April 01, 2013
You have found the property of your dreams, and it is now time to find the finance to fund your purchase. When looking for a property loan to meet your financial needs, it’s important to consider a range of aspects. Mortgage Choice in Cardiff & Charlestown can help guide you.
While it is important to take the interest rate into account, borrowers are also encouraged to think about the other aspects of acquiring a home loan that can impact the overall cost and length of time it takes to repay the debt, such as the loan’s flexibility, features and fees.
When choosing a home loan, it is worth undergoing careful research to help make the right move, given that for many people this is the biggest financial commitment they will make during their lifetime. Websites, industry publications, the property pages of local and metropolitan newspapers and magazines are a good place to start the research process.
Once you feel you have done enough of your own initial research into the property purchase process, the next step would be to visit your local mortgage broker to get more detailed answers to questions that are directly related to your own personal financial situation.
Mortgage brokers understand that purchasing property is a huge commitment, and not one that people generally make lightly. So take advantage of your mortgage broker’s knowledge and services, by asking lots of questions – the more questions you ask, the better informed you will be about your pending purchase and what to expect during the loan process.
To help you get started, I have put together a list of five key questions that borrowers should ask their mortgage broker when applying for a home loan.
- How long will it take for my loan to be approved? Applying for pre-approval of the loan amount is a good way to speed matters up for when a property purchase comes to fruition.
- Can I choose when I want to make my repayments? Opting to halve your monthly repayment and repay it fortnightly can make a big difference. This is because there are 26 fortnights in the year, meaning you can make the equivalent of making 13 monthly repayments.
- Am I able to make additional repayments at no extra costs? It is a good idea to ask if your lender and loan type allow you to make extra repayments. If so, ask if there is a limit to the amount of extra repayments you can make without charge, and how such repayments can be made – via a branch, internet banking, over the phone, etc.
- Does my loan have an offset account and how can I use it to the best of my ability? Loans with off-set accounts enable borrowers to link a savings account with their home loan account and ‘off-set’ that amount to reduce the interest accumulated on their loan. This is a great way for borrowers to stay in the green with their home loan repayments.
- Can I switch from a variable to a fixed interest rate and vice versa? While borrowers have the option of switching loan types, it is important to know the costs involved and the pros versus cons of switching. Take your time when deciding on an interest rate type in the beginning, to avoid the extra costs that can arise when switching