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Loan Types. We know the ins and outs

Basic Variable

Although lacking some features of a standard variable rate, these loans offer lower interest rates and that means lower repayments.

Fixed Rate Loan

When interest rates fluctuate your repayments will stay the same. This peace of mind unfortunately equals less flexibility and early repayments charges when extra repayments are made.

Loan Tip – It is possible to locate lenders who allow extra repayments.

SMSF Limited Recourse Loans

Borrowing to purchase Business Real Property inside an SMSF has become very popular. It suits Baby Boomers, Gen X investors, business owners who are seeking to purchase their own premises. With Related Party Loan opportunities Builders and Developers are now able to leverage their super funds and borrow the full amount of a project and in certain circumstances pay no tax inside the fund.

Important Loan Tip – Always seek specialist financial advice.

100% Offset Loan

Our favorite type of loan. A savings account linked to your loan that pays the same amount of interest as the bank charges! It gets even better. The interest paid by the lender incurs no personal taxes as it offsets the mortgage interest. Loan Tip – Have all income go directly into your offset account and save but ensure that you have 100% offset as not all lenders have the product.

Line of Credit

Once a lender approves a limit you can access those funds when you need them. A note of warning however; if this type of loan is not managed correctly you can possibly reduce the equity in your property.

Introductory Loan

Also known as a honeymoon loan. A bank dangles a discount but this very low rate only lasts for a short time. Payments can increase significantly once the honeymoon is over.

Low Doc Loan

Ideally suited for investors or self applicants as tax returns are not required. Interest rates can be very competitive for loan that have a low loan to value ratio (under 60%) but costs increase as the loan to value ratio increases. This loan saves both time and hassles.

Loan Tip – If a loan exceeds $250,000 many banks offer significant discounts.

Business Lending

Increasingly lenders are allowing residential security to be used to fund business lending. The full loan range is available but some lenders place restrictions on the maximum loan to value ration.

Loan Tip – If you have any business lending linked to your home contact your finance wise mortgage planner for a free review.

To discuss loan options that suit your situation, talk to us now