What to know about your first home loan

When you’re choosing your first mortgage, there are a number of decisions to make. We’ve broken them down in this quick explainer.

For many first-time homeowners, the period from applying for a mortgage to collecting the keys is both exciting and nerve-wracking. After all, there are lots of different moving parts to get your head around, from applying for finance to managing contracts.

With that in mind, we’ve tried to make the loan aspect as simple as possible and have put together this little explainer of how things work.

Finding the right loan for you

There are a few things to consider when selecting a loan, including whether you want the flexibility of a variable loan or the certainty of a fixed-rate loan – or a bit of both. Similarly, are you looking for some additional features – such as an offset account or redraw facility – or would you prefer more of a no-frills loan? It all comes down to personal preference.

Here are a few flexible features in a bit more detail:

  • Split your loan – You can choose to have a loan that is partly fixed (interest rate doesn’t change) and partly variable (interest rate changes).
  • Choose your repayment frequency – Depending on the loan you choose, you can pay weekly, fortnightly or monthly to align with when you and your family get paid.
  • Have an offset option – If you choose a variable-rate loan, you can select an offset account. When you put savings into the account, the balance is then ‘offset’ against what’s owed on the loan. This reduces what you pay in interest.

Applying for the loan

Once you’ve selected the loan you want, it’s time to apply. We find the online application process takes between 10 and 15 minutes, as long as you have the right documents handy. We’ll need your driver’s licence (or other identification), employment documents and either your bank statements or access to your online banking.

After you have filed the application, we’ll go over it to make sure it’s in line with your budget. We may ask you for additional information or organise a call with you. If you’re approved, we’ll send you the contract to sign, either online or through the mail.

Remember, you can always speak to one of our lending specialists to get more information about picking the right loan for you.

The Police Bank team is here to support members through the entire home buying process. You can reach out anytime for assistance or advice. To get in touch, click here.