The Australian Mortgage Market offers a very wide range of Mortgage Options. It is easy to get confused with such a choice.

What should you look for in a Mortgage?

The first thing to consider is your own circumstances. What is it that you are looking to do now and over the next few years? What is most important to you? How flexible should your mortgage be? While Mortgage Options and Choices are almost limitless – they do come at a cost. Therefore if you do not intend to use certain mortgage features – why pay for them?

Honeymoon Home Loan

The main advantage of this loan is that you are able to enjoy home loan interest savings over the first 12 months – the honeymoon period. Honeymoon loans are a great idea if you are trying to enter the property market while it is growing. Perhaps the savings you enjoy in your first year of ownership will help you hold on to the property and enjoy the capital growth. The main disadvantage with these loans is that you start paying the lender’s Standard Variable rate at the end of the honeymoon period. This erodes any savings that you may have experienced in the first year.

Line Of Credit Loan

Line of Credit is a loan against the equity in your home. This is usually an additional facility on top of your home loan. Some home loans allow the borrower to re-draw available equity without the need to establish a line of credit. Generally Line of Credit Facilities are a little more expensive than a regular home loan. However, when used correctly a line of credit can save you a lot of money.

Fixed Rate Loan

Should you fix your home loan interest rate or keep it variable? This decision needs to be made based on whether you believe that the future direction of interest rates is up or down as well as your own plans for the future. If you are looking to sell your home during the next year of so then fixing your rate will not achieve the savings you are looking for due to lender break-up fees.

Low Doc Loans

Low Doc Home Loans have been developed for borrowers whose financials are not up to date at the time of the loan application. These products are also great for borrowers who prefer to keep their financial affairs confidential. The interest rate on low doc loans are generally a little higher. However if you are not able to get access to the funds using a full doc loan – these are a great product.