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Loan Features
Getting the Most from Your Loan
As lenders become more competitive, greater flexibility and features
have been introduced which can save you money. Lenders often
enhance their features so it is worth keeping track of what's
on offer.
Professional Packages
These are a packaged bundle of features and discounts which
generally attract an an annual fee for the package. Discounts
may initially include a nil, or reduced, application fee, no
monthly account keeping fees and a discount on interest rates.
The amount of the discount offered will depend on the amount
borrowed. Other features may include waiving other costs associated
with the loan, such as redraw fees and offering offset accounts .
Some lenders include discounts on other products, such as building
and contents insurance, travel insurance and a rewards program.
Professional packages will vary between lenders and it is important
to understand the eligibility criteria.
Portability
Retain the same loan when you sell your property and buy a
new property (called 'substitution of security'). Portability
is subject to a satisfactory valuation of the new property.
If you need to increase your loan, you will be subject to the
lender's usual assessment criteria to ensure you can afford
the increase. Most lenders charge a portability establishment
fee. This can provide a convenient option when going through
the process of selling and buying a new property.
Redraw
If you have made additional repayments
to your home loan and are ahead in your repayments, this feature
allows you to redraw the additional repayments you have made.
Conditions to redraw will apply. Flexibility on this feature
will vary between lenders and products.
Repayment holidays or Payment Pause
Some lenders offer the ability for
borrowers to reduce or pause their scheduled repayments. Depending
on the circumstances and the the policy, the lender may only
allow repayment holidays if you have made additional repayments
and you are ahead in your payments.
Parental leave
As with the repayment holiday/payment
pause, some loans have a parental leave feature which allows
borrowers to reduce their payments while off work when having
a new baby. Generally you will need to be ahead in your repayments
or have the borrowing capacity to extend your loan amount
to cover the reduced payments.
Salary Credit
Some types of loans will let you salary credit into your
loan account until you need it. The advantage is that your salary
reduces the loan balance saving you interest. To withdraw money
for your regular expenses will depend on the type of loan account
you choose. Some loans are an all-in-one account, others you
will be required to transfer the funds out of the loan account
into a transaction account.
Offset accounts
Designed to reduce the interest cost incurred in your loan account,
an offset account is either a transaction or savings account
which is linked to your loan account, where the amount deposited
offsets the amount in your loan account. Details on how these
accounts operate and whether they offer you a full 100% or partial
offset, are available directly from the lender or your financial
planner.
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T: 02 9972 4452
F: 02 9972 4605
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