Buying a new home is a big decision and the start of a new chapter in your life. It is a dream that every individual wants to live in their lives. Many people, in the process of making their dream come true, opt for an SMSF home loan broker in Sydney as financial support to buy the home. However, there are several options available for an individual to get a home loan at Key Partners Finance; therefore, knowing which option would suit you best is essential to make the right choice.
Here at Key Partners Finance, we have compiled a list of the most common types of home loans crafted by the best commercial finance brokers in Parramatta for your comprehensive understanding of the options available for you while seeking a home loan.
Fixed Rate Mortgages.
The fixed-rate mortgages lock the interest at the current rate, which means you would have to pay the same interest throughout the loan, and it would be applied to the full balance sanctioned for the loan. You might want to seek this loan during a time of low interest as it may prevent you from the risk of potential rises in interest.
Interest Only Mortgages
This type of loan involves an interest-only period attached to it. It means that in the initial period of the repayment, an individual would only have to cover the interest and do not need to pay the principal amount. This option of loan helps the individuals to recover from the initial cost of the home purchased as they have to repay a reduced payment for a set period. This also means that the time of your loan would increase as you won’t be making full payments initially. In addition to this, your costs may also increase later.
Variable Rate Mortgages
The Reserve Bank Of Australia’s target rate determines the changes subject to the variation of the rates. The lenders might increase the rate in accordance with the target rate; therefore, you might notice fluctuations in the repayment under the variable-rate mortgages. You would also be able to take advantage of the lowered rates set in accordance with RBA’s guidelines and might get to complete the repayment process with low interest. However, you might need to pay high interest if it is the other way around.
Split Rate Loans
The split-rate loan process comprises the components of both variable-rate mortgages and fixed-rate mortgages. This option of home loan offered by the best commercial finance brokers in Parramatta involves a fixed interest rate for some part of the loan term and the rest of the repayment process, including variable rates. You might opt for this option to benefit from the low-interest rate that might occur in the future, as well as the reduced payment period. However, keep in mind that the interest rate might end up increasing, too.
Low Doc-Loans
This option of home loan is especially for first-time home buyers who are not eligible to get a conventional home loan. This is an enticing option for those who are struggling to invest in a property but they may need to make a large deposit in order to qualify for this loan, that too with higher fees.
These are some of the most common types of loans provided by SMSF home loans brokers in Sydney. The type of loan you choose utterly depends on the circumstances as well as your ability to make payments. Therefore, choose the option that would be less of a burden for you and would help you to make payments easily. Contact Key Partners Finance today and step into the home of your dreams.
