Low Deposit Home Loans: Is This The Right Mortgage for You?
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Low Deposit Home Loans: Is This The Right Mortgage for You?

ByDarin Hindmarsh

Low Deposit Home Loans: Is This The Right Mortgage for You? It can take many years for an average working individual to save money to use as a deposit for a home loan. Considering other living expenses and debts, the likelihood of an individual to invest in real estate seems too far from possible. As real estate rates continue to rise every year, many individuals can be disheartened from chasing their dream to own property because it becomes financially difficult for them. Four bedroom houses in Forestdale, Western Australia has a median price of AUS 1.8 million, a 26.4% growth from last 2017. Compared to 4-bedroom homes located in Deebing Heights. QLD, prices have increased by 21.6% but home prices are at AUS 465,000 on average. With home prices on the upward turn in terms of prices, regardless of what State you are located, having enough money to secure your first home can be really challenging. If you are a first time home buyer or if you have a tight budget and find it hard to save for a home loan deposit, then low deposit home loans can be just right for you. These type of home loan will allow you to borrow more than 80% of the property value. Let’s look further. What are Low Deposit Home Loans? Low deposit home loans, also referred to as high Loan to Value Ratio (or High LVR) loans. Such home loans are designed for individuals trying to avail of a home loan but not able to meet the standard 20% deposit. This type of loan can allow 5 to 15% deposit. However, expect the interest on the loan to become higher compared to the total value of the home. While loan companies can offer to fund about 95% of the home value, that price is normally regarded as high risk. Consequently, potential borrowers are thoroughly checked out on their fiscal position and capacity to make monthly payments while living a comfortable lifestyle. July 2018 revealed a record drop of 44% in terms of banks and lenders offering 95% home loans. Tighter restrictions for high LVR loans from the Australian Prudential Regulation Authority (APRA) is one of the significant reasons for this, thus making it harder to secure low deposit home loans. However, with the right mortgage experts, you can still secure a 95% home loan. Intellichoice Finance connects you to this few, but reliable lenders that still offer low-deposit mortgages. It is important to note that even if these loans make it more affordable for future homeowners, monthly repayments and interest rates are higher compared to regular home loans. Also, there are fewer banks and lenders willing to provide loans with lower deposits. But this is certainly not always the case. There are some borrowers who can still get the same rates as a regular home loan and can even get access to better terms and deals. Read further to help you decide if this type of loan is the right mortgage for you. Benefits of Low Deposit Home Loans Drawbacks of Low Deposit Home Loans By looking into the benefits and drawbacks of Low Deposit Home Loans, consider your options. Is this the right mortgage for you? If you are not quite sure yet, contact a mortgage broker to get professional advice. Suffering from bad credit? Check out this article 5 Tips For First Time Home Buyers with Bad Credit for advice.

Types of Business Loans: Which One is For You?

Types of Business Loans: Which One is For You?

ByDarin Hindmarsh

Business loans come in many forms. There is a specified type of business loan that suits your business, your budget and your financial capacity as a small business or as a growing organization. Choosing the right type of business loan is essential. Such decisions help you avoid paying too much for a loan or too long. A good business loan is suitably personalized in terms of interest rates and payment terms to your business. Different Types of Business Loans a bank overdraft is a business loan feature that allows you to transact an amount above your approved overdraft limit without extra charges like an account overdrawn fee. Such banking feature may require you to pay for a monthly service fee depending on the type of the overdraft used. The interest will also be applied to the amount overdrawn. Additional charges are applied if the fees and charges are not paid on time. If a business is having a problem in maintaining smooth cash flow, this type of business loan might be ideal. If you would want access to a higher amount to finance your business, it would be ideal to get a secured business loan from a bank. However, it would be ideal to apply for a secured business loan if our business is already secured and successful. Such type of loans requires collateral, such as assets to be able to secure a loan from the bank. If you are not capable of repaying a loan for a long period of time, this type of business loan is not for you. Small and medium businesses can secure business financing through an unsecured bank loan. Such type does not require any collateral and is limited to a maximum of 12-months in terms of repayment terms. Repayment can be done daily or monthly. If you require a small amount to cover the expenses for your business, an unsecured business loan would be ideal for you. A business credit card works like a regular credit card except for the fact that is used for business purchases and is under a business account. It has higher credit limits compared to personal credit cards. Bank guarantees are a form of security that a business can offer to its clients or suppliers. Under a bank guarantee, the bank shall provide payment to the recipient with the amount guaranteed on the written demand. Business can meet payment obligations to their suppliers while keeping a cash deposit under the company name with the bank. Business term loans are fixed-rate loans that can be repaid in a year in minimum or up to 5 years maximum. Loan amounts start from $10,000 as the minimum. If a business is looking into increasing its capital or acquiring huge assets for a business, a business term loan would be an ideal option for them. Such types of loan can be amortized, depending on your choice. A bill of exchange is a written raft wherein a seller requires a buyer to pay on demand or through a fixed future time a determined amount of money specified by a person to the one who purchased goods or services. Lease financing is a form of rental agreement. This can be mostly related to car lease finances. A financier basically purchases a car and charges a monthly repayment scheme to the end user. The repayment is within a term period. At the end of the term period, the end user may pay a negotiated amount with the financier to be able to claim full ownership of the vehicle. The financier may also opt to retain ownership of the vehicle. Negotiation is usually agreed upon between the financier and the end user at the end of the payment term. Asset finance loans is a form of a secured loan. It is secured by the asset purchased. For ga rowing business who would want to invest in equipment to improve cash flow, asset financing might be a better option. At the start, for some, at the end, of the loan term, the borrower may choose to finance to own or finance to return the acquired asset. Personal loans are short-term loans that can be used in many forms. It can be used for emergencies, school fees, for a car deposit, additional wedding funds, medical expenses or any other unexpected expense that the borrower may see fit. Personal loans are usually for clients with good credit standing. A regular source of income, backed with employment confirmation, pay slips and other financial documents are required to apply and qualify for a personal loan. Trade finance is usually equipped for exportation and importation trade transactions. Loans used for this type of business loan can be used to purchase goods or services. It can also be used to pay for goods and services purchased abroad.