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Posted by on in Australian mortgages

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Hundreds. The key is finding the one that is the right one for you. If you don’t know a lot about the mortgage market you might decide to go with a basic home loan but the loan type and the rate will vary depending on the loan amount and contribution and this is why it's best to speak to a qualified mortgage broker. Here we look at just some of the more common home loan & mortgage options on offer today:

• Basic home loan

• Honeymoon loan

• Standard variable rate loan

• Redraw facility

• 100% loan Basic home loan

A basic home loan offers a low but variable interest rate and few or no regular fees. However, there is also limited flexibility. e.g. you may not be able to pay off extra if you get a windfall, or vary your repayments. These loans are normally taken for loans lower than $250,000

A honeymoon rate offers a very low interest rate for an introductory period – generally 12 months. Once the “honeymoon” is over, the interest rate reverts to the higher variable rate . You need to consider the cost of the loan over more than just the honeymoon period, and if any fees are incurred if you refinance after the honeymoon period.You really need to know the revert options on this type of loan.

A standard variable rate loan is a loan product that generally allows you to choose many “bells and whistles”. e.g. a redraw facility, an all-in-one account facility, linked accounts and credit cards etc. Consider the features you need carefully with your Mortgage Broker. These loans under the banks package are probably the most common type of offering as the banks try to win all of your business from credit cards to insurances.

A redraw facility lets you pay off more of your home loan but still allows access to those extra funds if you need to. There wcould well be aminimumredraw amount, it is important to know the amount if keeping all surplus cash in your loan is important to you. There will also typically be a fee for every time you redraw.

A no deposit home loan or 100% home loan is where you borrow 100% of the purchase price of the property. While this sounds like you don’t need a deposit, most institutions will require you to have saved 3% of the purchase price. This amount is often then used to cover lender mortgage insurance.

You also need to have saved for all the associated costs of buying a home.Now which loan is right for you? These mortgage options are just the tip of the iceberg. With this vast choice, how do you know which loan is most appropriate for you? By talking to CBM Mortgages about finding out the best options for you. CBM Mortgages also have a great smartphone and ipad app which can help you search for property and calculate your repayments, click on the icons on the top of the screen.

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Be nice to your parents.

If you can't save a deposit to get a mortgage or home loan by yourself, maybe your parents, a relative or friend can help with a gift, loan, or home loan guarantee. This could also save you money in lenders mortgage insurance premiums.

Financial help with home loans – parental gifts

Obviously, the best kind of loan is one you don't have to pay back. If someone is willing to give you money to help you buy a home – and doesn't expect it to be repaid – you're very fortunate. But make sure you get it documented. Otherwise your lender will consider it a loan that has to be repaid and therefore you will have a liability to repay that loan back as well and this will impact on your borrowing capacity.

Financial help with home loans – parental loans

Your parents might be able to help you with a deposit for a home loan – but they probably want it repaid. Bad luck. Still, this could be a big help, particularly if they are offering the money at a favourable interest rate. Again, you should have the parental loan documented because your lender will want to know the details in order to calaculate your borrowing capacity.

Financial help with home loans – parental guarantees

Your parents mightn't have any spare cash, but they might be able to help you by going guarantor on your loan. For example, most parents have equity built up in their own home that a lender would consider as security – if your parents were agreeable. However, your parents should be aware that going guarantor on your loan will affect their borrowing capacity, and possibly their retirement lifestyle. To learn more about parental loans and guarantees contact CBM Mortgages today.

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Are you saving for a home? If you haven’t met with an accredited mortgage broker yet, it may cost you. Here’s why.

 

When saving a deposit to buy a home, many people have a goal amount in mind that they need to save before they meet with a mortgage adviser who will help them secure the finance.

 

If this is you, you’re probably doing it wrongly. From day one, when you first think, ‘I could maybe buy a house if I worked hard and saved a lot’, you’re ready to have a credit adviser on your side.

 

A mortgage broker's knowledge of the loan and property market will help you work out how much you will be able to borrow, which determines the size of the deposit you will need to save.

 

They will also be able to help you develop processes and a realistic timeline to save your deposit faster, and provide creative solutions that will help reach your goals sooner.

 

You may also be pleasantly surprised to find that you are closer to your goal than you thought. The tools available to a mortgage broker that can help you realise your dreams more quickly and efficiently include lender’s mortgage insurance, specialist lending products, land loans and, for investors predicting significant rises in property prices, interest-only loans.

 

More importantly than just being allowed to provide these products, an MFAA Approved mortgage broker can help you work out whether they suit your situation and goals. For example, while buying land now to build on later lowers the cost of your initial investment and can be an opportunity to take advantage of reduced land prices, there is no point in it if you will not be able to secure construction finance down the track.

 

So speak to an expert now. CBM Mortgages have access to a wide range of products and can help you save money in comparison to going straight to your bank. we can help you take the first steps to owning your home. Contact us today

 

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