How to Choose the Right Loan for Your Home
Home loans and mortgages are applied for in their thousands every year in Australia. With banks being willing to lend their cash to reliable borrowers, the number of successful applications is on the incline, but with so many different types of home loan to choose from – half the battle relates to actually deciding on the right one for your particular needs and finding the best home loan deals.
Before deciding, the first thing to consider is that different options will boast their own benefits and disadvantages. Some are only available to particular borrowers, while others may be a little more demanding. As a result, it can be a good idea to follow the steps listed below to ensure that whichever type you opt for – it’s the right one for your needs.
Most banks will require a deposit to be provided by their borrowers and in some cases this amount can be as low as 5% of the total cost of the home. That being said, there’s no rule against paying off more upfront than you need to – as this can reduce the total cost of your loan (and save you money in the process). By planning ahead, you could set aside cash each month to go toward your deposit.
Know what you are getting in to
A mortgage isn’t like other types of loans available to individuals and business. In the majority of instances a borrower will be repaying what they receive from their bank with interest for at least 15 years. This is almost double the amount of time of regular financing options and personal loans. As a result it can pay to fully comprehend what you are getting in to before signing on the dotted line. A bank should be as transparent as possible when offering their lending services and you should plan to take full advantage of this.
Consider hiring a mortgage broker
Mortgage brokers are becoming more and more popular as the years go by and much of this increase in demand is to do with the fact that these financial specialists typically compare interest rates and negotiate with banks to find the cheapest types of home loans. By hiring one you could enjoy a discounted rate of interest, fairer repayment terms and much more in between.
Don’t be taken in by introductory offers
Every year, hundreds of borrowers are taken in by introductory offers that appear to be fair and flexible, but end up costing much more money in the long run. Some banks are notorious for employing these types of tricks and so making sure that you agree to a fixed rate, or a fair variable interest rate can be very beneficial for your finances as the years go by.