The lending business in Australia has taken its lead in the market after the deregulation allowed new lenders to move in and share in the property lending industry. The Melbourne mortgage market has become highly sophisticated over the time. However, the government still has a certain control over the market despite the deregulation.
There are different types of mortgages available in Australia nowadays. A borrower is advised to choose the type of mortgage that will best suit his need and of which he is capable of paying. Every borrower must protect his credit standing because his name and reputation is hanging on the line. If you have a good credit record, it would be easy for you to avail of another loan in case you might be needing the amount in the future.
The deregulated lending market produced various types of mortgages. One of these is the standard home loans. This is the traditional mortgage that most of us knew. Not all borrowers can avail of these standard home loans. The lender is rather strict so the only ones who can avail of it are those borrowers with perfect credit standing and those who have a safe and secure job with a consistent salary.
Most lenders will also ask the borrower to open a large amount of deposit for added assurance that they will pay back the loan. Creditors cannot be too trusting because their hard earned money is also hanging on the line.
Melbourne mortgage also offers low doc home loans. This is the most lenient type of loan. The borrower will not be required to submit pay slips to prove the amount of income they receive. This type of mortgage mostly applies to self employed individuals.
Naturally, if you are a self employed person or you own the business, you will not be receiving pay slips. However, it is a must that the borrower has a steady income. You will have to declare your income under oath in a legal document and submit the same to the lender.
This document will then be attached to the application for the loan. You will be committing perjury if there will be untruthful statements in this legal document. It would be for the best to admit your true income. The best thing about the low doc mortgage is that the lender may give the borrower options such as offset accounts. This means that the borrower may offset his loan with that of his savings or other accounts in the custody of the lender.
The borrower may also be given the ability to overpay and underpay the obligation. This means that if the borrower overpays his amortization for a certain month, then he may also underpay the amortization for the succeeding month.
Another type of loan offered by the Melbourne mortgage is the fixed rate mortgage. This would be very applicable to borrowers who want to have a constant monthly amortization. It will not be good to have different amount of amortizations every month. The rate of interest for this kind of loan will not change and will remain constant even if the market rates will go up or go down.