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Beginner’s Guide to Mortgage What is a mortgage? By definition, it is a type of loan offered by the bank or other financial institution that a person can use to finance the purchase of a property, It’s commonly used for buying a home. Collateral Unlike other loans, A mortgage has collateral rights to your home. It means if you don’t pay the bank back on the agreed time they can take possession of your home and sell it in the process called “Foreclosure.” Principal amount & downpayment The amount of money borrowed to buy a home is called “Principal.” You can put down a percentage of the home’s purchase price by giving a down payment to decreased your loan’s principal amount. The lenders have a variety of down payment options that can figure out which one is the best option for you. Interest rate Lenders will give you charges on the loan that you borrowed and the amount is usually expressed as a percentage called “Interest rate.” Amortisation The major parts of your monthly payments are the principal and interest rates. These are the factors for reducing your debts in a process called “Amortisation.” It is a length of time that will take to pay off the loan and own their home entirely. Insurance Aside from a mortgage loan, it is also important to acquire home insurance suggested by the lenders to cover against disastrous events and other incidents that can cause damage or losses from your home. Mortgage broker What is a Mortgage broker? A Mortgage broker like Funding Force has a connection with the primary banks in the country. We serve as the median between you as a borrower and the bank, you’re borrowing with. We will help you to acquire housing loans in a way that we’re the ones who will communicate to the bank until it got approved. We make the process easier for the borrower and all of these services are free because the bank is the one who will pay us by the commission for all of the approved housing loans we offered to them. In Australia, 60 % of housing loans came from Mortgage brokers, this means 2 out of 3 people decided to hire a mortgage broker instead of personally going to the bank. Mortgage brokering is a smart way for you to acquire a housing loan. What are you waiting for? If you want to acquire your dream house, contact us on 03-8372 2018 Under the new laws, your tenant will not be able to stop paying the rent. But they will be entitled to.
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