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Loan Types
   
 
 

 

 

 


Discounted Standard Variable Rate Loans

 

This type of Home Loan is the most common loan taken out by borrowers today. In the old days banks used to promote  “honeymoon” rates which used to provide the customer with a discount o the rates for a short period of time. Usually between 6-12 months. But today banks now offer a discount on the rate for the life of the loan.

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The interest rate is subject to movement if interest rates go up or down as governed by the Reserve bank of Australia. These types of loans are usually the most flexible offering redraw facilities and allowing borrowers to pay additional repayments to their home loan without penalty. Also allowing other option like weekly, fortnightly or monthly repayments.up


 
Fixed or Split Loans

 

A fixed interest loan allows you to fix your interest rate for a period of time usually up to 5 years.
A Split loan allows you to split your home loan to fix a certain portion of the loan but still keeping the remainder of the loan as a variable rate loan.
The advantages of Fixed Rate Loans is knowing your monthly repayments will not change for the period of the fixed rate and in times of rising interest rates give you some peace of mind knowing you are locked in at a certain rate.

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The disadvantages are that you can be restricted in making any lump sum payments and not having a redraw facility. It can also be very expensive should you break your fixed rate contract by selling or refinancing your property before fixed rate contract has expired.
By splitting your home loan you retain the flexibility of the variable rate loan and still have a portion of your loan at a fixed interest rate.
When your fixed interest rate period finishes your loan will usually revert back to the standard variable rate.
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Line of Credit Loans

 

Line of credit loans give the borrower the flexibility to draw funds from their loan up to their line of credit facility. This type of facility is best suited to people who have excess disposable income and may require funds at times to cover business expenses or investment opportunities.

     
   

Repayments are based on the interest charge and interest is calculated daily on the outstanding balance. In most cases the facility has no term so unless additional repayments or lump sum payments are made the loan balance will stay the same.
Line of Credit Loans should be used with caution, if you require more information about this type of loan or any type of Home Loan talk to the experts at ACF Finance.

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Non Conforming Loans

 

Non conforming loans may suit customers who have some sort of credit impairment or do not fit into the traditional 'bank' product. Interest rates will vary depending on the circumstances of each application.

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Low Doc Loans

 

Low Doc Loans may suit self-employed customers who have not yet completed their financials or tax returns. Proof of income for these types of loans is not required, and can suit clients that have only been in self-employed a short time.

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Low Doc Loans for PAYG

 

This type for loan is designed for customers that have either unusual income streams that don’t fit traditional lender guidelines. For example these days casual employment is becoming more popular and this type of loans can help. This is due to most of lenders don’t not normally liking casual income.

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Bridging Loans or Home to Home loans

 

This type of loan allows you to buy a new property before you have sold your existing one. Bridging loans are subject to the amount of equity in your existing property and you may not need to make repayments on the new loan until your existing property has been sold.

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