If you’re considering buying a home in Newcastle, you may be feeling slightly overwhelmed by all of the different home loan options.
Along with your financial situation, you’ll also need to consider how many years your home loan terms will be, what would happen if you were unable to work and repay the loan, and the state of the housing market at the time.
It’s important to take your time when you’re deciding which home loan is best for you. Compare each lenders terms, and ask each one for a facts sheet so you can easily see which one would be best for your situation.This will allow you to easily figure out the features and fees of each lender, and how much you would end up repaying, and for how long for. You’ll want to compare how long the life of the loan will be (including interest repayments), along with how much each repayment will be, and any extra charges and fees.
Most credit providers offer a few different options, including both principal and interest loans, many with different features. Generally, the more features a loan has (such as a redraw facility or offset account), the more the loan is likely to cost.
Your credit rating will also have an impact on the type of loan you can get. If you’ve declared bankruptcy or have a bad credit rating, you may find that you have to pay a much higher interest rate, or higher fees.
Another option is an interest-only loan, which can be a good way to step into the housing market. This means that when you make your repayments, you’re only paying the interest of the loan, and not the actual loan itself. These are also good options for investment properties, although you’ll find that they’re usually interest-only for a certain amount of time before you need to either repay the loan completely or significantly increase the amount you are paying.Most people will choose a principal-and-interest home loan. This means that the amount you’re paying will be both the amount you’ve borrowed, and the interest. This type of loan has been designed to be fully repaid over the loan’s life.
You can also choose whether or not you want a fixed rate home loan. Fixed rates will mean you’re locking in your interest rate for a period of time, regardless of what the market does. For excellent home loan options, be sure to check out fixed rate home loans at Newcastle Permanent.
Along with these loans, there also options for those who are building a new home or doing construction. A construction loan allows you to pay all of your bills for trades people and suppliers and withdraw the funds as you need to, while you can also choose to borrow more against your current home loan if you need to do renovations.
The best idea is to simply take your time, review your options, and get advice if you don’t understand the different choices available.