home loans
So you're looking for a home or investment loan?
barrett lending solutions has experience in finding a loan solution for those buying their first home through to seasoned property investors.
Although it's fine for us to say that we are accredited with over 40 different lenders with access to thousands of products, but what if you don't even know what type of loan you would like?
To help you, please feel free to read the section that applies to you.
If you're not one for reading, simply email us your question via the home page or just give us a call on 0400 737 767.
For definitions / descriptions of the different styles of loans available, click on loans
This page has been divided into 2 sections.
1. information for first home buyers , and
2. information for property investors
first home buyers
Finding your home can be challenging, finding the right home loan can be too.
Buying a home for the first time can be exhilarating yet extremely daunting, especially when it comes to choosing a home loan.
barrett lending solutions can help you find the right loan.
With our experience in this field, we offer our personalised service and assist you through every stage of the process. We even assist you in gaining your First Home Owners Grant (if applicable) and other Gov't concessions that are available to First home Owners
-We make it happen- by ensuring your loan processes faster and easier, while giving you the personalised service you deserve.
To help you get started consider these eight factors when applying for a home loan.
1. How much can you afford to borrow ?
Obviously an important consideration is to work out how much you can borrow. We assist you in working this out. We look at all your income and expenses, debts, and regular bills to work out how much you can put towards a home loan . Most lenders will base the size of your home loan on your capacity to meet the repayments . As a general rule, your repayment obligation should not exceed 30% of your pre tax income . Use our calculator to find out how much you can borrow .
2. Deposit amount
Although there are loan products available where you do not need to have a 20% deposit,remember the larger your deposit, the less you have to borrow and the lower the LMI premium. The deposit can take many forms such as cash, shares, term deposits or other assets that can be sold and turned into cash.
3. Savings history
Lenders require proof of savings history in the form of bank statements that show regular deposits. You will need at least the last six months' statements, which should add up to at least the 5% minimum deposit.
4. Types of home loans
In today's competitive market, finding the right loan can be a complicated, drawn out process. What may be suitable for one person may be inappropriate for another. To help simplify the process, familiarise yourself with what's available. Also take into consideration your goals and financial circumstances.
5. First home owners grant
If you have never owned a home before, you may be eligible for the Federal Government's First Home Owners grant. At the moment, for most states, the grant only applies to those building a new property or purchasing a property which has never been lived in before. This one-off tax free payment can be used to help fund your additional expenses or in some cases may be used a deposit. Various state government schemes may also be available so check with your relevant State Revenue Office.
6. Stamp duty
Stamp duty is a state government tax based on a property's selling price. First home buyers in some states may be entitled to a reduction in stamp duty costs.
7. Lenders mortgage insurance (LMI)
If you borrow more than 80% of the property's value, you will probably have to pay lender's mortgage insurance . This insurance protects the lender should you default on the loan.
8. Additional costs
Apart from stamp duty and LMI , there are a number of additional expenses you need to take into account when buying a home. Costs include loan application fees, solicitor/conveyancing fees, building/council inspection, pest inspection, home and contents insurance, moving expenses and utilities connections.
What sort of loan will I need?
To generalise, most First Home Owners tend to want the cheapest rate. They have just saved their deposit and when they move into their home will need furniture and the like. Thus most generally go for:
Basic loans This is a loan product which comes with a cheaper rate to offset the lack of features normally found in a standard variable rate loan. They are an excellent option for those wanting a cheap rate with no requirement for all the bells & whistles".
In return for a lower interest rate, basic home loans have fewer features and can be less flexible. Some lenders may offer the option to pay for extra features when you need them. There may also be fees and charges if you decide to switch loans or lenders, or pay off the loan sooner.
In a nutshell, they offer
$ lower interest rates
$ lower ongoing fees
$ minimal features
$ less flexibility
$ no additional repayments
$ or owner/occupiers only
Discount variable This style of loan has an introductory or "honeymoon" rate for an initial period of the loan before reverting to the standard variable rate. This can free up a little spare cash in the first year of your new loan.
What if you want to purchase a home and do not have a sufficient deposit or no deposit at all ?
No deposit loans - PLEASE NOTE THAT THESE STYLE OF LOANS ARE NOT CURRENTLY AVAILABLE. CALL TO FIND OUT WHAT IS THE LATEST OFFERING IN TERMS OF LOW DEPOSIT LOANS.
As the name implies no deposit is required. They also go by the name 100% home loans. The name can be a little misleading in a sense because you still need to have funds to cover all the purchase costs (including all the statutory fees). Some lenders still require you to show genuine savings equal to 3% of the purchase price.
Most people are surprised to learn that they can borrow 100% of a residential property. For years their parents and friends have been urging them to save for a deposit, but it's hard to save for a deposit and pay rent as well. The good news is that genuine no deposit loans are now available Australia wide and in most cases there is no interest rate penalty! (Beware; some lenders are advertising 100% loans but in fact, require 3% genuine savings, or charge an extra 3.5% in mortgage insurance).
So now it's much easier to get out of the rent rut and start paying off your own home instead of the landlord's.
In a nutshell.
- No genuine savings required.
- Owner occupied or investment
- PAYG or self employed
At barrett lending solutions, we have access to numerous low deposit lenders. These include the major banks. So your chances of success are much higher with barrett lending solutions than going directly to the bank and best of all our service is FREE and we come to you.
For other loan possibilities go to loans to find out about the other loan options that may be of interest to you.
property investors
When it comes to making the most of an investment property , finding the right home in the right location is only half the battle; finding the best finance is other half. Many options are available and the choice of home loan will ultimately depend on your particular investment strategy and the type of property.
1. Standard variable rate or fixed rate home loan
Depending on your circumstances, most lenders will let you borrow up to 95 per cent of the purchase price of an investment property . You may, however, be required to take out lenders mortgage insurance .
2. Equity home loan
If you already own or substantially own your home, you can borrow against the "equity'"you have accumulated. Equity is simply the difference between what your property is worth and what you owe. For example, if you have $150,000 to pay off on a home worth $600,000, you have $450,000 worth of equity. An equity home loan gives you a line of credit on your mortgage up to an approved amount. The loan can be taken in full or in stages, making it particularly useful for property investing.
3. Cross - collateralisation
This is where a lender will take a mortgage over your current property as well as a mortgage over the intended investment property and in essence link them. This is a way of utilising the equity in your current property to enable the purchase of an investment property without having to save a deposit.
Bear in mind, that if you were to default on the investment loan and the lender sells the investment property to recoup the outstanding loan amount and there are insufficient sale funds then the lender has the right to sell your first property to recover the shortfall.
Important extras
Loan features that may offer tax benefits or help you pay off your investment loan sooner include:
interest in advance home loan (lets you pay next year's interest in the current financial year, thus creating a tax deduction for eligible borrowers.Please consult with your accountant or financial adviser before utilising)
mortgage offset account (lets you use savings and interest earned on savings to pay off the loan principal).
At barrett lending solutions we pride ourselves on assisting even the most seasoned property investor to package up a loan solution to meet their current and future lending requirements.
With property investing it is extremely important to have a flexible loan structure to enable an investor to move into and out of a property investment when they wish for the lowest cost possible.
When it comes to finding the right lending solution “we make it happen"
