Post by Jeremy Cabral, from CreditCardFinder.com.au
There’s a lot that you’ll need to know as a borrower, especially if this is your first time buying a new home.
You need to choose the right lender and get the right home loan, as this can save you thousands of dollars over the life of your mortgage.
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To help you on your quest to home ownership, here are a few questions you must ask your lenders:
[signoff icon=”icon-home”]Which Loan Best Suits Me and My Lifestyle?
You don’t want to get a loan that you’re not going to be able to pay because it doesn’t suit you or your needs at all. Sit down with your lender and explain to them what you have going on and exactly what you’re looking for. This will help you and help them to pick the loan that is best for you.[/signoff]
[signoff icon=”icon-home”]What Fees Do I Have To Pay?
First and foremost, you need to know if your loan has monthly account keeping fees. With home loans, you’ll find that fees add up very quickly. You should definitely investigate what you have to pay up-front as well as any ongoing charges that you might incur. Make sure to take into account the entire term of your loan, from application costs and insurance to your monthly payments, redraw and any early-exit fees.[/signoff]
[signoff icon=”icon-home”]Fixed or Variable Rate Loans: Which Is Best For Me?
When you sit down with your lender to talk about your personal finances, this is the time to talk about fixed or variable home loans. Everyone has a different financial situation, so you need to be sure you choose the right rate for you, specifically. Also keep in mind that just because rates are currently in decline doesn’t mean they’re going to stay that way forever. They could just as easily jump again.[/signoff]
[signoff icon=”icon-home”]How Can I Reduce My Interest Costs?
Interest is calculate every day and charged monthly in arrears for every home loan. If you can find ways to reduce your interest you will save yourself money. Ask the lender if there are any tips or advice they can give you on ways you can lower the interest costs on the loan you’re getting. Some good questions to ask include:
Can you make extra payments?
Can you have your salary paid into your mortgage account?
Can you use a mortgage offset account?[/signoff]
[signoff icon=”icon-home”]What Will the Repayments Be If Interest Rates Go Up?
Since we’re nearing the bottom of the market, soon there will be nowhere for home loan interest rates to go but up – and they will. You need to think about the future and what can happen when the rates do go up. Do your research and be sure you have a plan of action.
Have your lender calculate the payments at a higher rate, say around 4 to 5 percent higher, and consider whether or not you could still meet your obligations.[/signoff]
[signoff icon=”icon-home”]Do You Offer Any Professional or Special Product Packages?
Often, lenders offer special rates to preferred customers for any number of reasons. Maybe you work in a specific industry or with a certain organisation. Perhaps you have multiple accounts with the same lender. Maybe you just earn a very high income and they think they’ll get more business from you if they offer your a specific rate. These packages may also offer lower account fees or discounts on investments or insurance products.[/signoff]
[signoff icon=”icon-home”]Can I Make Repayments Any Way Other Than Monthly?
You can considerably cut your mortgage term and the amount of money you actually spend simply by setting your mortgage payments to occur fortnightly or even weekly. Make sure that you have this option open to you in case you’d like to use it.[/signoff]