Frequently Asked Questions

Confused by All the Home Loan Options?

LC Homeloans have put together some answers to common questions posed by customers looking to take out a home loan. We are adding all the time to our FAQs, so please call back.

If we haven’t answered your question, please call 0413 609 309 or contact us through our web form by clicking here.

Why Us a Broker?

In Australia over 50% of all home loans are done using a mortgage broker. By using a broker you are given more options. The lending policy can vary from Lender to Lender and while you may qualify for 1 you may not qualify for another.

Also lenders do offer special rates from time to time and as a broker we do receive daily correspondence from all lenders on any rate and policy changes.

What is Redraw?

Redraw is the amount of money available in a home loan that can be redrawn at a later date. Generally any payments made over the minimum repayment amount is then allowed to be redrawn at a later date.

If the loan is fixed there can be restrictions on making additional payments and this does vary from lender to lender.

What is a Fixed Loan ?

The interest rate can be fixed from 1 to 5 years and some lenders allow 10 years.

Can Home Loans be Part Fixed and Part Variable?

Yes this is common for a portion to be fixed and variable.

What is Rate Lock?

This is optional and allows the fixed rate to be locked in at time of approval. There is a cost and this varies from lender to lender.

What is an Offset Account?

This is called a package loan where the home loan also has a transaction account linked to the home loan. The monthly home loan interest is calculated by reducing the credit balance held in the transaction account from the home loan balance.

Most lenders charge an annual fee for this loan.

What is a Basic Home Loan?

A no frills home loan with minimal fees. On-going account keeping fees are usually lower than other loans.

What is a Line of Credit?

A loan limit is put in place and funds can be drawn up to the limit at anytime. Monthly interest charges can be capitalised OR paid depending on the lender.

What is Lenders Mortgage Insurance?

When borrowing over 80% of the value of the property the lender will have the loan insured by a separate company. This fee is passed onto the borrower and charged on a sliding scale. In some cases this fee can be capitalised onto the loan amount.

Who Pays the Broker?

Some brokers charge a fee to the customer but NOT LC Home Loans. LC Home Loans gets paid commission from the lenders. This is paid as an upfront payment and also an on-going monthly trail payment from the lender.

What is a Reverse Mortgage?

This product is a security lend for applicants aged over 60. The applicant must use their owner occupied residence as security. There is no requirement to make a repayment as the monthly interest capitalises.

However repayments can be made at anytime.