Always ask the correct questions to get the right loan that suits your needs and objectives.
Getting a home loan is often the biggest financial decision you can make in your life, therefore, it is essential to consider all the factors before you commit to a loan. Here are some of the most important questions to ask before you make your final decision.
What does the whole loan package consist of?
The interest you pay on your mortgage represents only one part of the overall package of fees that you will be charged on your loan. It is imperative that you factor in other costs such as one-off establishment fees as well as charges for additional features such as credit cards and offset accounts. Mortgage calculator tools, as well as an experienced mortgage broker, can assist you with this.Can I get a discount?
It is our experience that major lenders will have a standard variable home loan rate, but more often than not, this is not necessarily their only or best deal. Always ask about the basic rate, which often includes a rate discount if you make the decision to have fewer features included in your home loan package. When you have a large deposit, often lenders may offer you a rate reduction.
How is your credit history?
Lenders will often offer discounted home loan rates to their Blue Chip customers, on the proviso that you have a good credit history. It is always worthwhile shopping around to check other available deals, but quite often – you stand the best chance of getting a lower rate with your existing bank – although has changed in recent years. Quite often, lenders may also offer you a lower rate if you have a higher deposit in your savings account relative to the value of the property you wish to borrow against.Can I make extra payments?
The only real way to pay off your mortgage faster is to make additional loan repayments. This has the effect of reducing the amount of interest you pay over the term of the loan. Always find out from your mortgage broker if there is a limit on the number of extra payments you can make in a year, and if there are any penalties for paying a loan out early. Penalties and limits usually exist on fixed-rate loans.Is a redraw facility available?
Some loans will allow you to redraw any extra payments that you have made. While the extra payments will reduce your loan balance, some lenders may choose to charge a fee to redraw funds.Have you engaged a mortgage broker?
Mortgage brokers can provide good advice on how to best compare the home loan rate market, and can often secure you exclusive deals through their relationships with lenders. .
