What Are the Different Types of Home Loans?
When applying for a home loan it’s worth noting that there are several different types. These include basic loans, offset, package loans, low-document and unsecured loans, as well as specialised mortgages for doctors & other professionals. Not everyone will be able to apply for each type and learning a little more about the different types of loans can help you to choose the right mortgage for your needs.
What are the different types of home loans?
In Australia, where all banks are governed by the Federal Reserve Bank, it’s safe to say that there are two key factors that can be found in every type of mortgage. These factors are called Principal terms and Interest. All loans will include them, from basic or standard home loans, right through to more unique alternatives such as unsecured loans and lines of credit.
The principal factor relates to the total cost of the loan and the interest refers to any additional fees that will be added onto repayments.
Different types of home loans Australia wide
Depending on your financial position, your earnings, your credit report and other factors – you may only be eligible to apply for a few types of mortgages.
Loan types explained
If you’re asking ‘what is the right type of mortgage product for me’, it might be worth getting in touch with or hiring a mortgage broker. The concept of loans is a wide and varied one and can be better explained by a financial advisor or brokering agent.
Different types of loans available to consumers
As a potential borrower, you will likely have noticed that there are plenty of varying loans types offered by lenders. There are some loans that are exclusively available to property investors, while others may only be suitable for developers. However, the majority are there to help first time home buyers.
Loan type fixed or variable
When it comes to interest rates there are typically two types; fixed and variable interest rates. When asking what are the different types of loans, it’s worth noting that one of the key variables will be the type of interest rates that they feature; with fixed being static for a specific amount of time and variable rates being prone to fluctuation.
Split loan investment property options
For those of you that have more than one applicant involved in your borrowing plan – a split loan is a unique type that can be turned to whilst minimising your repayment costs.
Types of business loans Australia has to offer that may be suitable for mortgages
In some cases a business loan might actually be a more viable option than a mortgage – especially if you intend to use the property for commercial purposes. When asking what is meant by a personal loan and how does it differ when compared to a business loan, the truth is that a personal option is ideal for ‘personal’ purchases, whereby a business solution can be better suited to commercial purposes instead.
So, what are the different types of mortgage loans?
In a nutshell, there are some loans that can be applied for by anyone, others that are exclusively available to particular borrowers and fewer still that can be obtained due to certain financial circumstances. All of them will feature rates of interest. What is meant by a personal loan exactly? It’s a type of home loan that can be used for personal purposes; such as the purchase of a home or to cover the cost of an extension.