Home  Finance Services  Residential Finance  Buying a home?  Code Of Ethics  About Us  Contact Us

Residential Finance from Smart Lending Solutions

These days there are more products, options and extras for consumers to choose from. It's important to understand the different types of loans available to ensure you get the right loan for you. At Smart Lending we are dedicated to help you fight your way through these options and find the right product to suit your needs. Here are some of the more common loan products:

Standard Variable Rate Loans
Standard Variable Rate loans traditionally offer complete flexibility and a full range of features. As the name suggests, the interest rate will move up and down according to the market throughout the life of the loan.

Basic Variable Rate Loans
Basic Variable Rate loans are traditionally linked to the standard Variable rate, but the rate is 'discounted' usually but a set amount for the term of the loan. Basic loans tend to offer a lower interest rate, reduced ongoing fees but with less features and less flexibility than Standard Variable Rate loans. This means you are not paying for features you may not need. The interest rate will increase and decrease according to the market variations throughout the life of the loan.

Introductory/ Honeymoon Rate Loans
These types of loans usually offer a low interest rate for the first year of the loan. The rate may be fixed, variable or capped. Once the Introductory or Honeymoon period is finished the interest rate usually reverts to the Standard Variable Rate.

Fixed Rate Loans
Fixed Rate loans allow you to fix your interest rate for a set period of time, and therefore your loan repayments. Fixed rate loans for this reason are often called 'piece of mind' loans. They can provide security and predictability for terms ranging traditionally from 1 through to 5 years. Some providers even offer upto 15 year fixed terms. Fixed Rate loans generally have fewer features than Variable Rate loans, they can limit the amount of extra repayments that can be paid above your minimum repayment. Fixed loans can be costly to break by repaying early or breaking the fixed period to change to other loan products.

Line of Credit
With a Line of Credit, sometimes known as Equity Loans or Revolving Credit facilities, the lender will assign you a credit limit secured against your property. When you need cash you draw against that limit, usually by writing a cheque or using a special debit card. As you repay the loan, the money becomes available to you again.

Low Documentation Loans
These loans are designed for borrowers who are unable to substantiate their income, assets and liabilities using the documentation that supports a traditional loan application. Providers of this facility have the borrower provide a larger level of 'equity' or deposit than is normally required. The borrower traditionally declares their income, but does not need to provide supporting evidence of the stated income. While others require no information about income, assets or existing debt at all. Generally speaking, the less information required, the higher the interest rate will be or the greater the deposit required. Low Doc loans can either be a 'Product' or a 'Policy', providers that offer the facility as a policy traditionally offer better rates and fees.

Professional Packages
Most major lenders offer interest rate discounts to borrowers when their loan is of a reasonable size, and they are willing to package their loan with other products offered by the lender, such as a credit card or savings account. Professional Package loans may also be available to borrowers that are employed in specific professions or have above average incomes.

Split Loans
A Split loan is when you divide your borrowing into various different types of loan products, to take advantage of a variety of fixed and variable rates and various loan features. Split loans can offer you the flexibility to choose loan options that suit your needs, such as large percentage fixed to reduce the impact of rate increases with a smaller amount variable to allow the borrow to accelerate repayment.

Family / Guarantor Loans
More and more people are unable to provide deposits, however they may have access to family that are willing to provide assistance. Family or Limited Guarantor loans can help by allowing established family members to guarantee all or part of your loan using the equity in property that the family member already owns. Some lenders will also permit your guarantor to provide assistance with loan repayments, boosting your borrowing capacity.

Non-conforming Loans
Non-conforming loans are designed for borrowers who don't meet traditional bank criteria. If you are a seasonal, casual or contract worker, are a non-resident or recent arrival in the country, have a small or no deposit or even have a blemished credit history you can still get a foot on the property ladder.

Bridging Loans
A Bridging loan is a temporary loan, where the borrower wishes to use their existing property to assist with the purchase of a new property, but can not afford the debt. They plan to sell their existing home to either clear the debt or reduce to it to a manageable figure by selling the existing home at a later date. It is also helpful for borrowers who want to finance the building of a new home while still living in the old one.

'No Deposit' Home Loans
There is a range of No Deposit options designed to get you into your dream property sooner. These include loans which cover 100% of the property price and loans which cover both the property price and any associated costs.

Interest Only Home Loans
Interest Only Home loan repayments only cover the interest component. The principal is repaid in full at the end of the loan term. Interest only loans offer most of the same features of standard loans with the added benefit of lower monthly repayments. 100% loans are available for existing home or the purchase of land and building.

Construction Loans
A Construction loan is not normally a separate product, but most lenders insist you take a variable loan during the construction period and offer to change the product type to meet your needs at the end of the construction. The lender makes periodic payments to the builder at intervals as the work progresses. Typically, a borrower will make interest only repayments only on those funds that have been disbursed to the builder.