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Choosing the right mortgage for your lifestyle has only become more and more complex throughout the years; as mortgage terms themselves get more convoluted by the quarter, disrupted by an economy which just won’t settle, and the reputations of the very banks who issue them has been called into question –it can be increasingly difficult to know who to trust.
First Time Home Buyers
And as if it wasn’t complicated enough, first time home buyers tend to have little or no experience with any mortgage from any era; entering the market –today’s market— for the first time is a daunting task.
The purpose of this article is to help the average Australian citizen looking for a home loan to find the right solution for their budget, lifestyle, and wish list.
What to Consider When Finding a Home Loan
- Structure
Before looking at rates or lenders, it is important to evaluate the very structure of your home loan. The fees, payment schedule, and extras that come with it can all impact your bottom line, and your interest rate. Do not look into one factor or another in isolation, instead consider the bigger picture.
- Deposit
Typical lenders will lend no more than 80% of the LVR (loan to value ratio) unless the home buyer chooses to pay additional for the lender’s mortgage insurance.
Some lenders provide up to the full LVR without the LMI, however that translates into higher interest rates and establishment fees paid up front.
If you are able to pay a higher deposit in the beginning, you are more likely to get cut a better deal with insurance, interest, and upfront fees.
- Features
Home loans in Sydney come with many additional features you can opt to undertake, such as the ability to make non-scheduled additional repayments through online banking or even at your local ATM, as well as the ability to re-fix your interest rate at a later time should the market rates change in your favour after signing on the dotted line.
- Transparency
In addition to looking for a lender who gets rave reviews from your friends and colleagues, realise that not everyone is experienced with qualifying their referrals. A lot of the leg work in finding the right lender or mortgage broker central coast will come through how transparent they are when providing information both online, and in person.
And transparency and the ability to ask questions should not end after you’ve signed up for your mortgage; ask your mortgage professional how they handle post-settlement issues as well. If they have a dedicated customer support team –that’s a plus. You’re paying their salaries, after all.
- Comparison Rates
Comparison rates are an incredibly useful tool when it comes to seeking out the right home loan. A comparison rate will assist a consumer in finding the true cost of a home loan, and is the sum of all associated fees, interest rate, and charges drilled down to a single percentage number.
This also reveals one very important fact; never shop on one figure alone –an interest rate could be offset with larger fees, and a no-fee home loan could be fraught with a higher interest rate. A comparison fee cuts through all of that for you to find the true cost of your home loan.
In Conclusion
If you’re searching for a home loan in Australia and only took away one thing from this article, we suggest you go with number five. And if you have anything to add to this information, we’re sure our readers would love to hear from you. Leave your thoughts in the comments!