in Australia? There are a number of ways you can go about raising the money required to purchase a house here.
Below, we will discuss several options that will get you out of your rental loft and through the door of your first home.
Honeymoon loans
New to the housing market, and having a hard time finding an arrangement that will allow you and your partner to purchase your first home in a sustainable manner?
If you find yourself in this situation, taking a honeymoon loan is a great option, as it gets you in the door of your first house quickly.
Don’t be lulled into complacency though, as the introductory low rate reverts to a standard mortgage rate after a period lasting roughly 12 months.
The real power of accepting a honeymoon loan is that you get to make payments at a level that is above the minimum required payment for the first year of your mortgage, thereby allowing you to build up equity in your property that much quicker than if you were to accept a standard loan.
Variable rate home loans
If you find yourself qualifying for standard mortgages however, there are two options that are the most popular among home buyers.
The first of these is the variable rate home loan, which charges the mortgage holder an interest rate that can vary from quarter to quarter.
This product is a favorable one for home buyers that expect a deflationary environment with respect to interest rates.
However, when you take out variable rate home loans from NPBS, you need to be certain that there aren’t any economic storm clouds on the horizon that would lead to a dramatic increase in interest rates.
Having said that, mortgage interest rates generally are stable over long periods of time, with minor fluctuations up and down being the only movements that occur over a generation.
Fixed rate home loans
If you are looking for cost certainty though, then signing up for a fixed rate home loan is the best way to proceed.
While you definitely run the risk of missing out on interest rate declines if you sign up during times when rates are historically high, being able to pencil in a specific payment every month until the end of your loan makes managing your finances a much easier task.
For those that seek predictability, this is the best move overall.
Low-doc loans
Are you a self-employed individual that is having trouble securing a traditional loan? If you find yourself in this predicament, then seeking out a financial institution that will get you a low-doc loan should be your top priority.
While this type of loan requires you to certify your income through a letter of verification from an accountant, pay higher interest rates, and sign up for a mortgage insurance policy, thinking of this type of loan will free you from the endless frustration of being locked out of the traditional home buying process.