Applying for a Loan
Once you have your deposit and costs organised it is time to start looking at your home loan options.
Preliminary Approval
Getting a preliminary approval before you go house hunting gives you the advantage of knowing the maximum amount
you can borrow. When we take an application from you we will ask for documentary proof of your income, proof of your savings and payment histories on existing loans. Assuming everything goes well, the pre-approval
which is valid for 3 months will only be subject to you finding a property that represents a suitable security for us.
What Type of Loan to Choose
Most commonly borrowers tend to look at variable or fixed rate options. Here are some of the things you may wish to
consider when deciding on your loan:
| Loan Type |
Advantage |
Disadvantage |
| Variable |
Most flexible. You can make extra repayments at any time without penalty. When
interest rates fall, your required payments will decrease. |
When interest rates rise, your minimum
required repayments will also increase. |
|
| Fixed |
Easier to set a budget to. Comforting that if interest rates rise during the fixed term,
your repayments will not. |
Some potential limitations on how much extra you can pay on top of your normal
repayments without incurring a prepayment fee. You don't benefit if interest rates fall during your fixed period.
If you need to break out of a fixed term, you may be liable for economic break costs. |
Next: The Buying Process
