While a home loan is a big financial commitment, the process of applying for one should not be overwhelming. Technology has made comparing lenders and applying for a home loan more straightforward. The most complicated aspect is deciding which home loan is right for you.
If you are just starting on your home loan journey, some of the terminology can be tricky. Here are some common phrases to get you started:
Your loan may also be a principal or interest loan – interest-only repayments allow you to only pay off the interest charged on your loan for a second period rather than the money you borrowed. While it may be more affordable at the outset, you will pay more interest over the life of the loan. It will also delay building any equity in your home, as you are not actually paying off the property until you pay off the principal. Principal and interest repayments cover both the amount you borrowed – the principal – and the interest and will help you own your home sooner.
Some other home loan features that are important to consider are offset accounts, redraw facilities, and home loan portability. These features can allow you to pay less interest, make extra repayments and access those funds later, or avoid break cost fees on your next property.
If you have a home loan question, you can reach our Customer Success team via phone on 1300 403 204 or message the team at https://smarthomedeposit.com.au/contact-us.html. We look forward to helping you achieve your Smart Home Deposit goals!