Hello!

110 Comments

Home loans…
All you need to know for mum’s on the go!

As kids we spent endless hours in our cubby houses, scrubbing dishes in our mini plastic sinks and pouring pretend cups of tea for our visitors. We loved our houses; we were proud to show them off to our friends. It’s no surprise then that one of the biggest achievements in our adult lives is to own our own homes, to break the rental spell and take the plunge into the home loan abyss.

Finding the right home is the fun part, but the prospect of finding the right mortgage can be daunting and confusing. Here we’ve covered the basics – in easy speak! – of what you need to know and look out for when it comes to getting the right home loan.

The basics

A home loan is a loan advanced to a person to assist in buying a house. Unless you were lucky enough to win big on the lotto, or have been saving your hard earned wages since you got your first Saturday job, it’s more than likely that you will require financial help when it comes to buying a house.

When bringing up a family it’s important to know where your dollars are being spent and even more vital to know where and how to find the cheapest home loan for your needs. Remember a home loan is a long term commitment (kind of like kids!) so a difference between a home loan rate of 5.9% and 6% can impact you by tens of thousands of dollars over 25 to 30 years. 

Fixed rate vs. variable rate

When applying for your home loan you will have to choose either a fixed rate loan or a variable rate home loan.

The interest rate for a variable loan will vary over time as it is dependent upon decisions made by the Reserve Bank of Australia. Interest rate fluctuations in the mortgage market determine how much you must pay back each month, so that can make the household budget tough to manage if interest rates suddenly rise.

A fixed rate loan is a loan that is taken out for a set number of years, most commonly between 1 to 5 years where the interest rate is set (fixed) and does not fluctuate with any changes in the financial market. This allows you to know and budget for your set monthly mortgage repayments, but fixed rate loans can come with less flexibility and on stricter terms than variable rate loans.

Related: Fixed vs. Variable, the difference explained

Interest only vs. principal plus interest

This has to do with monthly repayments. Choose an interest only home loan and you will only pay the interest portion of the loan to the bank, forever. You will never pay back the amount you actually borrowed. Kind of like when you get your credit card bill and you only pay the minimum required and the debt rolls over into the next month.

Unless you’re in the property market a short term capital gain, most residential home loan owners choose to pay their loans on a principal plus interest basis, which means each month you are paying back a portion of the actual loan value as well as the interest component. This is the only way you’ll pay back your loan in the long term.

How to find the best loan for you?

When trying to find the cheapest loan on the market the best place to start is online. More specifically, an online comparison website like Moneyhound.com.au so that the information is current, clear and concise. Moneyhound’s home loan finder tool requires you to specify how much you need to borrow, the term you want to take the loan out for (up to 30 years) and the repayment type (whether you wish to pay the interest only, or both the principle amount plus the interest). You will then be presented with the results of your search, showing the interest rates of the loans that match your requirements.

Finding the right loan for you then requires you to factor in the interest rate, upfront fees and yearly service fees, combined with the benefits that the home loan offers.

Making additional payments

As well finding the lowest rate loan to save money on interest, another way to reduce the total cost of your loan over its lifetime is to make additional payments. You may want to make extra payments after an inheritance or a bonus from work. Even something as simple as your standard pay rise could leave you in a position to make additional payments. Some loans won’t allow this so make sure you specify this when choosing the loan. 

Redraw facility

After years of making additional repayments, there may come a time when you need to access those additional funds and if your loan allows for this it is called a ‘redraw’. For example, if your minimum home loan payment each month is $1000 for 12 months, but you pay $1500 each month, a loan with a redraw facility will enable you to redraw the $6000 at a later date.

You might look at this feature as a cheeky way to put money aside for a rainy day, the next family holiday, school fees, etc. Be aware that this feature might incur a fee.

Is your loan portable?

You might not want to live in the first house you buy for the number of years you took your loan out for. Just because your home loan is long term doesn’t mean you have to stay in the same house or suffer exit fees and new application fees every time you want to move house. Do your research to see if your home loan is ‘portable’, which means being able to transfer your home loan from one property to the next without incurring any refinancing fees.

Offset accounts

An offset account can save you thousands of dollars in interest over time, so look out for home loans with a 100 per cent offset account feature. With an offset account you can use your savings to reduce the total loan amount on which your interest is calculated. You could start by sending your wage directly into your chosen account. This way, the money you earn is immediately reducing the interest you pay on your home loan – even if you end up spending that money over the cycle of a month.

Related: How an offset account can save you thousands

Home loans for single parents

A recent census by ABS revealed that one in six Australian families are single parent families. Families of 2.4 children will often feel the financial strain of day to day life, so it’s easy to understand that this would only intensify when the family is headed by only one parent.

