Choosing a Home Loan – 6 Features To Look For To Guarantee The Best Deal.
The right home loan is the key to your new home – for living or investment – and a great way to access extra funds.
Home loans are so crucial to buying success, and in part 1 of this blog we addressed home loan amounts, purposes and types.
Today we’re going to close out the conversation, giving you expert advice on deposits, as well as loan features and fees, and things to consider.
Saving for a Home Loan Deposit
Different loans require you to provide a different deposit amount, but saving 20 percent of your chosen home’s value will put you in a strong position. Not all loans require 20 percent upfront, but a bigger deposit will save you money in many ways. Here’s a few advantages of a bigger deposit:
They reduce the amount you need to borrow
They make your loan application stronger
They prevent you from having to pay Lenders Mortgage Insurance (LM), an insurance cost when you want to borrow in excess of 80 percent
6 Features to Look For
What should you look for when casting your eyes over a home loan? Loans are about more than just low prices. Here are a few features to look for:
Split option – having a part fixed, part variable loan
Interest only – an option to consider for investment properties
Lump sum repayments – the ability to make large payments as necessary
Additional repayments – the ability to make extra payments
Mortgage portability – the ability to transfer your loan to another property
Redraw facility – the ability to access excess money you have added to your mortgage
Choosing A Home Loan – 11 Critical Fees to Look For
Before accepting a home loan based on its range of extra features, stop to consider the possibility of hidden costs. These nasty surprises can derail your budget – the basis on which you selected your loans. Some fees your loan may include are:
Additional repayment fees
Final Thoughts Before Your Loan
We understand that committing to a loan is just as a big as buying a house. While we think we’ve covered a lot in these two blogs, there are still a few final things to think about. Here are some final thoughts:
Plan for flexibility – while your repayments should equal around 30 percent of your income, an extra few percent will protect against unexpected personal or financial changes, as well as market fluctuations
Documentation – if you don’t need a low doc loan, organising your pay slips, bank statements, credit history and more can fast track your approval
Fine Print – Don’t just read every line – including the product disclosure statement – ensure that you understand the implications and talk to an independent expert if you’re ever unsure