Mortgage Types

Mortgage Types

Knowing the different mortgage types available in the market can help home-buyers secure a better loan-- one that will suit their needs and financial situation. Listed below are mortgage types you may consider when shopping for the best home loan:

Mortgage Types: Standard Mortgage

Standard Mortgage loans are the most popular mortgage types, preferred because they offer the right mix of features. These mortgage types are often very flexible, and provide competitive interest rates and fees. The extras include unlimited repayment, the ability to split the loan, and the line of credit option.

Mortgage Types: Low Doc Mortgage

Low Doc Mortgage loan is a type of loan designed for people who cannot meet the usual documentation requirements, such as proof of income, assets and liabilities. The low doc mortgage loan provider will then rely on "self-verification," wherein the borrower will state income in writing. There are extra conditions when applying for low doc mortgage loans. These mortgage types usually have higher interest rates and additional fees (called "risk fees").

Mortgage Types: Introductory Rate Mortgage

Introductory Rate Mortgage loans are mortgage types of loans that have an introductory period, which is attached to a discounted interest rate, much lower than the standard interest rates. Interest rates can be variable, fixed or capped. Periods of introductory rates range from six months to three years.

Mortgage Types: Home Equity Mortgage

Home Equity Mortgage loan is also sometimes called the Revolving Line of Credit (or simply, Line of Credit) loan. This loan creates a credit transaction account set against equity in your property. You will have access to this line of credit and use funds for whatever need.

Mortgage Types: Variable Rate Mortgage

Variable Rate Mortgage is a type of loan you repay at variable interest rate. With the variable rate mortgage loans, interest rates are set to vary during the life span of the loan. Interest rates are set against the Reserve Bank of Australia's (RBA) official cash rate.

Mortgage Types: Fixed Rate Mortgage

Fixed Rate Mortgages is a type of loan you repay at fixed interest rate. Fixed interest rates are set for your loan repayment during a set duration, usually between one to ten years.