Home loans are vast and varied and are presented in many forms; the rates are usually offered as fixed, variable and introductory. Then you have your repayment methods of principal and interest (where you pay off your interest as well as your loan), or just interest only (where you pay the interest on your loan only). And this is only the beginning of the options available – there are also split loans, and loans with advanced features like re-draw facilities to consider. Depending on which lender you select and the type of loan you go for, the fees and special offers are often quite different among the home loan lenders.
When you don’t know much about them, choosing a home loan can be a daunting process and often has people pulling their hair out faster than Advanced Hair can regrow it. As the lending industry becomes more competitive, so does the complexity of finding the most suitable home loan for your needs.
When you’re looking for the home loan that best suits your needs, it pays to have some basic knowledge to keep up with the technicalities. So, to give yourself a good opportunity to do just that, Queensland Custom Homes have put together a few tips to help you overcome the fear of nailing down your first home loan.
What to consider when choosing a home loan?
1. Consider all offerings of the loan
Take an eagle eye view over the entire home loan and not just concentrate on your favourite aspect. Consider all things on offer, and remember that a loan with a low interest rate will probably have their bases covered with higher fees to compensate. The more features of a loan, usually the higher the fees too.
2. Consider your individual circumstances
The structure of your loan is very important and should be considered in-depth. What are your individual finance needs? Are you going to look to refinance down the track; will you be purchasing an investment property; are you packing up ship and opening your own business venture? Make sure your loan covers your needs and individual requirements.
What features should you be aware of for your home loan?
Some of the basic features that might be worthy of keeping an eye out for on your mortgage include:
1. Additional Re-payments
If you find you’re doing it easy on your current budget and want to cut down some more of the interest you’re paying on your loan, can you make extra re-payments without being penalised? This is a great way of getting ahead of your loan and can be done as simple as setting up a direct deposit from your bank account, or by whatever other means you prefer.
2. Loan Flexibility
It could be worth checking out the ability to fix or split your loan in case this is needed down the track. At what cost can you so this for? Some lenders will not charge; however, some may have a service fee involved.
3. Online Access
You might also want to make sure you can tap into your home loan account at any time to have a look at your progress, check the current fees and interest rates, etc. This is a great way to make sure you are staying on top of everything.
When you are not sure about any of the features of a home loan or a little confused about the additional benefits of your mortgage, the best advice we can give you is to ask a home loan professional. Seek details about the total fees associated with the mortgage, including those the lender could expect you to pay, not just what is payable straight up.
If you are thinking of hiring the services of a home loan broker, make sure they are registered with the Australian Securities & Investments Commission (ASIC) first. Queensland Custom Homes also have direct access to a home loan professional who might be able to get you ready for your new dream home sooner. Click here to contact us for further details.
With national interest rates still looking inviting, now is a good time to gear up and get home loan savvy.