Buying a Home
Getting your mortgage
There are many different types of home loans. As overwhelming as the choice of home loans may be, just remember that many home loan products fall within three broad categories, variable interest rate, fixed interest rate and line of credit.
Home Loan Application Process
- Step 1: Calculate your deposit
- Step 2: Calculate your borrow capacity
- Step 3: Selecting the right loan for your needs
- Step 4: Obtain pre-approval
- Step 5: Formal approval and settlement
Information you will need to complete an application includes:
- name
- date of birth
- spouse's name
- drivers licence
- address
- number of dependants
- total value of your assets
- total value of your liabilities (personal loans, credit card debts etc)
- occupation
- current place of employment, length of time working with current employer
- employer's contact details
- if your self-employed, how long have you been self-employed for
We will also want you to provide a range of documents to support your home loan application. A mortgage application checklist will help determine which documents may be required for various home loan types.
Home Loan basics
You need to be 18 years and over to get a mortgage and have a regular income to meet the loan repayments. Most financial institutions offer home loans that will enable you to buy a house, unit, townhouse or house and land package, with a variety of different home loan options available.
The maximum term available is generally 30 years for a home loan and 25 years for a residential land loan.
Mortgage repayment options are usually on a weekly, fortnightly or monthly basis depending on what suits your requirements and the mortgage that you select. The more often you make mortgage repayments, the lower the interest cost will be and the sooner your home loan will be repaid (although this will depend on the terms of your particular mortgage product and whether additional or lump sum repayments are also allowed).
Fixed interest home loans generally are less flexible (eg. you can't redraw any extra repayments you've made) and have charges for early repayment. Your mortgage repayments are determined by the amount borrowed, the term of your home loan, frequency of the repayment and the interest rate (although you will need to review the terms of your particular mortgage).
You can use a Home Loan repayment calculator to determine the amount of your mortgage repayments based on different criteria (interest rates, mortgage duration etc).
What type of home loan is right for me?
Most mortgage lenders offer the following three types of home loans:
- Variable interest rate home loans - a higher interest rate than the basic variable interest rate, but reward with more features with either lower or no fees
- Fixed interest home loans which will usually revert back to a standard variable rate home loan after the nominated term
- Line of credit - a loan where you borrow to a ceiling amount and you can pay down and draw back up to that ceiling amount
Finding a mortgage that suits you
You need to choose a mortgage that's just right for you. Work out what features are important to you and then compare the cost/benefit of various options.Use a mortgage checklist
ING DIRECT is a division of ING Bank (Australia) Limited ABN 24 000 893 292 AFSL 229823.