Ready-to-Go Classic Home Loan Package*
Ideally suited to Home Buyers (including First Home Buyers), who have little or money/savings to put towards the purchase of a property.
The most financially demanding period of time that you experience during home ownership, usually takes place within the 3 year period that directly follows the purchase of your home. For First Home Buyers, this is especially a fragile time as they settle into the duties of home ownership for the first time and also commence dealing with the many added financial responsibilities associated with being a home owner.
During this financially demanding period of time, CommunityBE$T believes that it’s Ready to Go Classic Home Loan Package (Ready to Go Classic) will give better financial support to Home Buyers with a minimal deposit, than that which can be achieved with a conventional high lend home loan product. Ready to Go Classic is a combination of financial products that have been uniquely structured in a way to help minimise the cashflow pressures generally associated with property ownership during those most delicate years.
Ready to Go Classic is an innovative mortgage loan product that allows Home Buyers to borrow up to 100 – 105% of the property’s purchase price while retaining a lower mortgage interest rate and usually lower loan costs than that which is generally associated with a high lend 100 - 105% home loan product.
The structure of Ready to Go Classic lends to extra financial support of borrower(s) within the early years of home ownership, via the ability to lower monthly repayments and have access to a small amount of reserve funds if an unexpected financial event occurs. Also, on or about the 3rd, 4th or 5th anniversary of the loan, the monthly loan repayments will reduce by up to 20% giving the borrower(s) the option of meeting the lower repayment amount and improving their cash flow or alternatively, maintaining the original repayment amount and short terming the loan. Short Terming the loan reduces the overall amount of loan interest paid, resulting in a possible saving of thousands of dollars in interest payments.
In other words, within the first 3 - 5 year term of the loan (depending on the loan value ratio 100 – 105%), borrowers will have the ability to reduce their monthly loan repayment commitment (by up to 7%) and/or draw on some emergency cash from the loan (up to approximately 1% of the loan amount).
Depending on the purchase price of the property and the financial entitlements available to First Home Buyers, the Ready to Go Classic may well represent a true No Deposit Loan where the home buyer(s) may not need to contribute any of their own funds towards the purchase of a property.
Let’s look at a hypothetical comparison between a ‘Hi Lend 100 Home Loan’ and the ‘Ready to Go Classic’.
Tim and Veronica are First Home Buyers wishing to purchase a $400,000 house in Wollongong a regional city in NSW. They are eligible to receive the First Home Buyers Grant of $7000 and full exemption from paying any stamp duty under the First Home Plus scheme. Veronica’s parents have gifted them $4000, they have $4470 in savings and are receiving $3000 from the sale of Tim’s motor cycle.
They have calculated that their purchase costs will be as follows:
Solicitor Fees |
$1200 |
Pest & Bldg Reports |
$ 400 |
Deposit Bond |
$ 250 |
House/Contents Insurance |
$ 600 |
Moving expenses |
$1000 |
|
$3450 |
The loans costs and repayments associated with either loan are as follows:
Borrow: $400,000 |
High Lend 100 Home Loan |
Ready to Go Classic |
Mortgage Rate: |
8.57% |
7.65% |
Loan Establishment Fee |
$ 400 |
Nil |
Brokerage |
Nil |
$ 500 |
Legals |
$ 200 |
$ 200 |
Mortgage Insurance |
$14420 |
$ 9750 |
$15020 |
$10450 |
|
Contractual Monthly Repayments |
$3095.52 |
$2869.55 |
Total-Purchase & Loan Costs |
$18470 |
$13900 |
By using the Ready to Go Classic*,
- Tim and Veronica will save approximately $4570 in upfront costs and will use their savings in costs as a prepayment towards their Ready to Go Loan.
- The contractual repayments are approximately $225.97 lower than the 100% Hi Lend Loan repayments, but Tim and Veronica will pay the higher Monthly Repayment of $3095.52
- If Tim and Veronica experience an unexpected financial event during the first 3 year period of the loan, they will be able to request a reduction of at least $225.97 to the monthly loan repayment and/or access up to at least $4570 from their loan.
- If Tim and Veronica do not request any alteration to the loan within the first 3 year period, then on or around the 3rd anniversary of the loan, the repayments would reduce by approximately $704.89 (a reduction of 22.77%). At this point in time the loan balance of the Ready to Go Classic would be $375000 and the loan balance of the Hi Lend Loan would be approximately $390000
- If during the first 3 year period of the loan, Tim and Veronica draw the $4570 from the loan but do not alter the loan repayments, then on or around the 4th anniversary of the loan, the repayments would reduce by the same margin of approximately 22.77%. At this point in time the loan balance of the Ready to Go Classic would be $375000 and the loan balance of the Hi Lend Loan would be approximately $382000
- Provided there are no changes made to the loan during the first 5 year period of the loan, then by the 5th anniversary of the loan, Tim and Veronica would have paid approximately $19600 less in interest payments as compared with the Hi Lend Loan.
A Ready to Go Classic Home Loan Package, takes a lot of the worry and financial uncertainty out of being a home owner, especially within those financially delicate years immediately after the home purchase. We know of no other loan that will give you the added financial support during those early years like the Ready to Go Classic.
So before you purchase your First or Next Home, check out the differences in security, support and savings that can be achieved with a Ready to Go Classic Home Loan Package.
‘Ready to Go Classic’ - Just another great value home loan package from CommunityBE$T!
To book an appointment with a Mobile Lending Strategist, simply phone the Finance Centre on (02) 4633 8700 or email us and we will contact you. Alternatively, you can submit your details for pre-application assessment by completing our 10 min Online Application, |
* Ready to Go Classic Loans are subject to application and approval. Terms, conditions and eligibility criteria apply. Fees and charges may be payable.
*The information provided above does not take into account your personal circumstances and is provided as a guide only. You should consider the appropriateness of the information having regard to your objectives, financial situation and needs. You should obtain independent legal advice at all times.