Fight Back: Health Check Your Home Loan

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8th November 2010, 10:02am - Views: 761





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Fight back: health check your home loan


It’s time to take control of your home loan situation. Don’t sit back and hope for the best while interest

rates rise around you.


A

borrower with a 30-year $300,000 home loan who switches from a product with an interest rate of

7.8% to another that is the same apart from a 7% rate will save almost $164 per month and just under

$59,000 over the loan term.


Australia’s largest independently-owned mortgage broker, Mortgage Choice is seeing a big increase in

queries from mortgage holders who know now is an ideal time for a free home loan health check.


Company spokesperson Kristy Sheppard said, “Everyone with a basic or standard variable home loan,

or who is nearing the end of a fixed rate term, should have an action plan for dealing with rising

repayments.”


“If your strategy includes considering switching to a different loan, you’ll need to set aside time to

research today’s options. Remember,

when it comes to home loan choice it’s not all about the big

banks. This country has a wide range of large, medium and small lenders offering hundreds of different

products.”


Mortgage Choice suggests these steps for researching refinancing:

1.

Ask your lender about your exit fees. Note this when weighing up the upfront costs of moving

to, and setting up, another loan versus the overall savings. It may be cheaper than you realise

or enough to keep you from moving. Either way, it’s better to know than wonder.

2.

Negotiate with your lender for a better deal. Your lender may want your business enough to

sweeten their offering.

3.

Understand what you really need in a home loan. Interest rate is important but it’s not

everything. There are many loan features available and some have ongoing fees attached.

Perhaps you can save money by dropping features you don’t use. 

4.

Research the market to see if there’s a better home loan that’s tailored to your needs.

Trawl the internet, call a wide range of lenders or have a mortgage broker research for you.

5.

Consider the pros and cons. Add up your current loan’s exit fees and the new loan’s set up

fees plus any other initial and ongoing costs. Compare that with the savings you will make

during the time you will stick with this new loan. 







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