In Australia more and more people are buying properties and taking out home loans. To facilitate this, lenders have designed different mortgage packages, which allow borrowers to choose the right product by keeping in mind their financial goals.
But which is the right mortgage product for you?
It depends on a number of factors, such as
- What your personal situation is
- Reason for borrowing
- The type of mortgage you are looking for
A person who is investing in a third property will have different motives to buy a house, compared to a person who is buying a property for the first time. This is why it’s so important to gather all the necessary information about a mortgage product before applying for it.
If you are planning to avail a mortgage facility, make sure you ask your lender the following questions in order to find the best deal. Otherwise speak to our team at Hunter Galloway to do the questioning for you!
1 .Do you offer any discounts or special offers for first time home buyers?
First home buyers have less fees and are given great deals when buying. Some lenders offer discounts or honeymoon interest rates to new borrowers too.
2. If you need to pay Lenders’ Mortgage Insurance, what will the premium amount be?
If you need to pay Lenders’ Mortgage Insurance it’s important that you understand that every bank charges a different premium based on how they assess your credit worthiness. Ask Hunter Galloway to do some research for you and choose a lender that is most suitable for you.
3. What are the fees on the mortgage package?
When you plan to apply for a home loan, ask your lender about the list of fees that are included in the package. Given below are some of the fees included in a mortgage package.
- Application fee
- Legal fee
- Valuation fee
- Early termination fee
It’s also important to find out if your bank charges an early termination fee on a mortgage, as this varies from one lender to another.
4. What is the rate lock policy for fixed rates?
If you want to choose a fixed rate loan, it is quite possible that you can secure today’s rate for your loan application. There are a few banks that charge fees to lock your rates therefore it is advisable to review the bank’s policy before making any assumptions.
5. What’s the duration of interest-only payment terms?
The standard term for an interest-only loan is usually 5 years. But it is possible to negotiate the term to up to 10 years. This, however, varies from bank to bank.
6. What is the repayment schedule?
Reviewing the repayment policy of a bank is so important because different banks offer different repayment schedules. For example, you can make weekly, fortnightly, or monthly repayments based on the policy of a lender. There are a few lenders that also ask for a direct debit from your savings account in order for you to meet your monthly repayments.
7. Is there a Redraw Facility?
Lenders can impose restrictions on redraw facilities, and also charges fees for it. So ensure that you are fully aware of fees associated with redraw facilities and ask if there’s any information about it that you need to know.
8. What other packages does a lender offer?
It is quite possible that you may package up your credit cards and transaction accounts with a mortgage and convert it in a professional package. This will allow you to save a substantial amount of money on application fees, ongoing account keeping fees, and credit card fee.
If you are planning to buy a house, speak to the team at Hunter Galloway, who will ask the hard questions for you and ensure you totally understand the lending process.
Call us now on 1300 088 065 or email Nathan at Nathan.Vecchio@HunterGalloway.com.au