This is the third article in a series of articles on home loans in Australia. From these articles, you can catch up on mortgage news and information that can you can use to your advantage when applying for a home loan. This article continues with an analysis of the different products available today.

Lines of Credit

Over the past few years lenders have been inventing flexible products to entice customers to do business with them. One of the most flexible products that has been introduced to the market is the line of credit mortgage.

A line of credit is basically a flexible credit product secured against your home. The line of credit will carry an interest rate similar to rates found on other homes. This is in contrast to rates offered on other credit products, such as credit cards and personal loans, which can be quite high.

A line of credit home loan allows for great flexibility. Borrowers can make over payments whenever they like. They can also draw down funds as they wish up to a predetermined limit. As long as the loan does not exceed the upper limit, the borrower can use the line of credit as they choose to.

Borrowers can have their income paid directly into the mortgage. By doing this you can reduce the amount of interest payable and save money. Disciplined borrowers could save a large amount of money over time if they did not draw down on their loan at all. This is because every unused dollar earned would sit against the home loan each day instead of sitting in a savings account.

Line of credit mortgages have become a popular home loan product in Australia in recent years as borrowers look at more flexible options than traditional products.

Professional Package Mortgages

If you have a number of different loan products and you would like to bundle them all together, a professional package might be for you. Professional packages allow you to group together your mortgage and other loan products in order to save on fees and interest.

By moving all your loan products into a single package, lenders can be sure that they are getting maximum value out of you. For this reason they are willing to offer discounts on interest rates and fees if you take out a professional package.

Home loans within professional packages usually come with flexible options such as draw down facilities and offset accounts.

Professional packages usually come with a hefty annual fee. This fee covers all the products within the package so there should be no other fees to pay. The savings made through reduced interest and fees payable therefore need to be more than the cost of the annual fee payable, otherwise it is not worth taking out the package.

Care must be taken to calculate the costs and benefits of professional packages before applying for one. You might be better off with separate loan products or a line of credit on your home. Be sure to do your due diligence before applying for a package deal.

Author Bio: Read the latest Mortgage News and stay in touch with the home loan market at http://www.moneynet.net.au/. http://www.moneynet.net.au/

Category: Finances
Keywords: mortgage news, home loan news