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Types of Home Loans

There are many different types of home loan available, including combinations of two or more types.

What follows are basic descriptions of the types of loan products available, but for more detailed information and assistance in determining which loan type or combination will suit your needs, contract Real Choice Mortgages.

  • Principal and interest: A loan in which both the amount borrowed and the interest charged on that amount are paid during the term of the loan.
  • All in one loan: All in one loans allow you to deposit all of your income into the loan account, and then to draw upon some of this money to make routine purchases and other day to day transactions. The longer the excess funds remain in your loan account, the greater the interest savings.
  • Honeymoon loans: A loan is offered at a reduced rate for an introductory period ( usually no longer than 15 months) to new borrowers.
  • Fixed interest loan: This is where the interest rate is set for an agreed term.
  • Combination loans: As the name implies, the borrower can choose to combine variable, fixed or even a line of credit features in one loan. These are also known as “split loans” or “cocktail loans”.

Difficult loans

Some borrowers are unable to satisfy the normal criteria set by lenders and have difficulties in obtaining home finance. However, an increasing number of specialist lenders are providing loan products for borrowers whose circumstances are regarded by traditional lenders as too risky or complicated.

Who is likely to have difficulty?

Borrowers who appear to fall short of meeting the conditions of traditional lenders as derived from the requirements of the Uniform Consumer Credit Code (UCCC), and those who are unable to prove to traditional lenders their creditworthiness often have difficulty in obtaining finance:

  1. Self-employed: Without a firm financial record, and the lender may not be prepared to offer finance.
  2. Migrants or others without a credit history: Where a person has no documentation acceptable to the lender, it is not possible to prove credit-worthiness.
  3. Contractors and part-time worker: Traditional lenders will be reluctant to advance funds to a person who cannot satisfy the lender as to continuity of employment.

Professional Service

Whether you’re financing your first home or looking to refinance an existing loan, real Choice Mortgages can assist. Just ring us, and let us know your requirements. We will contact you to discuss your specific needs and the available options – Quick, Easy, Personal.

All of our clients receive personal one-to-one assistance. By contacting us through our online form, or by telephone, you will be making direct and personal contact with a mortgage professional.