Is it time to check and change your home loan?
If you’ve had the same loan for a number of years, it might be time to look and see is it still the best loan to suit your needs, which have probably changed over this time.
The best way is to get a mortgage broker to conduct a home loan check for you. Let’s look at the benefits of this in more detail.
1. Save money and remain with your current lender
A home loan check may highlight where you can save money. For example, introducing an offset account that contributes towards paying off the interest of your loan may be a good addition. Or removing an offset as you may be paying a fee and not using it or could just use a loan with flexible redraw with less fees and a lower rate.
Contact your broker and ask them to request a lower rate with your current lender. Often there are better rates even with the same lender. Some lenders only reprice based on loan size and LVR, but it never hurts to ask. Our team often are trying to negotiate a better rate with a lender on behalf of our customers.
By increasing repayments or changing them to weekly or fortnightly repayments instead of monthly.
Use a repayments calculator or chat with your broker to work out how much you can save by paying a little extra. It may even help you pay off your mortgage sooner. Who doesn’t want to do that? Try WhiteStar Home Loan repayment calculator
2. Manage your finances / consolidate debts /budgeting
Apart from simple ways to achieve savings, you may also be able to manage your overall finances better.
A weekly budget may be key in seeing where your money goes, and where it can be saved or redirected.
Check out the WhiteStarmoney app, it is a simple way to track your budget. Some lenders also offer online applications to help you set and track a simple budget. Contact your lender for more details.
You might want more flexible repayment options, such as the possibility of splitting your loan between fixed and variable rate. ‘
You may also want to consider consolidating all your debts into one loan. Although this extends the interest on short term debts it can improve your overall cash flow. This is a great way to be able to manage your finances in a simpler way. Fewer payments to meet every month can allow you to manage your finances better and direct more towards your mortgage.
Chat with your broker as consolidating high-interest short term debts into your mortgage may not always be the best overall saving.
Refinancing may be a good option, particularly if you aren’t happy with your current lender or even if you are but they are just not the most suitable option for you right now.
Refinancing may also include looking at what type of home loan is best for your overall needs. Some options include fixed, variable, principal and interest, interest-only, split between various options, redraw, with an offset or without an offset, land, construction, non-PAYG and equity release.
Each option has different loan features that may or may not suit you, some are cheaper, and some come with extra fees or higher rates.
Sometimes a broker may want a new valuation as many lenders offer better rates to those with more equity. Your equity may have gone up and the lenders do not offer you a cheaper rate. Valuations can vary from lender to lender sometimes as much as $50,000 to $80,000. That higher valuation can change your interest rate altogether and create a saving that is well worth the effort.
What does a home loan health check look like?
A mortgage broker will want to understand more about what your situation is now and what you may be wanting in the future. They will review your current financial information and with an understanding of credit policy and pricing, they will make some recommendations and provide some comparisons.
They will check if your loan is still competitive and take the stress of dealing with lenders out of the process for you.
There is quite a lot of paperwork involved now however most of it is done by your Broker. You will be asked to provide certain documents and then the rest will be up to the broker to work out alongside you to make it as easy and stress-free as possible.
It is advisable to get this check done at least once a year, as lenders are changing drastically and your situation may also be changing.
A simple home loan check may help you save thousands of dollars a year. If you are on an unnecessarily high home loan rate, it could be costing you years to pay off your home loan.
Once you receive a Home Loan Review or check you may find out you are in a better position than you thought with more opportunities to save and achieve. Imagine finding out you could have purchased an investment property years ago and you just didn’t know about it.
4. Upgrade, Downsize, renovate or invest
Once you receive a Home Loan Review or check you may find out you are in a better position than you thought with more opportunities to save and achieve. Imagine finding out you could have purchased an investment property years ago and you just didn’t know about it. Better now than never. If you found out that you could invest in another property that financially takes care of itself, wouldn’t you want to know about it?
Options of moving to a more affordable area and renting out your existing home could save you money, while someone else pays off your mortgage.
Renovating and selling your home could lead to a great financial windfall in the long term. Just be careful not to overextend.
Renovating and staying where you are instead of selling and purchasing may also save you in agents costs and stamp duty.
So, what are you waiting for? Contact a mortgage broker and start the home loan check process, today.