No-one wants to pay more than they have to on their home loan. But, it’s also important to remember that the cheapest option may not always be the best option, or the best suited to you and your circumstances.
So when you go in search for a home loan it pays to keep an open mind and to explore all choices, this includes talking to a mortgage broker, as they can help you make sense of confusing home loan information and help you to understand how this information relates to you and your circumstances.
Let’s look at some of the most common home loan information you’ll encounter in greater detail.
By law, lenders in Australia must put a comparison rate alongside an advertised rate. The comparison rate gives you a clearer indication of how much a loan will cost you when fees and charges are included.
However, it’s important to remember that a comparison rate is based on a fixed loan amount and loan term, and it doesn’t include stamp duty and other government charges. These are aspects that you’ll need to calculate yourself to get a true indication of costs. This is when a mortgage broker comes in handy. They’ll not only take the time to explain how everything works, but they also help you understand where you can make a saving.
Home Loan Features
You’ll need to consider what home loan features you’ll need before you take out a home loan. The most common features used are the redraw facility and the offset account. These allow you to use your money to effectively reduce your home loan principal and the interest that you’ll pay. But, these features can incur a higher interest rate.
Home Loan Terms
Typically home loan terms vary from 20 to 30-years. The general rule of thumb with a home loan term is the shorter the term, the higher the repayment rate will be.
Therefore, if you’re seeking to keep your monthly repayments down, then you should opt for a longer home loan term. Of course, it’s also important to remember that the longer the term, the more interest you will pay.
Interest Rate Types
The most common types of interest are fixed, variable and split. Once you’ve worked out exactly what you want then you can compare home loans and lending packages. But make sure you look at similar home loan products.
Now if you’re confused or unsure of how to carry out comparisons then consult a mortgage broker. A broker takes the guesswork out of finding the right home loan for you and they’ll help you make sense of tricky lingo and other aspects you might not understand.
Are you seeking to find the best rate home loan, but you’re confused? Then contact eChoice and find the right home loan for YOU.
Written by eChoice