If you’re in the market for a home loan, deciding on the right one can be tricky. There are, after all, so many variables – type of interest, interest rate, comparison rate, length of loan, type of lender among others. The myriad of financing options can be difficult to navigate, particularly if it’s your first mortgage. It’s important to take your time, look at multiple options and speak to potential lenders to make sure you are getting a deal that suits your particular needs. Below you will find a few tips to keep in mind when you begin shopping for your home loan.
Just because you have a long relationship with your financial institution, it doesn’t mean they will by default have the best loan product for you. You should look around and see what other lenders are offering and whether these will fit into your home buying plans. Most lenders will have loan calculators  on their websites that help you get a better picture of how the repayments will work over the life of the loan.
Don’t take candy from strangers
There is no shortage of lenders in the current home loan market. The internet is a smorgasbord of companies who want to give you money, and in many cases, it can be difficult to pinpoint who these companies actually are. While speaking to a number of different lenders regarding your home loan options  is a great idea, it’s also important to do a little bit of research on these companies. Be mindful of bold, unsubstantiated claims and barely visible asterisks – as mentioned, different loan types have different benefits for different people, there are no “blanket” solutions.
Do you know the difference between fixed rate  and variable interest ? What about loan to value ratios? What about redrawing, do you know what that is and why it could be beneficial? These are all questions you can ask your lender. That being said, doing some of your own investigation into the glossaries of mortgages and the long-term implications of interest types will serve you well in your search for the best home loan.
Consider fluctuations in the official cash rate
Interest rates are partly influenced by the Reserve Bank of Australia’s official cash rate. This rate fluctuates and for that reason so can interest rates at individual banks. If your home loan search is ongoing, it’s important to note that certain rates may only be available for limited amounts of time. This doesn’t mean you should jump onto the first good deal, but you should remember that the economy isn’t stationary. For this reason, it’s better to get your comparisons on the same day in order to get a more accurate picture of how they compare.
Gather up all the information you can
As a rule of thumb, the comparison rates advertised for each loan product give you the best idea of rates at a glance. However, most lenders will have facts sheets about each of their home loan products. These will outline, you guessed it, key facts regarding the loan like- repayment amounts, fees, charges, all those important details that need to be taken into account that you may not be able to decipher from the comparison rate alone. Fact sheets are typically formatted similarly and are subsequently easy to compare with one another, giving you a clearer picture of the total costs.
For more information about securing a home loan, or to speak to us about our award-winning home loans, contact Beyond Bank today.