1st Home Buyer loans
First home buyers have certain advantages and benefits as it is their 1st home. The biggest benefit is the reduction in stamp duty. Different states have different offers. In Victoria you get 50% discount when the property purchased is less than $600,000.
Lenders fund construction loans in stages. These are called draw downs. You will need a construction loan when you purchased a vacant land or demolishing existing house and rebuilding. The loan is interest only until the house is been built and will convert to Principal and Interest on completion.
Usually the banks need 2 years financials and 2 years tax returns. However if you haven’t got these up-to-date, you can consider Lo-doc loans.
When buy one property, you can have your loan split into different types of loans. The most common would be Variable and Fixed. You also can have a Lone of Credit with the above. Some lenders have restrictions what could be split.
Parental Guarantor loans
Parents can help their kids to enter the property market without the usual deposit required. This is possible when the parents have enough equity in their property (Usually 20% plus costs). Ideally this should be an Investment property. If the parents have got only their Principal Place of Resident, lenders are reluctant. However, if the parents are still employed and if we could mitigate the risks, we could still use them.
Like Parental Guarantor Loans, some lenders will accept security from a close relative as Security Guarantor. We also use guarantors when 2 or more involved individuals or entities borrow together or when the borrower is a Company / Trust or when the loans is in one name where the security is in joint name (Usually for spouses)
Usually we can lend upto 80% for non-residents. All non-resident lending is subject to FIRB (Foreign Investment Review Board) and since 01/07/2015, there is additional stamp duty applicable. There are special rules applicable. Not all lenders offer these loans.
Foreign income loans
Some lenders accept income derived in foreign currency. Lenders use different ways to determine how to convert these currencies. Usually the income is discounted after converting to AUD.
Variable Rate Loans
The Interest rate of these loans are variable and can fluctuate during the term of the loan
Fixed Rate Loans
The Interest rate of these loans are fixed for a certain period. This gives the certainty to the client as the repayments are fixed for the term. However there will penalties of you pay this off early or close the loan within the fixed term.
Packaged loans usually come with an Offset Account and very flexible. Some lenders waive the annual credit card fee under the package.
SMSF (Self-Managed Super Fund) loans
Self-Managed Super Fund loans are another way to invest in property. This is a specialised loan that needs guidance. If not setup properly, you and your fund could incur penalties. The funds in your super is meant to support your retirement. In a Self-Managed Super, you can combine your family members’ super funds together. Maximum members could be 4, but most of the time it would be you and your partner. The borrowing through SMSF to purchase property is called, “Limited Recourse Borrowing”. Lenders typically lend up to 80% to purchase a residential Investment property under this method. Even though this percentage is usually lower for Commercial purchases, we have lenders who could lend upto 70%. Any properties acquired through SMSF is strictly for investment. There will be severe penalties fir breaches. The only exception to this rule is when you are self-employed and if you purchase a Commercial property, your business can rent the property from the SMSF. There are additional costs involved in setting up a SMSF and maintaining it. You need to setup a trust deed. A corporate trustee is recommended if you intend to borrow. When purchasing properties, you need to setup a separate bare trust with a custodian trustee.
Lo / No doc loans
For self-employed applicants who doesn’t have up-to-date financials. In certain circumstances, we can accept only the Accountant’s letter for 80% lending.
Bad credit loans If you have gone through a life event where you couldn’t keep your commitments or a bill was not paid as a result of moving houses etc, you will be at a disadvantage when you want to borrow, even if you have paid them later. Depending on your situation, we have lenders who could help you out with what you want NOW rather than LATER. These lenders are specialised lenders, and some will lend you whether your debt is paid or unpaid.
Interest Only loans
Interest Only for a certain period. Usually used for Investment Property loans. Construction loans are also interest only until the construction is complete.
Loans to buy House and Land package
Typical in new real estate developments. The builder will package the land and building together.
Loans for off the plan purchase
As the name suggests, you purchase before it’s been built. Usually the apartments and town houses are sold this way. You get stamp duty savings when you buy off the plan.
Company and Trust loans
The borrower is the Company or the trust. The directors of the Company or the trustees of the trust would be guarantors.
The lending market is always changing, so it’s a good idea to check with your broker every few years to see that you have the right loan for your situation. Use your broker to your advantage.
Line Of Credit
These loans are interest only and work similar to an overdraft. You don’t need to make any repayments until you reach the limit of the loan. Usually the interest rate is slightly higher than the standard variable interest rate. Ideal when you build a Property Portfolio and to keep this as the backup purely for investment purpose.
This can be used in place of a deposit. Common use of this would be when you want to purchase the house that you want and your finance or refinance is not ready yet. This is like an insurance guaranteeing the deposit to the Vendor.