KeyInvest Property Loans
How KeyInvest helps you:
KeyInvest offers a choice of over 30 Lenders who are committed to service standards that provide us with quick decisions.
We keep a close eye on post approval proceedings, including the prompt issue of all documentation.
We know who to deal with at the Lending institutions, and use this knowledge to get your Approval processed quickly and efficiently.
We are always here to assist you in the future.
KeyInvest Property Loans, as a division of KeyInvest, has a long and proud history of helping customers achieve their property goals.
We have been helping clients choose the right home loans since 1992.
Our Consultants are fully compliant, extensively trained and informed on product and industry changes.
They all completely mobile and can advise you on Loan choices at your office, home or just about anywhere that’s convenient for you.
Because our Consultants spend all day working on finding the best Property Loans, they can help make the process of choosing the right Loan so much easier.
This service is free, independent and backed by KeyInvest, one of the oldest Friendly Societies in Australia. That means you can talk with a KeyInvest Consultant knowing that we have the history, experience and independence to find the best Loan for you.
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Why use KeyInvest
When you choose a KeyInvest Property Loan manager, you will get:
- Free independent advice on all the best loans
- Honest, Experienced Lending Managers to guide you through the mortgage maze
- State of the art technology that compares loans for you
- Completion of the paperwork to ensure a smooth settlement
- Ongoing professional advice and support
- Ongoing contact to make sure the Loan fits your requirements as your personal and financial situation changes.
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Choosing a Mortgage
When choosing a Property Loan, there are a number of features that you should consider before making your decision. Will you be able to:
- Switch from a variable rate to a fixed rate
- Make additional and lump sum repayments
- Redraw
- Use a line of credit to pay off your home sooner
Will the Loan have:
- A Lender establishment fee
- Any Account keeping fees
- a 100% mortgage offset account
- Any penalties for early discharge
- The ability to make Weekly, fortnightly or monthly repayments
- Direct crediting of salary to loan account
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Traditional Loans
This loan has been around forever! Your loan is normally approved for a period of up to 30 years (life sentence).
Regular repayments are required either monthly, fortnightly or weekly and most of this is credited to the accumulated interest, with the remainder going towards paying off the balance (principal) of the loan.
The interest rate for traditional loans is higher than "low frills" loans (we’ll get to these) as you generally have a little more flexibility with this loan.
Most lending institutions offer a discounted start-up period for 12 months which is designed to entice you into taking one of these little beauties (for them!), however the honeymoon is short lived as the remaining 24 years is at the standard variable rate.
Strangely enough, the majority of homebuyers still opt for this type of loan and the lenders do little to discourage this with billions of dollars spent in marketing Australia wide.
Benefits
Discipline — Regular repayments help with budgeting.
Redraw — Most institutions will allow you, subject to certain criteria, to withdraw additional repayments you have made over and above the minimum repayment.
Extra repayments are usually allowed at any time.
Shortcomings
The interest rate is variable (aside from during the startup period) and you are at the mercy of interest rate fluctuations.
The interest rate applied is always higher than low-frills home loan rates.
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Low Frills Loans
Low-frills means exactly that — You normally get what you pay for and this is like flying economy class.
Some of the additional features such as redraw facility may have been taken out.
A few years ago when some of the new non-banks started offering their discounted home loan products to consumers – this was the loan offered. The reason for the lower rate is simple:
Fewer Frills = Lower Running Costs = Lower Interest Rate.
In recent times the banks have rallied
and produced their own budget home loans.
Today, on the whole, the banks offer budget loans at interest rates
quite substantially lower than their non-bank counterparts.
The non-banks are now marketing the fact the banks charge maintenance fees whilst they don’t (the marketing has moved away from being interest rate driven), however the astute home loan borrower will measure just what impact these on-going fees have on their loan repayments, and then select their loan accordingly.
Benefits
Discipline — Regular repayments help with budgeting.
The interest rate applied is always lower than traditional loans.
Extra repayments are usually allowed.
Shortcomings
Money held in normal savings accounts with the same institution does not reduce your home loan rate (see 100% offset loans).
The interest rate is variable and you are at the mercy of interest rate fluctuations.
Redraw is generally not available although there are some exceptions.
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Line of Credit
This type of loan can be either your best friend or your worst enemy.
Used correctly (as illustrated by a mortgage reduction plan), you will enjoy the benefits of paying your whole salary into this loan and instantly reducing the interest charged.
The net result is usually a staggering reduction in the time taken to pay out your home loan.
Used incorrectly, your loan limit will remain unchanged.
The key to managing this loan is budgeting and discipline as you always have access to your loan limit just like a credit card and abuse can end in financial self-destruction.
Benefits
Can readily access money by simply writing out a cheque or using an
ATM card which are both linked to this loan.
By placing your salary and savings into this loan you will dramatically
reduce the interest charged.
A mortgage reduction programme can assist you with budgeting and illustrate exactly how quickly you can pay out your loan. Extra repayments are allowed at any time.
Shortcomings
Ease of withdrawal ability means this loan can be subject to abuse by non-disciplined borrowers.The interest rate is usually higher than traditional and low-frills loans.
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100% Offset Loan
If you like the concept of Line of Credit loans but are a little undisciplined, then this may be your answer.
