What are the Best Steps to Narrow Down the Right Home Loan?
Finding the right home loan is essential. But deciding which loan is right for you can be complicated. So here are some steps to help you narrow down your choices to help you find the right loan for you.
Compare Interest Rates
Loans with lower interest rates can save you thousands of dollars over the life of your loan. Even a difference of .5% in interest rates between loans makes a big difference in how much you end up repaying. You also want to decide between a fixed interest rate, a variable rate, or a partially fixed rate. Each one has its pros and cons, so you need to choose which best fits your current needs. You can use an online interest loan comparison tool to compare the interest rates offered by different lenders.
Decide Which Features You Need
Many home loans offer beneficial features such as offset accounts, redraw, or lines of credit. However, these features add cost to your home loan. Therefore, deciding which features you need, or if you need any, impacts the loan you choose.
Figure Out What You Can Borrow
You can use an online borrowing capacity calculator to get an estimate of the maximum you can afford to repay. However, there are a few things to keep in mind.
- You should borrow less than this maximum in case interest rates rise or your financial situation changes in the future.
- You need to decide the length of your loan term. Longer loan terms result in lower monthly repayments, but more interest paid overall. Shorter loan terms result in higher monthly repayments, but less interest paid overall.
Work With a Mortgage Broker
Mortgage brokers can help you find the right home loan for you. They can compare interest rates and features from various lenders, help you determine how much you can realistically borrow, and get a clear picture of your financial situation to advise you. If you are looking for a mortgage broker, contact the team at Mortgage House