Purchasing a home is not an easy task, especially if you are unaware of the things you need to deal with to acquire a home loan.
The process of home loans in Sydney can be extremely intricate if you are unaware of its contents. It is more than just a loan term and interest rate. If you have a clear understanding of what home loans are about, then you’ll be able to see beyond the surface and benefit from it.
Home loans offer an array of features that you can claim with the help of a finance broker in Sydney. However, with the numerous choices, it is important to determine which feature of a home loan is right for you. Read on to have a better understanding of home loan features to make a well-informed decision.
Extra Repayments
The feature of extra repayments for home loans in Sydney enables you to put extra money into your mortgage repayments along with your regular repayments. The feature helps you to pay off your debt faster, saving you a substantial amount of money over your loan term.
You can avail of this offer from both variable and fixed-rate home loans. However, they are more commonly associated with variable-rate home loans.
There is a limit to how much extra you can pay for your repayments under several fixed-rate home loans. Some lenders may charge additional fees for making extra repayments.
Offset Account
The offset account is connected to your mortgage. It is a transactional account that enables you to decrease the interest paid on the loan you have acquired. The money kept in the offset account is used to pay the principal amount, which is why you are charged less interest.
For example, your offset account has $20,000, and the principal amount you need to pay is $800,000. The amount in your offset account will be subtracted from the principal amount, and the lender will only charge interest on the remaining $780,000.
Redraw facilities
The redraw facility goes along with the extra repayment feature. The feature allows you to withdraw any additional amount you have paid for your home loans in Sydney. You can use the withdrawn amount for any purpose, such as renovation or vehicle upgrades. It is essential to keep in mind that some lenders may charge some fee for redrawing.
Split Home Loan
The split home loan enables you to acquire a part of home loans in Sydney under the variable -rate and the other part under the fixed rate. This option lets you save some bucks as you can experience a portion of both features.
Interest Only
When you acquire a loan, you make the mortgage repayments by paying back the principal amount along with the interest money. However, the interest-only feature allows you to pay only the interest and not the principal amount for an extended period of time. This means that for your mortgage payments, you will only be paying the interest on the amount borrowed and not the actual amount acquired. Most lenders allow you to use this feature for five years; however, depending upon the lender, it can be extended to 10 to 15 years with the help of a finance broker in Sydney.
Your finance broker can give you comprehensive details about everything you need to know about interest-only mortgages.
Repayment Holiday
This feature allows you to take a break or pause your mortgage period for a short period of time, which, depending upon the lender, is usually between three to six months. The feature comes to the rescue when you are experiencing extreme financial problems due to various changes in your life. The repayment holiday policies vary from one lender to another; therefore, it is ideal to have all the information about it with the help of your finance broker in Sydney before using this option. These are the features of home loans in Sydney that you can use to make your repayments easier. Consider these features while conducting a health check for home loans, as they may help you save money and streamline the repayment process.
