Are you getting the best deal? Understand your mortgage
Fri Oct 28 00:00:00 AEDT 2016
Purchasing a property is a serious financial obligation. Once you’ve done the calculations and know how much money you need, it’s time to decide on a mortgage – but what should you be looking for?
Before you buy, talk to a mortgage broker, do your research and compare mortgage rates, to make sure your loan is the best option for your situation. By comparing mortgage rates and other terms that affect your mortgage loan, you can help to ensure your investment is a wise choice for both today and the future.
Choice Home Loans has put together some handy questions so you know what to ask your mortgage broker.
Are these really the best rates for me?
While lots of mortgage lenders will swear they offer the best rates, it isn't always the case. There are thousands of mortgage loans available. If you don't compare at least a few of them, you may be cheating yourself out of a good deal, and possibly costing yourself thousands of extra dollars throughout the life of your loan.
How will changing rates affect my mortgage?
By researching a variety of mortgage loans, you may be surprised to find a home loan that is better suited to your needs than the one you had previously selected. Having options means you can compare and identify what types of loans are right for you.
Also, talk to your mortgage broker about how a change in interest rates will affect your mortgage repayments, so you’re aware how your financial commitment might or might not change.
What other features should I consider?
Interest rates aren’t the only factor that will affect your mortgage and your repayments. Consider additional features like an offset account or a line of credit. The balance in an offset account will be deducted from your mortgage balance, reducing the interest you pay each fortnight or month. Setting up a line of credit may give you more freedom to make future investments at the same rate as your mortgage.
Flexible mortgages may also allow you to have your pay deposited into your variable home loan account. You’re generally able to withdraw from this account as required to pay for bills and other expenses.
What sort of fees should I expect?
There can be a number of different fees associated with taking out a mortgage. Some will only be a one-off fee, like an establishment or set-up fee. Other administration fees might be charged every month or every year. You can also expect to pay Lenders’ Mortgage Insurance (LMI) if your deposit is lower than 20%. These fees should all be factored into your budget, as they can cost you thousands of dollars on top of your repayments.
You may be charged a fee for an early termination of the loan, breaking a fixed mortgage rate, refinancing your loan, and even settling your loan when you’ve paid out your mortgage in full. It’s important to understand what you will and won’t be charged for.
Get the right advice
If you would like to compare home loan rates and conditions, talk to a Choice Home Loans mortgage broker today. Our qualified brokers will be able to help you understand your mortgage repayments so you don’t find any hidden surprises down the track.
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