Helping people reach their goals
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Helping people reach their goals

By getting people the loans they need, I can help them reach some financial security. My loans help people by new cars, extend their house and consolidate expensive debts. Once they get their money issues under control they start to do better in all aspects of their life, they have better relationships and start doing better at work. It's great to be the catalyst for positive change in my clients life. If you are also in the financing industry or a client wanting to understand how financing works, please read on. This site is an exploration of how we decide who to lend to and how much we can lend them.

Helping people reach their goals

What You Need to Know About Owner-Occupied Loans

Monica Ryan

Owner-occupied loans are a product for people who intend to live in the houses they buy using bank credit. These loans are closely associated with investment property loans, which are for people who plan to lease or rent out the property they build. The focus of this article is owner-occupied loans. It details the benefits and considerations to make when applying for these loans. 

How Do Owner-Occupied Loans Work? 

Owner-occupied loans are a favourite for most people due to their friendly rates. However, lenders have strict conditions. In most cases, you will be compelled to live on the property for at least twelve months and move into the property within a specified period (usually up to 60 days).

However, there are cases that you can take the owner-occupied loan and still turn your home into an investment property. For instance, you could lease out some of the space and still live on the property. However, you must understand the fine print of the loan contract to ensure you do not breach the lender's terms. If you do, you could be accused of mortgage fraud. Besides, the lender will automatically change your loan into an investment loan with higher interest and a shorter repayment period. 

What Are the Benefits of Owner-Occupied Loans? 

The primary benefit of owner-occupied loans is that banks consider them a low-risk product. Therefore, borrowers enjoy low interest and a longer repayment period. Besides, the loan does not have harsh penalties compared to other products. You may also benefit from government incentives such as stamp duty exemption and grants when taking an owner-occupied loan. 

Considerations to Make When Taking Owner-Occupied Loans 

Although owner-occupied loans are pretty attractive, it is always wise to conduct your due diligence before taking the loan. Typically, you will be looking for a lender with friendly terms that guarantee long term savings. For instance, a few points off the interest rate could save you thousands of dollars. Besides, check the terms of the loan contract. For instance, what are the applicable penalties? When do you qualify for refinancing? What happens if you wish to repay the loan in a shorter time frame?  If you are in a hurry to move in, you will be interested in the bank's eligibility criteria. Besides, inquire how long the bank takes to process the loan. 

Owner-occupied loans are an easy and affordable way to commence your property ownership journey. Hire a company like PINK FLAMINGO HOME LOANS to assist with the technicalities of the loan application and explain the terms of the loan.