Whether you’re buying your first home, refinancing your mortgage, or investing in property, understanding how home loans work is crucial to making informed decisions. At AJP Finance, we’re here to help you navigate the complex world of home loans with ease. This Home Loan Guide will walk you through the key steps and considerations involved in securing a home loan, so you feel confident every step of the way.
A home loan (or mortgage) is a loan used to purchase property. The loan is secured against the property, meaning the lender can sell it if the borrower fails to make the required repayments. Home loans typically last for 25-30 years, with repayments made either monthly, fortnightly, or weekly.
At AJP Finance, we work with over 30 lenders, including banks, credit unions, and non-bank lenders, to find you the best loan product that suits your financial situation and long-term goals.
Understanding the different types of home loans available will help you choose the one that best suits your needs. Here are the main types of loans:
A fixed rate home loan locks in your interest rate for a set period, usually between 1 to 5 years. This means your repayments will stay the same during that time, providing stability and predictability in your budget. Fixed loans are ideal for those who want certainty and protection from interest rate fluctuations.
With a variable rate home loan, your interest rate can fluctuate based on the Reserve Bank of Australia’s cash rate changes and market conditions. This means your repayments could go up or down over time. Variable loans typically offer more flexibility and features, such as the ability to make extra repayments or access redraw facilities.
A split loan allows you to divide your mortgage into two portions—one with a fixed interest rate and the other with a variable interest rate. This gives you the best of both worlds: the stability of fixed repayments and the flexibility of variable rate features.
Before you start house hunting, it’s important to understand how much you can borrow. This is typically based on your income, expenses, existing debts, and the size of your deposit. At AJP Finance, we assess your financial situation and provide a clear picture of your borrowing capacity, ensuring you have realistic expectations when searching for your dream home.
The Loan-to-Value Ratio (LVR) is the percentage of the property’s value that you’re borrowing. For example, if you’re buying a $500,000 property and have a $100,000 deposit, you’d need to borrow $400,000, which would give you an LVR of 80%.
Most lenders prefer an LVR of 80% or lower, as it shows you have a strong deposit. If your LVR is higher than 80%, you may need to pay Lender’s Mortgage Insurance (LMI), which protects the lender in case you default on the loan.
The home loan process can seem complex, but with AJP Finance, we make it simple and straightforward. Here’s a breakdown of the key steps involved:
We start by understanding your financial goals, budget, and needs. Whether you’re buying your first home, investing, or refinancing, we’ll tailor our advice to your situation.
Getting pre-approved for a loan gives you a clear idea of how much you can borrow and helps you act quickly when you find the right property. Pre-approval shows sellers you’re serious and ready to move forward.
Once you’ve found your ideal property, you’ll make an offer. If your offer is accepted, we’ll move to the formal loan application process.
We’ll handle the paperwork and submit your formal loan application to the lender. This includes providing documentation such as proof of income, savings, and personal identification.
After the lender approves your loan, it’s time to finalise the contract. On settlement day, your lender will transfer the funds to the seller, and the property will officially be yours.
If you’re a first home buyer, you may be eligible for government grants or concessions that can save you money and reduce the overall cost of buying a home. Some options available to first home buyers include:
At AJP Finance, we’ll help you navigate these schemes, ensuring you take full advantage of any financial assistance available.
When selecting a home loan, it’s important to consider more than just the interest rate. Here are some tips to help you make the best decision:
At AJP Finance, we’re more than just mortgage brokers—we’re your financial partners. Here’s why so many Australians trust us with their home loan needs:
Whether you’re buying your first home, refinancing, or investing, AJP Finance is here to guide you through the home loan process. Our expert brokers will help you find the right loan for your needs, ensuring a smooth and stress-free experience.
📧 Email us: jitesh@ajpfinance.com.au
📞 Call us: 0412 018 732
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Credit Representative 55431 is authorised under Australian Credit Licence 384324. ACL Holder – Outsource Financial Pty Ltd; ACR – AJP Connection Pty Ltd.
Disclaimer: The AJP Connection Pty Ltd Home Loans service is provided by Outsource Financial Pty Ltd (ACN 131 090 705) which provides mortgage lending services to consumers under their Australian Credit License Number 384 324. As part of the referral process, legislation requires us to obtain your consent to your name and contact details being given to Outsource Financial Pty Ltd. We will pass your information on to Outsource Financial within 5 business days. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. AJP Connection Pty Ltd receives a commission for making these referrals. The commission that we receive depends upon the lender that ultimately provides your home loan and is 40% of the upfront and trail commission received by outsource Financial Pty Ltd from the lender. The total of all commissions will be disclosed by outsource Financial Pty Ltd as part of arranging your home loan.
