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Home Loans

Getting your loan approved is just as important as choosing the right loan.

Most people don't realise how difficult it can be to meet the Lender's strict criteria. Getting help from your True Choice Home Loans Mortgage Analyst / Broker is one way to avoid disappointment.

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Home Loan Features

Redraw Facility

Enables the borrower to have access to the funds that have been paid in excess of your minimum monthly payments required into your home loan account. Subject to the lenders terms and conditions, these excess funds may be withdrawn taking the loan amount back to the agreed limit if so desired. Some lenders place limits on the amounts and frequency of withdrawing these funds and may also impose some fees.

Progressive Draw-down Facility

This is available specifically for construction loans where payments are required at various intervals during the building of a new home or renovation. In most cases the amounts of each drawing will be established at the outset based and scheduled on a fixed price contract. Lenders will often impose strict criteria regarding the amount and number of drawings available under this process. They also may require additional valuations during the construction, which may incur additional costs.

Portability

This allows the borrower to change properties taking your current loan with you.

Eg:- the security supporting the home loan, without the need for repaying the loan in full and taking out a fresh loan therefore saving establishment and stamp duty fees.

There are a number of conditions that may need to be met to make effective use of this feature. Eg:- value of the new property, LVR, timing of settlement, and whether or not mortgage insurance is applicable.

Repayment Holiday

This allows thew borrower to reduce or stop paying home loan repayments if they need to, providing they are ahead of their minimum required repayments. It acts as a safety net in the event of change of financial circumstances. Eg:- change of employment with 3 month gap between jobs.

Parental Leave Payment Deductions

Some lenders will allow reduced monthly repayments for a set period in the event of a borrower having to leave work to have a baby. Eg:- 50% less payments for a period of 6 months.

100% Offset Account

This is a deposit account which is linked to the home loan account on the basis the balance of the money in the deposit account is “SET OFF” with the balance in the loan account. The net result would be the same as if the deposit monies had been put directly off the loan.

Switching Facility

This allows the borrower to change from one loan product type to another loan product with the same lender. Eg:- changing the variable rate to a fixed rate subject to the lenders terms and conditions which may include a fee for this service. The lender may also restrict the number of switches available or the types of products available to switch to.

Combination Loans

ANALOGY:- A car with a tow bar is able to be used with another item. A caravan can be used with another item however a caravan cannot be used in conjunction with a trailer.

These are all different loans that the lender allows to be joined for varying purposes.

Combination:- Different product types for same purpose

Split loan:- Same product type, different purpose.

Top Up Facility

This allows the borrower to re-borrow additional funds without the need to refinance their existing loan. Eg:- extensions or need extra funds. The lender adds more funds to the existing balance and the borrower repays the same loan account.

Reducing Interest

Refers to the calculation of interest based on the outstanding loan balance from time to time during the term of the loan usually on a daily basis. The sooner you repay the loan, the less interest you pay.

Flat Interest rate

Refers to the interest calculated at the beginning of the loan balance for the term of the loan. Eg:- You borrow $1000 @ 10% flat for 5years = $500 interest.

You therefore repay $1500 over 5 years irrespective of the loan balance during the term.