Why it’s important to read the fine print on your mortgage documents

Taking on a mortgage is a big step, so it stands to reason that you want to make sure all your paperwork is perfectly in order before signing on the dotted line. However, despite a home loan being a massive commitment, many property seekers – particularly first home buyers – unintentionally skip over the finer details of their mortgage contracts.

We explain why this isn’t a good idea and what you should look out for.

Don’t skip over the finer details

Details regarding fees and specific features of your home loan can seem overwhelming, but it’s vital that you understand exactly what you’re signing up for. After all, most Aussies have a mortgage for decades. You don’t want to find yourself locked into terms that aren’t flexible enough for changing circumstances. A home loan that doesn’t allow you to renovate your home (if this is something you intend to do) or repayments that are too high to maintain will place you under unnecessary financial stress.

What should you look for?

Many people will only look at their interest rate. If it’s good, they’re happy, and don’t dig any deeper. It’s easy for a bank or lender to convince you that you are getting a great deal, and hide the more detailed aspects of the contract. Unless you read your documents through carefully, you may not be aware that you’re not getting as good a deal as you signed up for.

In particular, you should look at the mortgage repayments and make sure that you can afford them. There is nothing worse than putting yourself under unnecessary financial pressure for years to come.

Check the terms, and any additional features that are included. If you need an offset account, make sure that this is stated in your documents.

Need help?

Mortgage contracts – just like any paperwork – can be dense and difficult to navigate. This is why it’s a good idea to enlist the help of a qualified mortgage broker to go through the documents with you. At Mortgage Choice, we forge strong relationships with our clients, and we know your situation inside and out. We can help you decipher the tricky terminology in your contracts and ensure that you are getting a home loan that matches your requirements.