As you scrounge and save throughout the working years to purchase your precious abode, did you know that giving some extra thought to your home loan could help you make significant savings while shaving the years off your home loan?
Very often, home buyers caught up in the frenzy of buying their first home spend little time on choosing their home loan, settling for the lowest rates or not-so-competitive deals, losing money in the process that could have been used elsewhere.
A home loan is one of the most important financial decisions you would make in your life. Thus, it is essential to understand different types of home loans and compare rates and features provided by various lenders to choose one that is most suitable for your situation.
The interest rate, processing charges, repayment terms, etc., are some important factors to consider before choosing your mortgage provider. We suggest you compare various home loan options minutely, taking into consideration the following points:
Loan Amount – Depending on your income and the value of the property you plan to purchase, most banks require a 20 percent deposit before approving your home loan. However, some lenders will approve you for high LVR loans on payment of lenders mortgage insurance. In addition, certain professionals such as doctors are also eligible for high LVR or discounted home loan deals. A mortgage broker could help you find the right home loan deal for your situation. Ask an expert now.
Interest Rate and Features – The interest rate on your home loan is a major factor that will determine its cost. As a start, you must understand the different types of rates available in the market (learn more about fixed, variable and split loans here). Once you have made up your mind, compare apples with apples to choose a home loan option that is most aligned with your financial strategy.
You can start by comparing mortgage rates online to choose the lowest home loan deals in the market. However, cheapest isn’t always the best, and it is better to shortlist home loans by the features you require before starting to compare the rates.
Click Here To Find The Right Home Loan Deal & Start Saving Today!
Here are some of the essential features you may consider having in your home loan:
- Offset account
- Free additional repayments
- Free redraws
- Repayment holiday
- Split rate
Fees – The fees on your home loan can make all the difference on what it would cost you. Lenders charge both upfront and ongoing fees on a mortgage. It is advisable to always ask for a key facts sheet to understand various fees charged by the lender in detail, which can make a seemingly low interest rate loan quite expensive overall. A key facts sheet gives you a snapshot of your home loan with all the fees included, indicating what the mortgage would really cost you.
In general, the upfront fees include the application fee, legal fee, lenders mortgage insurance, etc. Ongoing fees include late payment fees, the fees for various features you subscribe to, discharge fees, etc.
Tip: The comparison rate of a loan is found next to the advertised rate and gives a better idea of what the loan will cost you overall, as it also takes into account the fees and costs associated with the loan. Use this comparison rate calculator to make an informed decision.
Reviews and awards – Customer satisfaction level of the big four banks has been quite low in the past few years. However, there are several smaller lenders in the market who are not only giving the big banks a run for their money in terms of low interest rates but also scoring high through their stellar customer service.
As a borrower, you don’t want to be stuck with a lender who is not responsive to your needs and does not answer your queries. Customer reviews about lenders and industry awards received by lenders for their services as well as specific mortgage products can help you choose a lender that will serve you well.
HashChing offers you competitive home loan deals from over 60 lenders across Australia. In addition, our home loan comparison feature allows you to compare up to three home loan deals at a time, including features such as rate of interest, comparison rate, application fee, ongoing fee, etc., helping you choose the best home loan deals in the market.
By Vidhu Bajaj
HashChing Content Writer