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Finance

So what exactly is a home loan?

By ,| 3 min read

When you are hoping to buy a property it can often feel like you must fight a battle before you ever get settled in your new home. You start seeing terms like stamp duty and Lenders Mortgage Insurance (LMI) getting thrown around and they’re unfamiliar to you. We may have the answers you need to own your own home sooner.

Learn more about the costs involved in buying a house here.

What is a home loan?

A home loan - also known as a mortgage - is a loan you take from your lender in advance that you pay back over a set period of time, in order to gain security over your desired property. The loan term is usually around 25-30 years with regular payments being made monthly or fortnightly to your lender. If you’re unable to make your repayments, you may have to sell your home in order to pay back your debt.

How much can you borrow?

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How do I get a home loan?

Booking an appointment or chatting with a Lendi Home Loan Specialist will help you to determine what home loan will best suit you and your financial situation. They can do the hard work for you by assessing your employment and income, borrowing power and organising repayments and repayment frequency. It actually is not that hard when you've got an expert helping you.

What is pre-approval?

roof-dormer-window Once you’ve consulted with your Home Loan Specialist and filled out your application online, you may be able to gain conditional or pre-approval while your lender conducts a credit check and does a property valuation. Pre-approval is valid for at least 3-6 months for most lenders and it shows your lender that your personal situation meets their criteria. With a reliable conditional approval, lenders will be able to speed up your application process which will result in a shorter closing period for you.

Lendi makes it faster and easier to get a better home loan. Compare rates in 30 seconds.

What is unconditional approval?

This is the formal acknowledgement that your home loan application has been approved by your lender. Lenders will conduct a credit check again in order to see whether your circumstances have changed or not. This acknowledgement gives you that assurance that you will be able to get a loan for your chosen house.

What is settlement day?

This is the official day when the property settles meaning payment for the property is made and ownership is transferred. For a new purchase, this is the day where the property owners are handed the keys to their new property. For refinance, this is the day where the borrower's home loan is officially switched over to a new lender or updated terms.

When you’ve reached settlement day, you’re the official owner of your new home. If your financial situation changes, consult with your Home Loan Specialist who can review your current home loan situation and look for an option better suited to your new financial abilities.

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856, Credit Representative 518849), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Aussie business. Our mission is to provide Aussies with the right experience when choosing a home loan from our panel of lenders including ClickLoans, a related body corporate of Auscred Services. Although Lendi compares over 1600 products from over 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 40% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. We have an independent and founder led board.
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
EXAMPLE: This example is current as at 20th October 2016. A Click Loans Online Principal and Interest Loan of $150,000 over 25 years has monthly repayments of $767. This is calculated based on the interest rate of 3.69%, comparison rate of 3.69%, upfront fees of $0 and annual fees of $0.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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