Single parents will often be put off of buying as the ratio of expenses to income is often much higher. Some ideas to overcome this drawback would be to consider buying with a trusted friend or family member. With a secure income and the security of having someone to help out, this might make the borrowing process a lot less stressful. Having a large deposit will also help single parent families with buying property, as the higher the deposit, the lower the loan amount you request. Single parents should also research the types of governmental benefits that the banks consider to be income, as this will all help contribute to them being granted a home loan.

Switching to another home loan

If you’ve already got a home loan you are not locked in! You can shop around and you can switch banks. The fees to do this might be minimal compared to the savings you could make in the long term. According to new banking reform laws, any home loan taken out after 1st July 2011 will not require the borrower to pay an exit fee.

With so many options and benefits available, make sure you do your research so that you know you are getting the best deal. A little bit of work can go a long way, and can set you and your family up for the future.

Written by Hannah Collins, Yahoo!7 Moneyhound – Fetching you a better deal.
Moneyhound.com.au is a price comparison site that can help you save money across all your monthly bills. Try it now, it’s free.

Looking for more ways to save?

 

  • DO YOU NEED %100 LOAN FINANCE FREE?

    CHEVRON FINANCE FIRM is a branch of CHEVRON COMPANY that offer loans to individual and public sector that are in need of financial Assistance in a low interest rate of 2%. Bad credit acceptable, The Terms and Conditions are very simple and considerate. You will never regret anything in this loan transaction because we will make you smile. Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their upstart. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations. I want you to understand the fact that CHEVRON FINANCE FIRM is out to help the less financial privilege get back on track by providing all type of loans to them (E.G) mortgages, home loans business loans and bad credit loans commercial loans, start-up working capital loans, construction loans, car loans, hotel loans, and student loans, personal loans, Debts Consolidation Loans, what are you waiting for, why don’t you try. CHEVRON FINANCE FIRM is home and be free from debts any interested. Write us via
    Email: chevronfinancefirm@gmail.com
    Office line: +1-202-381-1907

    Reply

  • This is the opportunity you have been searching for to obtain an easy qualifying business or personal project finance this season. I am Juan Carlos financier associates and i am specialized in project finance for individuals, companies, business and organization. If interested contact us for more INFO. Approval is quick and easy – no credit check. financeabilityltd@gmail.com

    Reply

  • Hello, my name is Rhonda Campbell from Dayton TX, and I am happily married with family. For some months now I have suffered financial setback and needed to refinance as my bills were long due for payment. I tried seeking loans from various loan firms both corporate and private but all without success, the banks I visited all declined my credit. But as God would favor me, I was introduced to Turkey Finans Bank a GOD FEARING FIRM for their Xmas loan program, with contact number +1(984) 213-1994 a Private limited Company with Share Capital, and I was granted a personal business & Xmas loan sum of $150,000.00 on the 8th of November 2017. Today my financial status is restored and my business is now stabilized. Thanks Katelyn for introducing me to Turkey Finans Bank, and to you Mr Stephen Williams for helping me. He is a good and God fearing man and I pray that God richly bless him for helping me. My advice to everyone out there in need of a loan of any kind is to quickly Contact via E_mail: {tuerkiyefinansbank@linuxmail.org} or {tuerkiyefinansbank@gmail.com)

    Reply

  • this is good advice and i will think hard about getting the right home loan for my family, in the first place

    Reply

  • DO YOU NEED AN AFFORDABLE BUSINESS LOAN OR XMAS LOAN TODAY?

    We have provided over $20 Billion in business loans to over 30,000 business owners just like you. We use our own designated risk technology to provide you with the right business loan so you can grow your business. Our services are fast and reliable, loans are approved within 24 hours of successful application. We offer loans from a minimum range of $10,000 to a maximum of $1 Billion.

    Do you find yourself in a bit of trouble with unpaid bills and don’t know which way to go or where to turn? What about finding a reputable Debt Consolidation firm that can assist you in reducing monthly installment so that you will have affordable repayment options as well as room to breathe when it comes to the end of the month and bills need to get paid? Dr. Vasquez Reynolds Loan Home is the answer. Reduce your payments to ease the
    strain on your monthly expenses. Email (vasquezreynoldsloanhome@gmail.com)

    Our services include the following:

    *Truck Loans
    * Personal Loans
    * Debt consolidation loans
    * Car Loans
    * Business Loans
    * Education Loans
    * Mortgage
    *Refinancing Loans
    *Property Purchase loans
    * Home Loans

    We give you loan with a low interest rate of 2% and loan duration of 1 to 30 years to pay back the loan (secure and unsecured). Do not keep your financial problems to yourself in order for you not to be debt master or financial stress up NOTE:Bear in mind that it will only take less than 24 Hours to process your file is 100% Guaranteed no matter your Credit Score.We are certified and your privacy is 100% safe with us. Worry no more about
    your loans or finances.

