Loan Type Glossary

You may have heard about all the different kinds of loan products that Advantage Home Loans can offer you, regardless of what type of borrower you are, or what kind of property you hope to acquire. With more than 400 different loan products available from 45 of Australia’s best lenders, we’re confident that we’ve got what you’re looking for. Here are just a few of the loan types we specialise in, and which you can take advantage of to move into the home of your dreams.

This is your basic type of loan option where the interest rate will vary with market values over the life of your loan. You’ll typically enjoy a wide range of features, including:

• Offset accounts
• Additional Repayment Options
• Redrawing payments in advance

This is a variation on the standard variable rate loan in that, while it varies, the rate tends to be a bit lower overall, at the cost of giving up the features associated with the standard variable loan type.

A fixed rate loan allows you to enjoy a locked-in interest rate for a set period of time, often up to five years if you qualify. During this time, your repayments cannot fluctuate, and you’ll enjoy a healthy peace of mind no matter which direction the market heads.

The interest only loan is a popular option for property investors and home buyers who wish to minimize their monthly repayments. With this type of loan, you only pay the interest on the loan for a set period of time, usually one to five years, without worrying about principle at all. After that period, the loan can revert to the usual variable rate loan.

The split or combination loan gives you the best of both worlds: fixed and variable. In short, part of your loan is fixed, and part is variable, so that you can enjoy all the flexibility and features of the standard variable rate, while also having the peace of mind associated with a non-fluctuating, stable monthly fixed rate.

A line of credit loan enables you to borrow against the equity in your residential properties up to an approved limit (generally a high percentage of the equity you have in your home). This is good if you:

• Need credit constantly available
• Only want to pay interest on what you actually spend, not on what you borrow

Professional package loans are tailor made for the business owner or the professional investor, as the loans are often bundled with features such as:

• Transactional offset accounts
• Credit cards and open lines of credit
• Great interest rate discounts up to .70% less than the standard rates

Low documentation loans are good for those individuals who are able to repay loans but may have difficulty providing documentation of their income, such as:

• Self-employed individuals
• Contractors
• Property investors

Generally, in lieu of proof of income, these loans are secured on the basis of ABN (Australian Business Number) registration and the borrower signing a declaration of income.

A construction loan is a type of loan given out to the borrower who doesn’t want to buy an existing property, but rather wants to have a property built to his or her specifications. Such a loan usually requires a fixed price building contract to be submitted ahead of time and then the lender pays the builders directly as different stages of the construction process are completed. This type of loan can take on many forms, including fixed and variable interest rates.

A bridging loan is useful for individuals who are relocating, or who for whatever reason need to move into a new property before they’ve sold off their old one. In this case, the loan is drawn against the equity and value of the older property and granted to the borrower to allow him or her to move into the new property without waiting. This is a valuable loan type for many different scenarios.

Advantage Home Loans offers commercial loans in addition to our residential and investor programs. If you’re looking to purchase or refinance a...

• Shop
• Office
• Factory
• Building space
• Industrial space
• Warehouse

...then you’re looking in the right place. We can even broker low documentation commercial loans!

Short term financing refers to situations where a smallish amount of cash is needed quickly and the client wants to borrow against the value in his or her property. Usually, the amount is somewhere in the neighborhood of $10,000 to $500,000, and is intended to be repaid over a short term period (and carrying an interest rate between 2 – 3% per month). Thanks to our contacts with the best Australian lenders, Advantage Home Loans can even process short term financing loan applications in as little as 48 hours!