May 20, 2015
With Australia’s lenders slashing the interest on their suite of home loan products, now really is the perfect time for those with a mortgage to review their current situation.
If you have been in the same mortgage for a few years and think you could be getting a better deal, you’re probably right.
Thankfully, there are 10 easy steps all homeowners can follow to help them secure the right mortgage for their needs – both now and into the future.
Step 1: Research
With so many different products on the market, it is important to do your due diligence and research what options are available to you before diving in with both feet.
Step 2: Get to know your mortgage
Recent research showed more than half of Australia’s mortgage holders do not know their mortgage interest rate. It is one of the biggest financial commitments a person can make, so it is good to know all about it. Furthermore, the better you know your mortgage, the better placed you will be to determine which features are important to you and those that you currently have but could live without.
Step 3: Identify what features you want
Once you have understood exactly what features your mortgage has, you can determine exactly what you don’t need and what you do. Does your loan have a range of features you don’t use? You might be able to switch to a ‘cheaper’ loan with fewer options. Or, you may benefit from a loan with more features, such as a redraw facility.
Step 4: Compare lender rates
Understand what interest rates are being offered by Australia’s lenders at the moment and then compare and contrast them against what else is on the market. While interest rates aren’t everything, your perfect lender should be very competitive on rates.
Step 5: Investigate the fees and charges
Many lenders will charge various fees, so make sure the lender you are contemplating partnering with offers competitive fees and charges. As your local broker, I can compare how your lender stacks-up in terms of the fees and charges on the loan (eg. for loan features, transactions, late penalties, early repayments, top ups etc.).
Step 6: Contemplate your needs
If weekend branch access and phone support are high on your priority list, it is important to partner with a lender that offers such facilities.
Step 7: Consider your future plans
Before you decide to partner with one lender, investigate whether or not they offer a wide range of loan options to suit you, should your personal or financial situation change (eg. if you need a loan top up, access to funds for renovations or you wish to refinance an existing loan).
Step 8: Engage a professional
Once you have done your research and determined whether or not there is a better product out there for your needs, it pays to engage a professional – someone who can organise the best loan for you and do all of the paperwork on your behalf. I can help you compare hundreds of home loan products from different lenders to see if there is a better one out there for your needs.
Step 9: Understand the refinancing costs
It is important to note that there are often fees associated with refinancing into another home loan. I can help you identify whether or not the cost of switching to a different mortgage outweighs the benefits of doing so.
Step 10: Review the contract
Once you have decided to refinance, it is important to go through your new home loan contract with a fine tooth comb. Remember: the devil is in the detail, so it pays to make sure you know what you are getting yourself in for. Are you happy with the mortgage features and the fees associated with this product?
For further information, and to put yourself in the best position with valuable information and guidance, contact a trusted consultant from Mortgage Choice on 07 3286 7711.