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The good things about Pepper Money
They specialise in working on each individual application to fully understand your real life situation and how they can help.
What happens next?
- They find and compare the best home loans deals in your area.
- They will get in touch with you to talk through your options.
- Your lending specialist will negiotate an even better deal for you.
Home Buying FAQs
Buying a home is often an exciting experience. But, if you don’t understand the process and the mortgage industry, then it can also be daunting and even a little scary. In order to help you avoid some common mistakes that first home buyers make, we’ve answered some of the most frequently asked questions.
You’ll need a minimum deposit of 10 percent of the purchase price of a property to take out a home loan. But, it is more cost effective for you if you have a 20 percent deposit as this gives you more equity in your property and means less risk for your lender. This, in turn, can reduce the amount of interest that you’ll pay on your home loan.
Plus, if you only have a 10 percent deposit, you may find that you’ll be asked to pay Lenders Mortgage Insurance (LMI), which is costly and can add thousands to your home loan principle. This insurance covers the lender against financial loss should you default on your home loan payments.
There are numerous types of home loans in the industry. The most common are as follows:
Principal and interest: This is where you pay a portion of your home loan principle and the interest that your loan incurs monthly.
Interest only: This is where you only pay the interest on your home loan per month. At the end of your home loan you’ll pay back the principal you borrowed.
Variable rate: A home loan that has a rate that fluctuates with the rise and fall of the official cash rate.
Fixed rate: A home loan that has a fixed rate for an agreed term of usually 1, 2, 3 or 5 years. After the term ends the rate of the loan will revert to a variable rate.
This is a no-frills variable home loan that will give you the lowest possible rate. But, this home loan typically comes with no features.
The right home loan for you is the home loan that meets your needs and requirements, which gives you flexibility and is affordable. To find the right home loan, consider what home loan features you’ll use and what type of home loan you want. Then compare these home loans for the best rate.
Home loan features give you payment flexibility, but typically the interest rate on home loans with features are slightly higher. The most common features you’ll encounter are:
- Extra repayments without incurring a penalty.
- Offset accounts, where you can deposit all of your money into this account and the balance will then reduce your mortgage interest.
- A redraw facility, where any extra money paid off your home loan can be used at a later date as a loan if you need it.
All lenders charge different fees, so you’ll need to ask about these when you research home loans. Make sure you also ask about any other additional charges.
Stamp duty depends on the value of the property you’re buying and what state the property is situated in. To calculate your stamp duty use an online calculator.