Get a Better Home Loan Deal
Entering a home loan contract is one of the biggest financial commitments most people will ever make so it’s important to take the time to get it right. But where should you start? Here are some tips for finding a better home loan deal:
- The best place to start is to do your own research. Use the Internet to gather basic home loan information and to compare different types of loans. The main loans to look into include standard variable rate loans, fixed interest rate loans and parent equity loans. To help you decide, consider which option you think best suits your circumstances with a list of pros and cons for each loan type.
- Speak to your financial institution or a broker. This is an opportunity to ask questions and clear up any grey areas. Be aware that brokers are paid by the lenders they recommend. To ensure the recommended deal is best for you, research a range of lenders yourself and speak to a few different institutions.
- Compare the key loan terms and conditions. It can be difficult to know what to look for in a good loan and what terms and conditions are most important to compare. Most people compare the advertised interest rates, but you should also consider other fees, the loan’s flexibility, exit arrangements, repayment terms and redraw conditions. The Federal Government now requires lenders to provide Home Loan Key Fact Sheets on their products so that borrowers can make direct comparisons between loans. All facts must be presented in the same way, so you can clearly see the product differences between institutions.
- Think long term and consider your individual requirements. Consider the broader relationship with your lender. It is likely that you will be dealing with this financial institution for many years, so it’s worth considering things like the quality of service, branch locations, and wider product offering. Will these features suit you now and in the future?
- Don’t be afraid to negotiate a package deal. Most lenders are happy to offer a better deal if you transfer your entire banking relationship to one lender. Don’t be afraid to ask for a discount on interest rates, loan service fees or monthly account keeping fees if you bundle all your banking needs and deal with one institution.
^Wayne- Chief Financial Officer