If you are looking for a simple mortgage with no ongoing fees, a basic home loan may be right for you. A basic home loan doesn’t have a lot of flexibility in terms of usage and terms. Still, they give you lower interest rates (even though they are typically variable rates), no ongoing fees and a lower, sometimes even waived, application fee.
Who can benefit?
It may seem counterintuitive, but basic loans may not benefit all borrowers. You may benefit from a simple loan if:
- You are applying for a loan smaller than $250,000.
- You don’t need the features that come with traditional home loans, such as offset accounts, credit and ATM cards, repayment holidays or a cheque book.
- You don’t want to switch lenders.
- You find handling money and budgeting difficult.
How to apply
The application process for a basic home loan is essentially the same as a traditional home loan. Besides an application, you also need to submit the standard documentation, including the proper IDs, income verification and financial documents, assets you may have and other loan documents you may currently be borrowing.
How to find the cheapest loan option
When comparing traditional home loans, it is recommended that you compare the interest rates each lender provides. However, with simple home loans, you should compare hidden fees. You should check for settlement fees such as legal and attendance fees, redraw fees and application fees.
Finding the cheapest loan option available to you can be challenging. With so many lenders out there, how do you know whose offer is the best? If you are applying for a basic home loan, Mortgage House can help. As Australia’s largest non-bank lender, we have a wide range of financial products and loan options available for you to choose from. Our team of brokers can help you secure a basic home loan with the best interest rate. Visit our website to learn more.
