Exploring The Australian Mortgage Option Part 3

So far we have seen how it is important to know what your mortgage options are and we have discussed what an Australian Mortgage is. Now we will continue to explore the Australian Mortgage option and learn more about it.

More About How The Australian Mortgage Works

When you get an Australian Mortgage you will have a Home Equity Line of Credit (HELOC also referred to as an ALOC). This is a variable rate that is typically higher than what a regular mortgage rate would be and it can change on a regular basis. But the higher interest rate is offset by the way that the HELOC is managed. Here’s how it works:

• Once you have found that perfect home you will get a HELOC as a first for your property

• The HELOC is used as your primary checking account, ATM and on-line bill payment account. It will replace your current checking and savings account.  All of your monthly income, whether from work, disability, dividends, IRA’s, or anything else, will be deposited directly into your HELOC. This will drive down the principal balance on your mortgage significantly.

• All of your monthly expenses such as groceries, and other bills are paid out of your mortgage. The longer the money stays in your account the less interest is paid due to the principal balance being lower. This way you are using your money to lawer your interest on your home mortgage instead of just having it sitting in a bank earning a minimum amount of interest. This will help you to pay off your mortgage faster because less money in being charged interest fees. So it is a smart and effective way to make your money work for you

In our next edition we will wrap up our discussion on the Australian Property Mortgage option.

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