If you are a homeowner, a property investor or a business, we can help you secure a loan from one of our 30+ lender-options available on our panel of lenders. From basic and standard home loans to fixed or variable interest rate loans, we can help you choose the one that is most suitable to your needs.
First-time home buyers:
Entering the property market for the first time can be intimidating. However, it doesn’t need to be and, with a partner who can hold your hand through the process, the experience will be a lot less stressful and even exciting. Blutin Finance can take you through everything you need to know about the process, including the government benefits for first-time home buyers. we’ll help you complete the documents for the First Home Owner Grand (FHOG) and Stamp Duty Exemption. We’ll also help you understand the minimum deposit you will need to put down, the size of the loan you qualify for and how much your monthly repayments are. You can rely on us to make the journey from applying for a loan to walking through the front door of your new home a pleasurable one.
Investment property loans:
Ready to take the plunge and buy an investment property? Or you are looking for your next investment property to purchase? Blutin Finance will help you find a home loan that makes your investment aspirations a reality. We’ll take you through all the things you need to consider when raising finance for an investment property, including affordability, mortgage costs, interest rates, different loan options, and loan structure. One of the critical considerations is the ideal Loan to Value Ratio (LVR), which we explore below.
Loan to Value Ratio (LVR):
The LVR is the percentage of a property’s purchase price that a lender will let you borrow – and thus the deposit you will need to put down.
Typically, if you borrow more than 80% LVR (that is, you have to put down a deposit of less than 20%), you will need to pay Lender’s Mortgage Insurance (LMI). This protects the lender – not you – if you default on your loan.
A lower LVR typically exposes lenders to less risk and gives you a better chance of qualifying for lower interest rates. For example, if you buy a property for $600,000 and need to raise a loan of $420,000 to purchase it, your LVR will be 0.7 or 70%.
We can help you calculate your LVR and work out the total deposit you’ll need to secure a loan for your investment property.
Types of Home Loans
Basic Home Loans:
A Basic Home Loan is a home loan that has no bells and whistles but offers you a preferential interest rate. Less well known than a Standard Variable home loan, it is cheaper and reduces the monthly interest rates you will need to pay. This allows you to pay your home loan off more quickly.
Basic home loans may be well-suited to first home buyers. The interest rates can be half to 1.5 percentage points below standard variable home loan rates. The lender usually charges lower ongoing monthly fees. However, these lower costs come with less flexibility. A basic home loan doesn’t offer the extra features available on a standard variable loan, including switching loans or paying the loan off sooner. Some backs do allow you to pay for these features. Blutin Finance can help you make an informed choice by taking you through all the features and deciding which type of loan works best for you.
Basic home loans in a nutshell:
⦁ More affordable
⦁ Discounted interest rates
⦁ Lower ongoing costs
⦁ No frills loan
⦁ Usually better suited for owner occupied borrowers
Fixed rate home loans:
In a rising interest rate cycle, a variable interest rate home loan could soon become unaffordable if you are on a tight budget. That makes a fixed rate home loan worth considering. While it is challenging to predict what interest rates will do next, a fixed rate loan does give you the security of knowing how much you will need to pay each month. Rates are fixed for a certain period, usually from one to five years. Thereafter you can decide whether to shift to a variable rate home loan or to continue on a fixed-rate basis.
Benefits – and costs – of a fixed rate home loan:
When you opt to take up a fixed rate home loan, you will know exactly how much your monthly repayments are over the fixed period of time. You will never have to worry about the impact higher interest rates could have on your pocket. The downside is that if interest rates decline, you will continue to pay the higher interest rate at which you fixed your loan. Also, a fixed rate loan may be less flexible. You may not be able to additional payments or pay your loan off early without incurring extra fees.
When should you Time to take out a fixed rate home loan?
It is difficult to know when it is the best time to fix your home loan rate. However, it does help to have a basic understanding of the general economic conditions and how these are affecting interest rate moves before deciding on whether it is a good time to fix your home loan rate. So read the financial news and consult the experts. It is worth bearing in mind that it isn’t possible for you, or even the most highly regarded economist, to predict when interest rates will rise. You can always opt to fix the rate for a relatively short period, say one year. If interest rates do decline instead of rise, you would not be tied into a higher, fixed-rate monthly payment for too long.
Fixed rate home loans in a nutshell:
⦁ Monthly repayments remain the same for the period of the fixed term
⦁ Fixed interest rate
⦁ Hefty exit fees
⦁ Less flexible features
⦁ Limited extra repayments and redraw options
Standard Variable Home Loans:
Most home loan applicants take out standard variable rate home loans because they offer an attractive combination of affordability, flexibility, and features. These loans allow you to make extra payments, redraw the additional repayments from the mortgage and refinancing by changing lenders or loans before your mortgage is repaid.
Standard Variable home loans in a nutshell:
⦁ Can make additional lump sum payments
⦁ More flexibility on your repayment
⦁ Extra features are available such as Redraw and Offset facilities
⦁ Ability to split the loan
⦁ Can have Portability feature
⦁ Higher interest rates
⦁ You may have to take up a Package with a monthly fee
Credit Impaired/Non-Conforming Home Loan:
Are you credit impaired or do you find it challenging to get a home loan because you are in an unconventional occupation? Non-conforming loans, as they are known, have become far easier to access as the number of lenders offering them has increased over the past decade. So, if you have an impaired credit history, earn an irregular income or are retired, there is still a good chance you will be able to get a home loan.
Non-conforming loans have all the traditional features of conventional home loans. However, lenders tend to charge higher interest rates and/or fees given their higher risk exposure. You are also likely to need to put down a bigger deposit, and the home loan features may be less flexible than standard home loans. Nevertheless, you will be able to choose between fixed, variable and split loans.
Low Document Home Loan:
Low Document home loans (also known as Low Doc, Short Form or Express Application loans) are created for self-employed individuals or anyone who doesn’t have proof of regular income, including contractors and seasonal workers. They are called low doc loans because the documentation required to get a loan is different from that needed to get a traditional home loan. However, you will still need to satisfy the lender’s various policies and documentation requirements. These usually include a signed income declaration, an Australian Business Number (ABN), 12-24 months of financial statements, a letter from your accountant and tax statements. Low doc loans are higher risk for lenders. As the lenders don’t have a guarantee of regular income from the borrower, they typically ask for a higher deposit. Loan to Value Ratio (LVR) will be anything from 60% to 80% depending on how satisfied the lender is with the documentation put forward. The lender also usually charges a slightly higher rate on low doc loans.
Low Doc home loan in a nutshell:
⦁ Designed for self-employed individuals
⦁ Flexibility on documentation needed to prove the ability to repay
⦁ Required loan to value ratio of at least 80 percent
⦁ May require Lender’s Mortgage Insurance (LMI), adding to the cost of the loan