Styled similarly to the traditional loan, ( ie principal and interest payments reducing over time), this has the wonderful benefit of reducing the interest component of your loan by 100% of the amount you hold in your savings account (which is linked to your home loan).
It works this way:
Loan Amount $100,000 — Savings (Offset) $5,000
You Pay Interest on $95,000
Put simply, if you have a home loan of $100,000 with $5,000 in your savings account, you are only charged interest on $95,000 of your loan.
This feature provide a tax effective form of savings without the revolving limit.
Benefits
Can readily access money in savings account (offset account) with ATM or cheques.
Loan is reducing every month as repayments are required to pay off the loan over a set period of time.
The loan is effectively lowered by the savings in the offset account daily.
Shortcomings
The interest rate is usually higher than traditional and low-frills loan but lower than a Line of Credit.At this stage less than a handful of lenders offer this type of loan.
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Home to Home Loans
If you have your home on the market and in the meantime stumble across the home of your dreams, this loan can help.
Originally called "Bridging Loans", this loan has come a long way as lenders used to see this as a way to make a quick buck out of you but now it is a way of assisting you and encouraging you to move your accounts to them.
This is how it works:
- The lender advances the money to buy your new home (depending on your equity in your current home, you can sometimes also include all fees)
- The interest charged to the new loan can be either paid by you or capitalised. Capitalised means added to the loan
- When the original property is sold, proceeds are deposited to the new loan. The amount left owing becomes your "End Loan" and you start to make normal repayments as this new loan replaces your old loan.
Benefits
You can buy your new home before you sell your existing home.
You can avoid moving into a rental property and paying rent by moving directly into your new home.
The offer you place on the new home will not be "subject to sale" and you will therefore be able to negotiate a better price.
Shortcomings
Nothing comes for free and interest is charged on the full amount of the new loan.
If you don’t sell your existing home in due course, then the interest bill can add up to something you would rather not have to pay!
This loan relies on you having sufficient equity in your existing property to support the purchase of both.
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Fixed Rate Loans
Depending on which way interest rates are headed, this loan is excellent if interest rates are on the upward trend. By fixing your interest rate for a period of time, you can effectively buy insurance against rate fluctuations and know exactly what your repayments will be for the remainder of the fixed period.
On the other hand if interest rates go down, you may find yourself paying a rate much higher than those people on variable rates.
When unsure about whether it is better to take a fixed or variable rate (in view of uncertain future rate variations) it may be wise to take a "split loan" (see next section) which gives you the option to take a part variable and a part fixed rate loan.
Benefits
You can "lock in" the interest rate for a period of time and insure yourself against future interest rate rises.
It is easy to budget for the same regular repayment each month.
Shortcomings
If interest rates go down then you will end up paying more for your loan than everyone else.
"Fixed rate" also usually means "Fixed repayments" and most lending institutions will penalise you for making additional repayments (However some will allow extra repayments).
If you want the flexibility to make extra payments this Loan may not be for you.
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Split Loans
This loan is like betting on both black and red at the roulette table.
Most
of our customers who are confused about whether interest rates are
going up or down usually end up with a "Split rate" loan. With
this type of loan you nominate how much of the loan you would like
to fix and how much you would like on a variable rate.
The reason for this is simple:
- If interest rates increase, then the portion of the loan which is fixed will provide you with some comfort that part of your loan is "fixed"
- If interest rates go down, then comfort is also gained from the knowledge that the variable rate portion of the loan will reduce accordingly.
- This type
of loan is becoming increasingly popular for obvious reasons.
Benefits
You can "lock in" part of interest rate for a period of time and
insure yourself against future interest rate rises.
You can also leave part of the loan on "variable" in case interest
rates reduce.
Additional payments are allowed on the variable portion of the loan.
Peace of mind no matter which way rates are heading.
Shortcomings
If interest rates move down, you will only get a reduction on the variable part of the Loan.Only a limited number of lenders offer this home loan product.
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Loan Insurance
Many people insure the house, the car and contents, but don’t insure themselves or their own income.
Most lending institutions do not require you to have personal protection, but they do insist that you have insurance to protect any portion of your loan that represents more than 75-80% of the house value – they have protected themselves; have you?
You can buy Mortgage Insurance and for many people this should really be considered.
It is a priority to understand the options and implications of protecting the family and the family home.
Benefits
If you are ill or injured, payments of the mortgage and other expenses are guaranteed.
Should you die or be injured and unable to return to the workforce whilst you still have a Loan, the mortgage can be paid off and family home protected.
Up to 75% of your earned income can be protected to the age of retirement + full tax relief on premiums.
Shortcomings
Good health is important for protection to be provided — if health fails, it may be too late to arrange cover.
Like all insurance products, you need to be aware of what you really need and expect from the product, and make sure this is what you buy.
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Seniors Home Equity Release Loan
This loan is available to people over 60 years of age who are looking
to enjoy a better lifestyle. This is achieved by accessing the equity they've
built up in their home over the years.
Neither the initial loan amount nor the interest on the loan needs
to be repaid until the home is sold or passes to the estate.
Benefits
Enjoy a better lifestyle without selling the family home.No income servicing criteria.
No repayments until the home is sold.
Money can be used for personal or investment purposes.
Shortcomings
Amount of loan increases over time.Need to seek legal advice before funds are made available.
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