    Yours Sincerely,
    Dr. Vasquez Reynolds
    +1 (619)473-5227

    Get your instant loan approval

    Reply

  • Do you need Finance?
    Are you looking for Finance?
    Are you looking for a money to enlarge your business?
    We help individuals and companies to obtain loan for business
    expanding and to setup a new business ranging any amount. Get a loan at affordable interest rate of 3%, Do you need this cash/loan for business and to clear your bills? Then send us an email now for more information contact us now via Email:maxcreditfinance@googlemail.com

    Reply

  • Do you wish to expand your business or in need of financial support to start up a new business? Or for any reason, how much are you seeking for? We give out financial support to individuals, corporate bodies, and companies firms all over the world who need to update their financial status with an affordable interest rate as Low as 3%. you can contact us now for more information through our office Email: mohammadloanservice@gmail.com minimum documents required with simple procedures, fast processing and loan disbursed but for genuine customers only.

    Reply

  • Excellent! Really good knowledge to know! Thanks for sharing this!

    Reply

  • Hello Every One, I am Mrs Anais Harvey From Texas U.S.A, I quickly want to use this medium to shear a testimony on how God directed me to a Legit and real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $5,200 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains, then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr William who is the C.E.O of WILLIAM LOAN INVESTMENTS LIMITED So i applied for a loan sum of (320,000.00USD) with low interest rate of 2%, so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than two(2) days the loan was deposited into my bank so i want to advice any one in need of a loan to quickly contact him via: (williamqueen_ltd@hotmail.com) he does not know am doing this i pray that God will bless him for the good things he has done in my life.

    Reply

  • Thanks, this is an interesting article and one I will certainly come back to.

    Reply

  • Thank you for the intersting article. Will definately have a look on line and compare the interest rates. Hoping to refinance in the middle of the year once we are able to get out of our locked contract.

    Reply

  • Do you need a fast and easy loan? I am Mr Jonna, the C.E.O of Jonna Finance Loan Company, I am to let you know that this is a lending firm that gives out loans at an interest rate of 2% to people/business organizations who are in need of money. I want you to know that your loan amount will be granted to you. We offer all kinds of Loans to serious minded persons who are in need of financial assistance. To get the loan procedures started, send to us the following details:-email: jonnafinance@outlook.com

    Loan Application details

    Borrower’s Full Names:……….
    Address:………….
    Occupation:……..
    Sex:…………..
    Age…………..
    Phone number:…….
    Monthly Income:………….
    Country:………………………….
    City…………………..
    Purpose of Loan………..
    Amount Needed……………..
    Loan Duration…………………..
    Have You Applied For A Loan Before:……………..

    Once we receive these information, we would start with the processing of your loan immediately.

    Thanks,
    Mr.Jonna
    Email:jonnafinance@outlook.com

    Reply

  • Dear Loan Seekers,
    We are Cheng Loans Finance! We offer loans to Individual & Companies in need of financial assistance (Loan) at 2% interest rate for the duration of 1 to 25 years. Do you need a loan without stress or delay? Have you been turn down by your local banks? We offer International & Local Loans to interested clients for the amount of $5,000 USD to $100,000,000 USD OR (EUR, GBP, KWD, SGD, MYR), apply with us and get your loan approved without stress: Interested person should contact us via E-mails: {chengloansfinance@yahoo.com.sg} OR {gohcheng444@gmail.com}

    Reply

  • Do you need a loan?? Are you in need of a loan to start up a business?? Do you have a business and you need a loan for business enlargement?? Are you in any financial mess and you need a loan??? Do you need a loan to clear your debts?? Whatever your loan problems might be, here comes your help as we offer loans at low and affordable interest rate. Contact us today at century.kredit@hotmail.com for more details.

    Reply

  • TESTIMONY ON HOW I GOT MY LOAN FROM A GENUINE LOAN COMPANY

    My name is Kathrine Lisa, i am from Chicago USA, I am a widow at the moment with three kids and i was stuck in a financial situation in June 2014 and i needed to refinance and pay my bills. I tried seeking loans from various loan firms both private and corporate and banks but never with success, and most banks declined my credit. But as God would have it, I was introduced to this wonderful man of God a private loan lender who gave me a loan of $75,000USD and today am a business owner and my kids are doing well at the moment, if you must contact any firm with reference to securing a loan without collateral , no credit check, no co signer with just 3% interest rate and better repayment plans and schedule, please contact Mr Kim Halyard.

    He doesn’t know that am doing this but am so happy now and i decided to let people know more about him and also i want God to bless him more. You can contact him through his email: { kiminvestmentltd001@hotmail.com }

    Reply

Post a comment
Like Facebook page

LIKE MoM on Facebook

Please enter your comment below
Would you like to include a photo?
No picture uploaded yet.
Please wait to see your image preview here before hitting the submit button.
Your MoM account


Lost your password?

Enter your email and a password below to post your comment and join MoM:

You May Like

Loading…

Looks like this may be blocked by you browser or content filtering.

↥ Back to top

Thanks For Your Star Rating!

Would you like to add a written rating or just a star rating?

Write A Rating Just A Star Rating
Join