Get the right information and advise for your home loans
There are various ways to borrow money. The choice you make affects how much you can borrow as well as the types of loans you can apply for. New home loan products are emerging rapidly in the market. Mortgage Consultants at PJ Home Loans can help you find a loan and professionally package it so that it suits your particular needs.
Generally people borrow money on their own or with a partner. There are also other ways to borrow money which can give you the flexibility you need to be able to buy the property you want. These include Property Share (purchase with friends and keep your finance separate) or Guarantor Support and Low Documentation loans for self-employed people.
Variable Rate
Standard variable loans are one of the most popular home loans in Australia. Interest rates can go up or down over the life off the loan depending on the official rate set by the Reserve Bank of Australia and funding costs. Your regular loan repayments pay off both the interest and some of the principal. With Standard Variable Rate Loans, you are allowed to make extra repayments. Even small extra payments can cut the length and cost of your mortgage significantly.
One of the disadvantages of having a variable rate home loan is increased loan repayments due to rate rises could impact your household budget. You can also choose a basic variable loan, which offers a discounted interest rate but has fewer loan features, such as a redraw facility and repayment flexibility.
Fixed Rate
With Fixed Rate Home Loans, the interest rate is fixed for a certain period, usually the first one to five years of the loan. This means your regular repayments stay the same regardless of changes in interest rates. At the end of the fixed period, you can either fix the rate again, at whatever rate your lenders are offering at the time, or move to a variable loan. See our Guides and Tips section to compare the Pros and Cons of Fixed Rate Loans.
Split Rate Loans
Many customers opt for Split Rate Loans where your loan amount is split, so one part is variable, and the other is fixed. Customers get the flexibility on choosing the proportion of variable and fixed. The good part about Split Rate Loans is that you enjoy some of the flexibility of a variable loan along with the certainty of a fixed rate loan.
With Interest Only Loans customers need to repay only the interest on the amount borrowed usually for the first one to five years of the loan, although some lenders offer longer terms. Your monthly repayments are lower since you are not also paying off the principal. At the end of the interest-only period, you begin to pay off both interest and principal. These loans are especially popular with investors who plan to pay off the principal when the property is sold, having achieved capital growth. Our Tips and Guides section will give you a good idea of the Pros and Cons of Interest Only loans.
Line Of Credit
With Line of Credit Loans, you can pay into and withdraw from your home loan every month, so long as you keep up the regular required repayments. Many people choose to have their salary paid into their Line of Credit account. With Line of Credit Loans, you can use your income to help reduce interest charges and pay off your mortgage quickly. This type of loan is good for people who want maximum flexibility in their access to funds. One of the disadvantages of Line of Credit Loans are, they usually carry slightly higher interest rates.
Introductory/Honeymoon
Introductory loans offer a discounted interest rate for the first 6 to 12 months, before the rate reverts to the usual variable interest rate. This product was originally designed for first-home buyers, but now available more widely to many types of loans. Most of the lenders offers Introductory/Honeymoon loans, so that customers get lower regular repayments in the initial period to avoid financial burden.
Low Doc
Low Doc Loans are popular with self-employed people. These loans require less documentation but often carry higher interest rates or require a larger deposit because of the perceived higher lender risk. In most cases you will be financially better off getting together full documentation for another type of loan. But if this isn’t possible, a low doc loan may be your best opportunity to borrow money.
Learn about the loan process involved in buying a home.
1 Initial Interview
This is the first meeting with the client to seek their goals, requirements and purpose for the loan. From the information provided by the clients, PJ Home Loans will discuss the options with the client and find a suitable lender to meet their needs.
2 Estimated Timeframe of lodgement
Your loan application will be lodged with the lender within 24 hours of receiving of ALL required supporting documents and application forms as requested.
3 Conditional Approval
Estimated Timeframe 2-3 days.
