It is an exciting time, purchasing a new home. There is so much to do but first things first, how do you find the best home loan? The easiest solution is to work with a mortgage broker who’ll do all the legwork for you. Plus, one of the biggest benefits of using a broker is their ability to assess your needs, narrow down the options and then advise you on the best home loans for you.
Don’t let yourself become overwhelmed by all the numbers and fine print, simply focus on the following five factors:
1. Do I prefer a big bank or small lender? Voice your preferences for a small lender or big bank with your mortgage broker at the very start. This will help you to refine your search and may help to speed up the process of researching and comparing the best home loans Aussie Broker.
2. Which style of loan is right for me? There are a multitude of loan styles and a reliable mortgage broker will be able to guide you through them and explain the pros and cons of each.
In general, home loans fit into one of the following categories:
i) The standard variable loan: when you take out a standard variable rate home loan your interest will be charged at a variable rate as determined by your bank or lending company. This is an appealing option when interest rates are high and predicted to fall.
ii) A fixed-rate loan: this home loan model allows you to lock in to an agreed interest rate for a fixed term or for the life of the loan. This is good option when interest rates are low and are predicted to rise.
Your mortgage broker will guide you in deciding on the best option for you. This may be a combination of the above two types of loans depending on the economic climate at the time when you are borrowing.
3. Can I afford to do this? Once you have determined which style of home loan suits you best it’s important to look carefully at the loan and ask yourself the following questions – discuss these with your mortgage broker:
i) Have I saved enough of a deposit to establish the loan and cover all of the upfront costs and fees?
ii) What are the exact repayments I will be making?
iii) Is my current financial situation likely to change? Will this affect my ability to pay off the loan?
iv) Do I have adequate income protection to cover my mortgage repayments in the unlikely event that I am affected by illness or injury?
4. Does the loan provide me with flexibility? Before signing on the dotted line investigate how flexible your loan will be. Ideally, you should be able to make extra repayments and pay off the loan faster. Alternatively, you may also like to have the option to redraw on the loan to pay for things like renovations or to access money in an emergency.
5. Am I fully informed? Availing of a loan is a big decision and it’s a huge responsibility. Ensure that all fees are fully disclosed before signing anything. Whilst we all like to be optimistic, life does throw us curve balls from time to time so also make sure you know what your options are should you be unable to make payments or should you wish to sell the property and terminate the loan.