A home loan is a major financial commitment and often people do not spend much time looking at options instead leaving it to the people at the bank to set up the loans.
At Mortgage Managers we believe a home loan is too important and you should make an effort to get the best from your home loan – most people are pleasantly surprised with the financial impact of a few small changes.
There are three key things that a mortgage adviser will address;
- The structure of your loans
- The interest rates
- The repayments
In most cases you can keep your home loan with your existing bank, unless there is a specific feature that is not offered by the bank and/or another bank is offering a significantly better deal for you. A mortgage adviser can look at the options for you and suggest any changes for you to consider before you commit to anything.
Your Loan Structure
The structure of any home loan should complement the way you live and manage your finances.
There are various types of loans offered by the banks and when a mortgage adviser understands your situation they can recommend a loan structure using a mix of the loan products to give you the opportunity to have the lowest interest rates, security of fixed rates and flexibility to pay more and save.
Revolving credit facilities are often used within a loan structure but they are typically operated within low limits and you need to be shown by our advisers how to use these types of loans correctly. Some banks also offer offset loans which can be a useful alternative.
Fixed loans offer more security and make it easier to budget when you know exactly what your loan repayments will be for a set period of time – the fixed term.
The Interest Rates
Interest rates are important and we all want the lowest home loan interest rates, but we also need to ensure that you are getting competitive interest rates all of the time. Banks typically will not offer you the best rates they can and this is where a mortgage adviser can help and negotiate with your bank on your behalf.
You also want to ensure that any loans you have are on the lowest possible interest rate. That means avoiding paying any interest on credit card debt, store cards, hire purchases or personal loans. Banks tend to charge higher interest rates for business related loans and it is recommended that you review these with a mortgage adviser too.
Your Repayments
Most loans are set up to be paid off over 25-years or 30-year and yet none of us wants to take that long to pay off the mortgage.
Getting the right loan structure helps you to pay your loans off faster, but the best way is to increase your repayments and make extra lump-sum repayments when possible. Ask your adviser to show you what difference a little extra would make – you might be pleasantly surprised.
When we talk about debt reduction our mortgage advisers are careful not to over-promise but if you stick with a plan then you will get your mortgage paid off a lot quicker and that will save you a significant amount.
A Real Example Shows What Can Be Done
CLICK HERE to read about a true example of how we helped a couple pay their home loan off 11-years earlier without paying an extra dollar.
Contact a mortgage adviser who can help you get the best from your home loan.