Since we lodge on your behalf, the lender will send PJ Homeloans a conditional approval letter once it has been conditionally approved. Upon conditional approval, property valuation(s) will be ordered by the lender (if required).
4 Valuation Reports
Estimated Timeframe 3 days.
Valuation report(s) will be received by the lender within 3 days of request. (subject to property access).
5 Unconditional (full) Approval
Estimated Timeframe 2 days.
We will receive unconditional approval from the lender within 2 days from receipt of their satisfactory valuation(s). We will then contact you to confirm the unconditional approval.
6 Mortgage Documents
Estimated Timeframe 5-10 days.
The lender will send a copy of the mortgage documents to you or the nominated party within 5 days of unconditional approval. You will receive instructions on how to handle the documents.
7 Loan Settlement
Estimated Timeframe 2-10 days.
Purchasing a property
Between 2-3 days after you have returned your mortgage documents your solicitor/conveyancer will contact the lender to book settlement.
Refinancing
Between 2-3 days after you have returned your mortgage documents the lender will liaise directly with your existing lender (if different) to arrange your property refinance.
8 Congratulations
Congratulations! Settlement has been booked and your loan is in place.
*Please note, time frames are subject to variation based upon the lender selected, the valuer commissioned and/or the complexity of the loan application.
There is a list of documents required in order to process and approve your home loan. Make sure you bring the documents below to your meeting with your mortgage consultant to help fast-track your loan application. This is a general checklist, so some of the documents may not apply to you. Our Mortgage consultant will confirm which documents you need based on your home loan type. All documents can be copies unless stated otherwise.
Identification
100 points ID is required for all types of home loans.
| Identity Documetation | Points |
|---|---|
| Current Passport | 70 |
| Birth Certificate | 70 |
| Citizenship Certificate | 70 |
| Drivers Licence | 40 |
| Rates Notice | 35 |
| Medicare Card | 25 |
| Rates Notice | 35 |
Other documents that help build up 100 points include: Credit cards, ATM/Debit cards, Pensioner Concession card, Health Care card, Electricity/Gas/Telephone/Water Bills, Tertiary Student ID card, Letter from Employer etc. Consult with your mortgage consultant to see the points for each identity document.
Income Details
These documentation is based on your income status.
If you earn a wage or salary
OR any of the following
If you are self employed
If your Tax Returns and Notice of Assessments are greater than 24 months old, you must still provide them along with either one of the following
If you are applying for a Low Documentation Loan you will need:
If you earn Rental Income
One of the following
If you receive Government Income (eg: Centerlink and/or Veteran Affairs)
Your latest government advise letter which shows your income/benefit (less than 90 days old)
Additional Documents For Borrowers Seeking A Construction Loan
Additional Documents If You Already Own A Home
Additional Documents For First Home Buyers
Additional Documents For Investors
Additional Documents For Refinancing
If you don’t owe anything on your credit card, the most recent statement.
See the most frequently asked questions about home loans for your property purchase.
How much deposit do you I need?
The deposit required depends on the type of loan facility you choose. A deposit for a home is usually between 5% – 10% of the purchase price or valuation (whichever is the lesser) of the property, which you pay when signing a Contract of Sale.
How often do I make home loan repayments – weekly, fortnightly or monthly?
Most lenders offer flexible repayment options to suit your needs. Aim for weekly or fortnightly repayments, instead of monthly, as you will make more payments in a year, which will shave dollars and duration off your loan.
How do I choose the loan that’s right for me?
New home loan products are emerging rapidly in the market. Mortgage Consultants at PJ Home Loans can help you find a loan and professionally package it so that it suits your particular needs.
How long does settlement take?
The length of time between exchange of contracts and settlement varies. It normally ranges from four to six weeks. Settlement time is normally dictated by the seller and the lender, but is negotiated with the buyer.
What fees/costs should I budget for?
There are a number of fees involved when buying a property. To avoid any surprises, the list below sets out all of the usual costs:
How is interest calculated?