The average borrower tends to make home loan-related mistakes and here's how one can avoid them.
Life brings along with it several memorable moments (i.e. newborn child, wedding day) and each event requires research. Asking the right questions before these moments can help avoid silly mistakes.
With more than a hundred mortgage-related products on the open market, there's more than enough room for each type of borrower. As a result, it becomes essential to understand what the different types are and which one is best-suited to the situation at hand. Steve Keramidas can be a great help, but you need to help yourself as well.
Here are the most common home loan-related mistakes people make.
1) Never Reviewing the Agreement
Each home loan agreement is different and it's important to go through each detail as often as possible. Sticking to one lender is not mandatory and shouldn't be the approach one takes. Instead, it's smarter to compare at least 5-6 different options to see which one works best. This ensures the final decision is in line with expectations.
This is something many individuals ignore and as a result, end up with a bad home loan under their name. Steve Keramidas at Mortgage Compare Plus can showcase multiple products at once allowing clients to choose what works best for their needs.
An example would be refinancing and being able to take a look at the various rates before signing up. Each lender is going to have its own rate making it important to go through the fine print. Make sure you have a clear comprehension before you sign anything.
2) Only Focusing on the Interest Rate
The interest rates seem to be going lower and lower with each passing day. This can be an intriguing proposition for home loan applicants. However, experts believe interest rates are just a way to get people through the door before tricking them.
There is more to a home loan than simple interest rates and that's something people need to focus on. Each situation is unique and those circumstances determine whether or not the home loan is a good fit. Otherwise, some agreements have lower interest rates but are packed with hidden fees, odd clauses, and other below-par features.
3) Avoiding Research
Being prepared is essential and many applicants ignore this part of the process.
Many applicants don't even come in with the right documentation when it's time to sign up. This can slow things down and lead to an elongated home loan application process when it doesn't have to be this way at all.
Taking the time to analyse different options, prepare all relevant documentation, and finding the right fit is essential. It's all about knowing what's coming up and what decision will work best.
Remember to also consider non-financial aspects to help you avoid unnecessary stress and worry.
It isn’t always about the money, and a lot of people experience a lot of stress because they only considered what was cheapest. The right home loan really comes down to a variety of factors, including your household income, your saving skills, whether or not you have kids, how old you are and the degree of flexibility that you require in your life. Keep all of these in mind when choosing a home loan.
4) Ignoring the Structure
Each agreement comes with its own stipulations and these can vary with features such as offset accounts, redraw facilities, lines of credit, and even new credit cards.
While each agreement is going to be different, it's important to be aware of these differences in advance. Always seek a home loan product that's in line with your needs and suits your interests. For more information, it's always best to speak to a qualified professional to learn more about what works best in your particular scenario.
Sometimes, the wrong home loan structure becomes a major issue when it's time to deal with tax deductions.
5) Sticking to a Fixed Home Loan
The average borrower sticks to a fixed-rate interest rate home loan because it's simpler. However, this decision can lead to thousands of dollars going down the drain for nothing. A smart person understands the differences and takes the opportunity to do their research.
While a fixed-rate interest rate home loan has its advantages (i.e. stability), it also comes with an elongated term. This is why the concept of signing across 4-5 years can be troublesome at the best of times.
A variable loan has its drawbacks as well but will give you greater flexibility in paying off your loan.
6) No Pre-Approval
Pre-approvals are a great way to simplify the process as much as possible.
Using different online tools to learn about a lender's rate isn't always helpful. Those tools aren't accurate and shouldn't be enough to assume it's okay to buy a new property. Gain a pre-approval before making an offer or signing a contract of sale.
So, are you ready to choose a home loan mistake-free?
Depending on your deposit, personal situation, finances and goals for your mortgaged property, there will be a home loan right for you. Once you find a home loan that you think suits you, you can use tools such as online mortgage calculators to compare your expected repayments. A home loan is a big decision, but consulting with Steve Keramidas a qualified mortgage broker from Mortgage Compare Plus, it can be a hassle free process and you can get straight into enjoying your new home.
Want to get started looking for the right home loan for you? Talk to the Steve from Mortgage Compare Plus today.
Disclaimer: This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.