What are the Types of Home Loans in Australia?
When you shop around for home loans in Australia, you’ll notice that there are different types of loans. Each has their own set of features, benefits and limitations.
With hundreds of bank and non-bank lenders, the options can be overwhelming.
Plus, the loan market is constantly changing. A potential lender for you today might not be the most suitable choice for you in a few months.
Shop Your Own Mortgage makes it easy for you to look around the choices available and select one that is best for your circumstances and needs.
Our home loan specialists will conduct an initial assessment of your loan needs and then tap our network of Australian home loan providers.
Almost instantly, you’ll have a shortlist of recommended home loan deals that are matching your criteria.
Which Type of Home Loans Should I Choose?
Your needs or circumstances are good references to guide you which type of home loan you choose.Check out these home loans available for Australian borrowers:
- No Deposit Loans: You may qualify for a home loan even without the usual money needed for deposit or downpayment.
- Bad Credit Loans: Bad credit loans are typically offered by non-conforming lenders, which means they don’t conform to the traditional criteria of using credit score whether to approve or deny the loan application.
- Self-Employed Loans: Most lenders favor loan applicants who have steady income from regular employment. For individuals who have variable monthly income sourced out from professional practice or business, self-employed loans are available.
- Guarantor Loans: Also known as a family guarantee loan, this home loan is often approved if the applicant can identify a family member who can vouch for the home purchase.
- Non-Resident Loans: This is available for foreign nationals, expats, and temporary residents who need a loan to buy a home or investment property in Sydney.
- Fixed Rate Loans: With a fixed rate loan, you can lock in the interest rate for the loan duration, so you can avoid possible rate increases in the future.
- Low Doc Loans: The paperwork involved in loan applications can be staggering. If you are self employed and struggling to submit all the tax returns and financials for a loan, you may try low doc loans instead.
- Home Equity Loans: This is often an additional loan account to that of your main home loan, in which you unlock the equity of your property and convert it into the amount you wish to borrow.
- Trust Loans: Some banks or credit unions are granting loans to a trustee under specific circumstances and criteria.
Types of Collateral For Loans
Most mortgage lenders in Australia will ask for a collateral (security), which is a valuable asset that you pledge to transfer ownership to the lender in case you fail to pay the loan on time.Adding a collateral to a loan may provide you some benefits such as lower risk profile, favourable interest rates, or waived fees.The top loan collateral types in Australia are the following:
- Owner occupied real estate
- Investment property
The most common property types that lenders take as security for mortgages include houses, units, townhouses, villas, duplexes, and vacant land.Sometimes mortgage lenders will accept other types of collateral in certain circumstances. These may include:
- Term deposit
- Share portfolios
Let Us Help You Choose Your Home Loan
Each type of home loan has its own pros and cons.
You also need to read and understand every set of terms, policies, and processes for every loan you are considering.
This usually takes some time and energy, so many Australians work with a mortgage broker loan expert.
Shop Your Own Mortgage can help you understand your options, match you with the best loan provider, submit the loan application on your behalf and guide you through the complex process.
For assistance, you may call Shop Your Own Mortgage on 1 300 256 081 or send an email to email@example.com