What Is the Difference Between Owner Occupied and Investment Property Loans? Note: You can find valuable tips on increasing your home loan savings in our thorough guide. Then, if and when you get approved, you will typically have to repay your debt in monthly instalments, which will include the principal and the interest rates you got (fixed or variable). Moreover, you will have to cover a portion of the house price yourself, and if you deposit around 20% of the total value, you will avoid paying lenders’ mortgage insurance (LMI). Owner-occupier loans are the most common type of mortgage product offered to future homeowners, so they follow a generic set of rules that apply to most home loans.Īs for most loan applications, banks first need to determine your borrowing power and capacity to repay the loan, so you’ll go through the pre-approval phase during which your income, available assets, and existing loans and other obligations are considered. Well, borrowing money as an owner-occupier is appealing to Aussies because the owner-occupied loan rules are more lenient than those of other types of credit products.įor example, since they are considered low risk (you must rely on a regular paycheck to get approved), these loans come with lower interest rates, smaller deposit requirements, and loan term adjustments.
When applying for a home loan in Australia, the rates and terms offered by lending institutions will vary depending on the type of credit you need and how you plan to use the property. On the other hand, if you purchase property to use as a second or vacation house, invest in it or become a landlord who rents, you’ll be known as an absentee owner.
So what does owner-occupied property mean? In essence, owner-occupancy is a form of ownership wherein the title-holder also resides in the house.īelow, we tell you more about it and how it affects your loan options! What Does Owner Occupied Property Mean ?Īs the name implies, an owner-occupied property is a type of residence owned and occupied by the person who has bought it (with or without a loan) with the intention of living in it. When getting a home loan in Australia, lenders ask you whether you’ll be an owner-occupant or an absentee owner as they need to adjust their conditions accordingly.
0 kommentar(er)
