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Residential Lending

We understand that your home is more than just a place to live; it’s a reflection of your dreams, aspirations, and future. Whether you’re in the market for a new home or seeking to refinance an existing residential property, be it for owner occupancy or as an investment, our team of experts is well-equipped to secure the most advantageous deals tailored to your individual circumstance, and we’re here to guide you every step of the way. Here is some detailed information about residential lending:

Types Of Residential Lending

  • Home Purchase Loans
These are the most common types of residential loans, used to buy a primary residence or investment property. Borrowers can choose from fixed-rate loans, variable loans, or split loans. It can be interest only or principal plus interest. The interest-only period can be up to 5 years depending on the loan type. The loan term can be up to 30 years. There is a lock rate option for fixed-rate loans.
  • Refinance Loans
A borrower takes out a new loan to pay off an existing loan. The primary purpose of refinancing is to obtain better terms, such as lower interest rates, reduced monthly repayments, different loan structures, debt consolidation, or cash-out for eligible purposes.
  • Home Construction Loans
These loans are used to finance the construction of a new home. They typically have a shorter loan term and require the borrower to make interest-only payments during the construction phase.
  • Home Equity Loans
These loans allow homeowners to borrow against the equity in their property. Home equity loans can be used for various purposes, such as home improvements, debt consolidation, or other major expenses.
  • Lines of Credit:
It’s similar to home equity loans but provides a revolving line of credit. Borrowers can draw funds as needed, up to a predetermined limit, and repay them with interest.

Loan Features

  • Deposit Requirements

Traditionally, Australian lenders have required a minimum deposit of 20% of the property’s purchase price. However, some borrowers can enter the market with a smaller deposit through schemes like the First Home Loan Deposit Scheme, which allows for a 5% deposit.

  • Loan Term:
Generally speaking, the residential loan term in Australia is 30 years, however, there are lenders that offer a 40-year loan term to assist clients in reduceing their monthly repayments.
  • Interest Rates

There are fixed and variable options for residential loans in Australia, with Interest rates that can vary between lenders. The Reserve Bank of Australia (RBA) sets the official cash rate, influencing the variable rates offered by lenders. Borrowers often keep a close eye on the RBA’s decisions and economic indicators to make informed decisions about loan products. While fixed rates are offered by most lenders, a rate lock feature is also available from many lenders when applying for loans.

  • Government Initiatives

The Australian government offers support to homebuyers through schemes like the First Home Owner Grant and the First Home Loan Deposit Scheme. These initiatives aim to make homeownership more accessible, particularly for first-time buyers.

  • Offset Accounts And Redraw Facilities:

Many Australian home loans come with features like offset accounts, which allow borrowers to reduce their interest payments by offsetting their savings against their loan balance. Redraw facilities enable borrowers to access extra payments they’ve made on their loan.

  • Regulation And Consumer Protections
Residential lending in Australia is heavily regulated, with laws like the National Consumer Credit Protection Act and oversight by the Australian Securities and Investments Commission (ASIC) ensuring fairness and transparency for borrowers.
  • Repayment Methods

Borrowers have flexibility in choosing their repayment frequency. Most opt for monthly repayments, but some lenders offer weekly or fortnightly options, providing borrowers with greater control over their finances.

  • Lenders Mortgage Insurance (LMI)

Mortgage insurance is a consideration for borrowers with deposits less than 20% of the property’s value. It safeguards the lender in the event of a borrower default, though the insurance premium is paid by the borrower. LMI can be waived when applicants meet certain professional criteria.

CONTACT US

Phone: 0431318420
Email: enquires@mmfinancegroup.com.au
Mail: PO Box 7151, Silverwater, NSW 2128

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Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.
Credit Representative 552876 is authorised under Australian Credit Licence 389328.

Golden Wealth Pty Ltd t/a MM Finance Group ABN 66 640 388 567