I’ll probably soon be in market for home loans. Making myself prepared for the intricacies of mortgage. This will be our biggest ever financial decision. Want to venture in to it slowly to avoid hasty decision. I have written about some of my finding in tips for buying home and first things to consider while looking for home.
Purchasing your own home may be the biggest expense you will ever make. If you have saved for a deposit and have your finances under control, the next step is to look for the right home loan for you. Many lenders will offer you many different options. Check them all out but go for a trustworthy lender with a good reputation.
Be aware of all fees
Every home loan will come with fees. Ask if there are annual administration fees or monthly fees. These fees will all become part of your home loan, so it is important to know upfront what you are up for. Also look at how much your home loan application or settlement fee will be. You may also be charged a valuation fee. Your lender may also require you to take out mortgage insurance.
What features are offered
Does the loan allow you to put a little extra money towards your loan? Is there a fee if you pay off your loan before term? Is there a redraw facility or a mortgage offset? What is the maximum you can borrow? Will you be paying interest only or principal and interest? These are just some of the questions you should be asking.
Check out the mortgage comparison rate
A comparison rate will include all fees and the interest rate associated with the home loan. It does not include stamp duty. Comparison rates are calculated on the term and amount of the loan and the repayments. You can use the comparison rate to compare the cost difference between loans.
(See also – How to get a great mortgage)
Compare interest rates
You can easily compare interest rates on the internet. However, the interest rate is not the only option to consider when looking for a home loan. A home loan should be specific to your current needs and future goals.
Is it a flexible loan
No one can forecast what lies ahead and your personal and financial circumstances can change at any time. Choosing a loan with flexibility might come in handy in the future. A flexible loan can be adapted without the need for refinancing. Flexible loans may also have a redraw facility. Be aware that this type of loan may come with a higher rate of interest than the basic no frills home loan.
There are dozens of different types of home loan products available. Comparing them against each other will show you the best features and rates and will certainly benefit you. Homeloans are available to refinance an existing home loan or to purchase your first property.
With so many options available, it may be worth checking out BOQ’s Clear Path Home Loan which allows you to make additional repayments and has a redraw facility.
Shopping around will certainly give you the best home loan deal. Your lender should also provide you with a key facts sheet on home loans. This sheet will help you compare loans. Be sure to ask for a key facts sheet, if one is not offered to you.
Readers, do share some of your experience of taking your home loans.