Buying a house in Oz

[Riekie]

We will soon be buying our own property and I'm at the moment investigating EVERYTHING we'll need to know. One thing which really got me puzzled was the various TYPES of loans available! Finally I got it all figured out, and I'm sharing "the light"….

Variable Loan:

Variable Interest Rate (OK, I DID get this one! )

Two options within Variable loans: Basic Variable & Standard Variable (now can you understand my confusion?! )

Basic Variable Loan:

Little Features

Little Flexibility

No "Bells & Whistles"

Lower interest rate than Standard Variable option

Standard Variable Loan:

Lots of Features

"Bells & Whistles"

Mortgage Offset Facility (Savings acc linked with Interest earned on Savings is "offset" against Interest paid on Mortgage – downside: often Monthly charges & higher Interest)

Redraw Facility (Access to your equity – downside: Fees for withdrawals & Minimum Withdrawal Amounts)

Higher Interest than Basic Variable Option

Fixed-Interest Loan:

Locked-in Interest rate for a specified time

Interest don't rise with Interest Rate Rises

Cannot make additional Payments

Cannot Redraw on Equity

Early Termination Penalties

No decrease in Interest if Interest Rates Fall

Interest Rate higher than on Variable Loans

Combination Loan:

Part is Fixed Interest, Part is Variable Rate

Can make additional Payments

Introductory Rates Loan: (Often referred to as "Honeymoon" Loans)

Discounted Interest for an Initial Period – usually first 12 months

Higher Interest – Higher than on Variable Loans - after initial Period (Honeymoon is OVER!)

Refinancing Expensive (Penalties often apply for Early Termination)

I'll soon be reporting on the "red tape", fees, & process of buying a property in Aus!

Watch this space....

[Corne]

hi r

hehehe ek dink jy gaan dalk vir my moet prentjies teken... die blond slaan deur as ek daai lees!

maar dankie vir die moeite! dit gaan my baie help die dag wat ons gaan huiskoop!

corne'

[Bob]

A smart move, after you've heard all the hype AND done your sums from the big banks down the High Street, is to log on to Member's Equity Bank and check out their rates for home loans.

I got my Mastercard statement the other day, from Member's Equity, and a flyer dropped out explaining the interest rates ME were offering to its customers in comparison to the other 4 main High Street banks.

It would definitely be a big saving on a home loan, which is very often $100,000 or more.

. . . . . just a 1/2% interest reduction on a $200,000 means an extra $20 (R100) a week in your pocket!

If you are employed in Australia and, therefore, getting superannuation paid into a super account for you, you can check to see if your super scheme has a relationship with Member's Equity Bank. . . . the fully-fledged bank set up in the 1990's by the super schemes around Australia to give its members better deals than the major banks.

[Riekie]

Thanks Bob! I remember you mentioning Member's Equity a couple of times before relating to other financial matters & I've made a mental note to contact them when I'm ready to buy.

[gerrieb]

Hi,

Is it possible to purchase a property when you are still on the 457 visa?

Regards,

Gerrie

[Riekie]

Yes, but you have to make a special application and you don't get the $7000 grant.......