Mozonians were quick to respond to the news last week that Lisa Montgomery, CEO of Resi, was on hand all week to answer their home loan questions on Mozo Answers. Lisa covered off some of our most frequently asked home loan topics and so we thought it would be a great idea to detail them here in a single post for easy reading.
What happens to a fixed rate on expiry?
Most fixed rate loans will roll on to a variable interest rate at the completion of the term but your financial institution should contact you prior to the expiry to talk about the options available to you. The options could include: fixing again for another term, moving to a variable rate (make sure the rate is competitive) or choosing a combination of part fixed and part variable.
Lisa suggested that before making a decision you should do some comparative shopping to make sure that your current provider is offering you the best solution for your financial situation.
Can I get a 100% home loan?
According to our industry insiders, 100% home loans are a thing of the past. You’ll need to demonstrate between 5 – 10% deposit as genuine savings.
Is there different lending criteria for investment property loans?
The good news is no. The same rates and criteria will apply for an investment loan as with owner occupied. If the property is going to generate an income that rental income is taken into consideration as well. Most lenders will take 80% of the rental income into consideration if the property is residential. Some will take 100% of the rent into account.
How much stamp duty will I need to pay?
The answer varies depending on what state you live in, the value of your property and whether or not you’re a first home buyer. Try using an online tool like Mozo’s stamp duty calculator to see what you’ll be up for.
Does good rental history count towards home loan approval?
Yes, according to Lisa lenders are starting to look at this more closely these days. A good rental history helps to illustrate your ability to service the home loan debt.
How much is too much to borrow for a home loan?
The resounding advice from the experts is that you need to balance your home ownership aspirations with your lifestyle. Do your homework (do up a budget) and only borrow as much that will allow you to be comfortable with the repayments now and into the future.
Do you have a question on home loans or other money matters? Head to Mozo Answers, Australia’s largest money conversation.