Check That Loan Isn't Too Good to be True
Over the last few years borrowers have seen a range of new products appear in the mortgage industry – and some with rates that seem too good to be true.
So what can you do when you see such a ‘bargain’ rate?
Follow these tips when shopping for a home loan:
If an advertised interest rate is unusually low then you need to seek clarification on the interest rate policy, so you know what will happen with your interest rate over time. This will then provide you with the comfort and confidence to move forward with the product. Without this, you may find the rate increasing substantially outside of the RBA cycle.
Don’t be taken in by the annual percentage rate only – you must look at the comparison rate as well. You may find fees and charges that didn’t figure into the equation when you focused purely on the rate, making the effect of any savings on that low rate neglible even within the first year.
To identify that the interest rate you are looking at is competitive, go to consumer websites such as infochoice.com.au, cannex.com.au or ratecity.com.au where the most up-to-date rates are shown. Once you find a rate and a loan you think is appropriate for your circumstances, go to that specific mortgage provider’s website and see if the information is consistent.
Rate is important but do not neglect the other key aspects of a loan that can also save money and time. Review all the key features of the loan as well as the standard of service provided by the lender.
Sticking to these commonsense tips will help keep your finances in good shape for whatever may lay ahead on the interest rate front.
To find out more about your home loan options, call resi on 136 126.
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