The 5 most common questions asked by Residential Home Buyers

If you want to buy a home and don’t have the funds, you need a home loan. Applying for residential financing is not difficult when you read this article. It includes answer to the most common questions asked by home buyers.

1 – What Type of Residential Finance is available?

Today there are several types of loans in the field of residential finance.

• Owner Occupied Residential Purchase

• Residential Investment Purchase

• First-Time Home Buyer

• Renovations, Extensions and Construction Purposes

• Refinance of your Existing Loan

• Debt Consolidation of your Existing Home Loan Debts

• Home-Equity/Cash Out purpose

• Restructure your Home Loans with Current Lenders

2 – What are Features of Residential Finance?

Each lender offers different interest rates and loan features and conditions. Residential loan packages often incorporate many of the following options and features for you to consider:

• Variable or Fixed Rate Loans

• Interest Only or Principal & Interest Loans

• Combination (Split Loans)

• Line of Credit

• Offset Account

• Bad Credit History

• Redraw Option and Access Availability

• Non-Conforming Loans

3 – What is Home Equity/Cash Out? How can it benefit you?

A Home Equity/Cash Out loan lets you borrow against the value of your home or property. More and more consumers are finding this type of finance arrangement to be very attractive. Such loan programs are very easy to qualify.

The concept of how Home Equity/Cash Out works for you is best explained by the following illustration. The illustration also assumes that you have an existing residential finance loan on your home or property:

The value of your home or property is valued at: $1,000,000

Less Your current home loan balance owing: $500,000

Your home equity amount is: $500,000

You can borrow up to 80% (LVR) of your Property Value without paying mortgage insurance or to 90% LVR with Mortgage Insurance. So at 80% LVR you have access to $300,000 in cash out and at 90% LVR $400,000.

From the example illustrated above you can clearly see that you have equity in your home or property, which you can use to:

• Buy your second or third investment property

• Invest in shares or managed funds

• Renovate, remodel, or otherwise improve your existing home and property

• Purchase vacant land and construct a new home on the vacant land

4 – Why Pre-Approval is better in Residential Finance?

With a pre-approval, you will have the peace of mind knowing that:

• You have a clear picture of what your borrowing limits are

• Your finance request has already been pre-approved and you will know the conditions of your pre-approval

• You have the upper hand when negotiating the sale price with the vendor, real estate agents, etc.

5 – How to get Lower Rates on Residential Finance?

Getting lower rates on home loans is very simple. Check your credit score. There are many online companies that provide residential finance opportunities.

These are the questions that we are often asked by home buyers. But, now that you have answers to them, finding an affordable residential loan will be easy for you.