There are hundreds of lenders and thousands of home loan products in the mortgage market at any given time. So, finding a home loan that suits your needs and saves you over paying in interest and fees can be a difficult task. This is why it is vital for you to consider some home loan factors before you take out a home loan. Otherwise you may find yourself paying far more than you need to.
The Most Important Factors to Consider Before Taking Out a Home Loan
Before you take out a home loan look at what home loan products are on offer and compare these to each other. Review each lender’s products in relation to your wants and needs. When reviewing, consider the following aspects:
1. Fees and charges – When looking at home loans make sure that you work out exactly what each loan is costing you. Focus on ongoing fees and charges and those that are one off, such as application and establishments fees. Consider how much features, such as a redraw and offset account will cost you long-term. These features usually incur a higher interest rate, so calculate just how much extra you’re paying for the privilege of having such a feature, and determine if you’ll use the feature effectively.
2. Ask about introductory or other offers – A lender will typically offer you their advertised rate, but this often isn’t their best rate. So, ask the lender if they have anything better to offer. Find out about introductory offers or what their basic home loan rate is excluding features. If you have a large deposit, then you may be able to use this to negotiate a better deal.
3. Keep an eye on interest rates – Know what the money market is doing and review lender comparison rates for a week or two before taking out a home loan. Pay attention to what the Reserve Bank of Australia (RBA) is doing with the official cash rate. This will give you an indication of when home loans are most affordable.
4. Using your good credit history – If you have an outstanding credit history then this may give you more bartering power with a lender. The higher your credit rating, the lower your risk. So use a good credit history to your advantage
5. Talk to a mortgage broker – Mortgage brokers can take the hard work and frustration out of finding the right home loan for you. They can compare a vast number of lenders and their products, and offer you valuable advice.
Are you in search of the RIGHT home loan for you? Then contact eChoice today. We can take the guesswork and frustration out of finding the right home loan.
Written by eChoice