Mortgage & Loan Types

MORTGAGE&LOAN Product Infographic How to work out which Loan Product is right for YOU. To illustrate loan product types, let's use the analogy of a Lender as a Fat Cat & Money as Fat Cat Food. Index Variable Rate Loan = Lender Two types of Variable Rate Loans, Standard & Basic. The only difference are the interest rate charged & features available, i.e. Extra Repayments, Redraw, Off set Account, internet transactions, etc. Basic Loan may be restricted to these features. Principal Loan Interest Rates on a Variable Rate will go Up & go Down over time due to economic %. factors. = Interest Additional %3D Repayments Principal Loan and Interest Tem Repayments $% = Interest Rate Interest Rate E Movement Period of Term = Years to repay Loan Additional repayments help pay down loan quicker over term of Loan. These funds can be redrawn = Borrowers Discount Variable Rate Loan Discount, Intro or Honeymoon Interest Rate loan periods can range from 6 months to 24 months, after which the interest rate revertsto the Standard Variable Rate. In order for the Lender to ensure they recoup the cost of the discount, the revert rate may be higher than the Standard Variable rate loan. The discount period in not a fixed rate period fluctuate with economic market conditions. the interest rate will Discount Period. Term Fixed Rate Loan A Fixed Interest Rate loan is guaranteed to remain at the same rate during an initial term, regardless of what may occur in the market with Variable Rate loans. Traditionally lenders may offer terms of between 1-5 years for fixed rates, however some Lenders may offer terms of up to 10 years. $% Fixing a loan before rates move up can be positive moe Fix Rate Term TTT Term After Fix rate term product switches to Fixing a loan when rates are high can be negative move. Rate is locked in & pay high interest variable rate or can be fix for another term. Term - Loan Cycle. Fat Cat provides principal funds to borrowers who pay back principal with interest & additional Term repayments. Line of Credit - Equity Loan A Credit Limit is the Max loan amount available Interest Only Repayments Available Credit to draw, is achieved by making extra repayments on top of the interest repayments Loan Cycle. Fat Cat provides principal funds to borrowers who pay back only the interest. All additional funds should Term Loan Balance be credited into the loan to make available credit to draw. Term can be an Evergreen Term (Term with No end) or a Maximum 30 year terme Interest on Line of Credit loans is calculated daily & charged monthly Interest Only Loan $% d 0/ Interest Only Repayments Loan Cycde. Fat Cat provides principal funds to borrowers who pay back only the interest. Loan Balance Tenm Term can be from 1 year up to 15 years then converts to a Principal & Interest term Interest on Interest Only loans are calculated daily & charged monthly. Off Set Account + Loan A loan amount of $100K with $40K in Off-Set account, off Funds contributed into the Off-Set account will off set the loan balance. set's the loan at $60K. Interest is calculated on the $60K More funds credited into the Off-Set account reduce the amount of interest charged in the loan account. i.e. Income or wages, tax refunds, etc. Website: www.neomoneycom.au Twitter: https://twitter.com/neomoney Linkedin: http://au.linkedin.com/pub/steve-tovas/22/20a/2a4 Disclaimer: No Fat Cats were injured or harmed in the making ofthis Inographic. This Intbgraphic is for informational purposes orly. No waranty or representations asto its accuracyor completeness is provided. Neomoneyare nat liable to your or any ather person for loss, damage or irjury arising fomthe use of, or reliance on, this information, nduding but not limited to loss sufered in cornection with incorrect or out of dte inomation. Al care has been taken in the preparation ofrepayment schedues, graphs and any other representation of loan products, athough no resporsibility will be held for the reliablityofthe information. The Lenders or NeomIoneyare in no waybound bythis inormation. Each Oustomer should seek independent legal advice. NEOMONEY