What is the condition of basic home loans?

Basic home loans are exactly that, basic with no bells and whistles. No monthly fees, no free credit cards etc. The downside is most lenders don't allow you to negotiate the rate on a basic home loan. Speak to a mortgage broker and they will guide you on which lenders are good for basic products and which one's we can negotiate the rate on

Each lender assesses loan applications based on their own credit policies and guidelines. Your eligibility for a basic home loan will be determined by these standards and guidelines, and it can vary between lenders. However, there are many common guidelines followed by many lenders. 1. The type of borrower you are You must be at least 18 years of age to be approved for a home loan, however, many lenders are hesitant to lend to older borrowers. If you are 55, and getting a 30 years home loan, banks may need you to provide a written exit plan to demonstrate your ability to repay your home loan after retirement, and they may only approve for a shorter loan term. 2. Your employment Lenders assess home loans based on a stable source of income. Depending on if you are working for a company or if you are self-employed, the assessments are different. For PAYG employees, you need to prove your income with payslips, either full-time, part-time, or casual employment. If you are a casual or seasonal employee, it is generally harder to get a home loan. Lenders prefer someone who is employed in the same job for 12 months or in the same industry for two years. For the self-employed, since you do not have payslips, you will need to provide alternative documentation to prove your income, such as Business Activity Statements, tax returns or a letter for your accountant. 3. Your financial situation Lenders will assess your financial history, habits and overall financial position by assessing your income, expenses, assets, liabilities, saving deposits, and credit score to determine your ability to repay your home loan. Your mortgage borrowing capacity is determined by your income, expenses, and any existing credit facility such as credit cards you own. 4. The amount you are borrowing The size of the loan you are applying for also affects how lenders assess your application. Lenders generally lend up to 80% of the loan-to-value ratio (LVR), which means you will need to have a 20% deposit to finalise the purchase. You may seek a higher LVR, but lenders will charge a lender mortgage insurance to reduce lenders’ risks. 5. The type of property you are buying The property you intend to buy will be used as security for your home loan. It means that if you default on the loan, your lender will sell the property to recover the money they have lent you. Because of this, lenders have a set of internal policies and guidelines of the type of property lenders would accept. Some lenders have restrictions on which postcodes they will lend in, for example, some lenders don’t accept properties in the rural areas, undesirable areas or areas with oversupply of high density apartments. Some lenders don’t accept property size below 50sqm, or over 10 hectares of land. 6. The reason for purchase Lenders will want to know why you are purchasing the property, as it will determine the type of loan you can get, as well as the amount you can borrow. If you are buying as an owner-occupier, you are likely to get a home loan with a lower interest rate. For investment properties, will have a tighter lending criteria and higher interest rates, but you can use rental income to increase your borrowing power and service your loan.