Residential Home Loan
Residential Home Loan
- According to the use of home purchases, home loans are mainly divided into two types. They are Owner-Occupied Home Loan and Investment Home Loan.
- Home loans generally have two types of repayments: Interest-Only or Principal and Interest. Choosing Interest-Only can reduce the repayment pressure in the short term and maximise the cash flow; choosing Principal and Interest will help pay off the loan as soon as possible.
- If you are a First Home Buyer, we have written a step-by-step guide to help you in this process: https://sfgfinancecom.au/first-home-buyers/
Construction Loan
- You may choose a construction home loan if you wish to build your own place instead of purchasing an established property.
- In contrast with home loans for established properties, a construction loan is progressively drawn-down. In plain terms, there are usually 5-6 stages of construction work, your builder will issue you an invoice upon completion of each stage of construction, and your lender will draw down your loan progressively to pay your builder for the work done. As your loan is progressively drawn-down, your loan amount will increase by each stage, and you will start making interest repayments on your loan
- The construction loan will generally have interest-only repayments in the first 12 months, and then revert to standard principal and interest repayments.
Bridging Home Loan
- A bridging loan is when you require finance to purchase a second property with the intention to sell the existing one. A bridging loan is typically an interest-only repayment home loan with a limited loan term. The extent of the bridging loan is calculated based on the equity in your current property.
- It is an additional home loan that you take out on top of your current home loan until you manage to sell the existing property and pay out its mortgage.
- During the bridging period, you will be charged interests on both the two loans. Some lenders allow you to accumulate interests payable on the original loan and make repayments in a lump sum when paying out; while some lenders may require you to make loan repayments for both loans concurrently.
