Skyline Home Loans—Guiding you to financial excellence
The amount of money you contribute towards the purchase of a property. The larger your deposit, the less you may need to borrow.
The percentage of the property’s value that you borrow from the lender.
Example:
Property Price: $500,000
Deposit: $100,000
Loan Amount: $400,000
LVR = 80%
The portion of your property that you own.
Example:
Property Value: $700,000
Home Loan Balance: $400,000
Equity: $300,000
The estimated amount a lender may be willing to lend based on your income, expenses, debts, and financial situation.
An indication from a lender of how much you may be able to borrow before finding a property.
An interest rate that can increase or decrease over time depending on market conditions and lender decisions.
An interest rate locked in for a specific period, usually between 1 and 5 years.
A loan that combines both fixed and variable interest rates, allowing you to benefit from features of both.
Your repayments cover both the amount borrowed and the interest charged on the loan.
For a set period, you only pay the interest on the loan and do not reduce the loan balance.
A transaction account linked to your home loan. The balance in the account reduces the amount of interest charged on your loan.
Example:
Home Loan: $500,000
Offset Balance: $50,000
Interest is calculated on $450,000.
Allows you to access extra repayments you have previously made on your home loan.
Replacing your current home loan with a new one, often to obtain a lower interest rate or better features.
A rate that includes the interest rate plus certain fees and charges, helping you compare loan products more accurately.
The final stage of purchasing a property when ownership is transferred to the buyer.
The legal process involved in transferring property ownership from the seller to the buyer.
An assessment of a property’s market value conducted by a qualified valuer.
A government tax payable when purchasing property. The amount varies depending on the property value and state.
Insurance that may be required when borrowing more than 80% of the property’s value. It protects the lender, not the borrower.
A person, usually a family member, who provides additional security to help you qualify for a home loan.
A government scheme that may provide financial assistance to eligible first-home buyers.
A property purchased primarily to generate rental income or long-term capital growth.
The annual rental income expressed as a percentage of the property’s value.
When the costs of owning an investment property exceed the rental income generated.
When the rental income generated by an investment property exceeds its expenses.
A borrower who operates their own business rather than receiving wages from an employer.
A loan designed for self-employed borrowers who may not have standard income documentation.
A number that reflects your credit history and helps lenders assess your creditworthiness.
The length of time you have to repay your loan, commonly 25 or 30 years.
Additional payments made above your minimum required repayment, helping reduce interest and pay off your loan sooner.
Failing to meet your loan obligations, such as missing repayments.
A finance professional who compares loan products from multiple lenders and helps borrowers find suitable finance solutions.
Refinancing your home loan to access some of your property’s equity for purposes such as renovations, investments, or debt consolidation.
Combining multiple debts into a single loan, often to simplify repayments and potentially reduce costs.
A loan designed to finance the building of a new home, with funds released in stages as construction progresses.
A short-term loan that helps you purchase a new property before selling your existing one.
A lender’s assessment of your ability to comfortably meet loan repayments based on your financial circumstances
FHGS stands for the “First Home Loan Deposit Scheme,” which is a government initiative in Australia aimed at helping first-time homebuyers enter the property market with a smaller deposit. Here are some key points about the First Home Loan Deposit Scheme:
Purpose: The First Home Loan Deposit Scheme was introduced to assist eligible first-time homebuyers in purchasing a home sooner by providing support with a lower deposit requirement.
Deposit Requirement: Under the scheme, eligible first-home buyers can purchase a property with a deposit as low as 5% of the property’s purchase price. The government guarantees the portion of the deposit beyond 80% of the property’s value, allowing borrowers to avoid paying Lender’s Mortgage Insurance (LMI).
Government Guarantee: The government guarantees up to 15% of the property’s value for eligible borrowers under the First Home Loan Deposit Scheme. This means that borrowers do not need to pay LMI, which is typically required for loans with deposits less than 20%.
Eligibility Criteria: To be eligible for the First Home Loan Deposit Scheme, applicants must meet certain criteria, including being Australian citizens or permanent residents, being first-time homebuyers, and having taxable incomes below specific thresholds. Other criteria may also apply, depending on individual circumstances.
Property Price Caps: The scheme imposes price caps on the properties that can be purchased under the scheme. These caps vary depending on the location of the property, with higher caps for properties in major cities and lower caps for regional areas.
Participating Lenders: The First Home Loan Deposit Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC) in partnership with participating lenders, including banks and other financial institutions. Borrowers apply for the scheme through participating lenders.
Limited Places: The scheme has a limited number of places available each financial year. Once these places are filled, eligible borrowers may need to wait until the next financial year to access the scheme. It’s essential for prospective applicants to check availability and apply early if interested.
Overall, the First Home Loan Deposit Scheme provides an opportunity for eligible first-time homebuyers to enter the property market with a smaller deposit and avoid paying Lender’s Mortgage Insurance. Before applying, prospective buyers should review the eligibility criteria and consider whether the scheme aligns with their financial goals and circumstances.
The principal is the initial amount of money borrowed from a lender to purchase a property. It is the total amount of the loan before interest and other charges are added.
Interest is the cost of borrowing money from a lender, expressed as a percentage of the principal amount. It is the compensation paid by the borrower to the lender for the use of the loan funds.
The loan term refers to the period over which the borrower agrees to repay the loan. Common loan terms for mortgages are 15, 20, or 30 years, although other terms may be available.
is the process of gradually paying off a loan through regular payments over time. With each payment, a portion goes towards reducing the principal balance of the loan, while the remainder covers the interest charges.
A fixed-rate mortgage is a loan where the interest rate remains constant for the entire term of the loan. This provides borrowers with predictable monthly payments, as the interest rate and principal portion of the payment do not change.
A variable-rate mortgage, also known as an adjustable-rate mortgage (ARM), is a loan where the interest rate can fluctuate over time based on changes in market conditions. This can result in changes to the borrower’s monthly payments.
The down payment is the initial payment made by the borrower towards the purchase price of the property. It is typically expressed as a percentage of the property’s purchase price, with higher down payments resulting in lower loan amounts.
The lender’s Mortgage insurance protects the lender in the event that the borrower defaults on the loan and the proceeds from the sale of the property are insufficient to cover the outstanding loan balance. Loan loans with a loan-to-value ratio (LVR) above 80% are typically required.
Closing costs are the fees and expenses associated with finalising the mortgage loan and transferring ownership of the property. They may include items such as loan origination fees, appraisal fees, title insurance, and attorney fees.
