Mortgage Mistakes to Avoid

Tuesday, July 18th, 2017

Don’t make a bad decision on your next home loan – you can save money by being smart about choosing the best possible mortgage to suit you. 

And if you already have a mortgage? Don’t worry. With the right information at your fingertips, it’s not too late to repair past mistakes – and learn from them.

Fact: Your mortgage should be reviewed every two years.

If you can negotiate a better deal, the result is real savings in your bank account – and that means more access to money to deal with other aspects of your personal and professional life.

For most people, a mortgage is the most significant financial commitment you’ll ever make. Getting it right matters – and it’s not hard.

 

How To Reduce Your Mortgage

To have a real impact on reducing your mortgage repayments, securing a low interest rate is not the only answer.

The reality is, the longer it takes you to pay out your home loan, the more money lending institutions make. Reducing the life of your loan is a great way to save thousands and for others ways to help you pay your mortgage faster, try these four tips:

 

1. Loyalty May Be Over-rated

Chances are that there is a better deal waiting for you – and with some professional help to find it, you can make a huge difference to the life and amount of your mortgage.

Make sure you find out any associated fees and charges before you switch – sometimes, looking for a better deal could be a false economy if the fees and charges a different lender offers chew up your potential savings.

 

2. Long loan terms are not your friend

Did you know that reducing loan term of your mortgage – even by just a few years – has the potential to save you tens of thousands of dollars?

Going for the longest loan period possible is not always the best strategy. It’s a personal one though, and, depending on your own personal circumstances, different options may suit different people.

Paying a little more onto your mortgage each month may make things a little tighter in the short-term but could see you thousands of dollars better off over time. It’s all about finding the right balance for you and your cash flow.

There are many options to explore and it’s important to be aware that the lender who tries to talk you into a 25-year mortgage might just be thinking of themselves and benefiting from an ongoing interest income or trail commission.

For some people, a mortgage offset account can be a wonderful thing – but it’s not automatically best for everyone.

By asking the questions that are important to you and your financial goals, you can get the answers that help you find the best loan to suit your situation.

 

3. Choosing a mortgage broker is a business decision

Not all mortgage brokers are identical.

When you’re in the market for a home loan, asking for referrals from friends and family may be a handy start to help you weed out some finance brokers but, when your future financial security is on the line, make sure you do your own research to find a professional broker that takes the time to understand your personal financial circumstances – and explains how they can help you best.

Choosing a broker simply because they seem to offer a ‘great rate’ may lead to other issues down the track.

 

4. Website reviews can lie

The online environment can put lots of great information at your fingertips but relying solely on the reviews and testimonials posted on company websites may not be the most trusted way to select your mortgage lender.

Be aware that lenders often pay fees to be included on ratings sites and, the bigger the institution, the more money they have to spend on advertising their business. That glowing review doesn’t mean it’s the best option for you – and, in fact, it might be the first step down a very expensive path.

Do your own research and ask lots of questions. Choosing a lender is an important business decision and one you should take very seriously.

 

If you have any questions about your finances, either personal or business, please do not hesitate to contact Loans Actually on (03) 8805-1850 or email glenn@loansactually.com.au

 

 


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