National Mortgage Brokers --- Home Loans: Shopping Guide

nMB Home Loan Shopping Guide.....
For most of us, buying a home is perhaps the single largest purchase decision we’ll ever make. An enormous amount of time is usually given to finding the home of our dreams – but what about the loan? This part of the process is usually left to the bank we have always had a savings account with…..but is it the best solution?

With a wide range of lenders offering hundreds of products, choosing the right home loan or investment loan is not always a simple decision to make. For most of us the exercise of finding the right loan is not only time consuming – it’s confusing too. Here are a few steps to consider when shopping for the best home loan.

STEP 1 – Determine Your Current & Future Situation
When trying to identify the best loan, it’s always a good idea to start by fully assessing your current and future circumstances. This will certainly help when it comes time to selecting the required loan features. Here are a few questions to ask yourself that will contribute towards your needs analysis:

What is the exact purpose of the loan?
Am I eligible for the first home buyer’s grant?
How much of a deposit have I saved?
What is my credit history like?
What are my total assets and liabilities?
What is my total income and is it likely to change in the near future?
Do I plan on having a family in the near future?
Do I plan on renovating or extending my home any time soon?
Am I looking at investing in property or shares at some point?
Am I disciplined at sticking to a budget?
Do I plan on moving homes in the future?
Am I planning on retiring soon?

STEP 2 - Decide On The Features You Would Like To See In Your Loan
By determining your current and future situation, you are more than half way there in identifying the features and flexibility you may require in a loan product. Here are a few more questions to ask yourself……do you want:

The absolute cheapest loan forgoing some of the bells & whistles?
A loan with a low introductory rate?
A fixed or a variable rate loan?
A line of credit?
A split loan facility?
A 100% offset facility?
The ability to redraw any additional payments made against the loan?
Internet access to your loan account?
Phone banking access to you loan account?
Repayments to be directly debited from your account?
To make interest only payments?
Flexible repayments - weekly, fortnightly or monthly options?
The ability to make additional payments?
Portable so that in the event you sell your home, the loan moves with you?
Benefits such as a free credit card and discounts on other products or services?

STEP 3 – Make A Decision On The Best Product & Lender
Now that you have narrowed down on your personal situation and the key features you would like in a loan, it is time to select the best product and the lender that supplies it. When selecting the best product and lender, give some thought to the following:

How much will lenders allow me to borrow?
Your total borrowing capacity may vary considerably from lender to lender.
Do I require lenders mortgage insurance?
What type of lender would I be comfortable dealing with?
What are the best comparison rates available?
What are the total fees and charges associated with each loan?
Will I be locked into the loan for any given period?
Are there any break costs if I want to payout the loan early?
When do lenders set fixed rate products - at approval or settlement?

Shopping for the right home loan that suits your individual requirements is no mean feat. It requires a considerable amount of time, thought and research.

By answering the questions listed in steps 1 & 2 you will have a much clearer understanding of the features and flexibility you require in a loan. It will also help reduce the loan interview time considerably. Step 3 will assist with your comparative research of loan offers available in the market place.

So whether you plan on conducting your own research, or utilising the professional services of a mortgage broker – take the time consider your current and future needs as well as the features and flexibility you are looking for…..it may very well save you the cost and stress of refinancing your loan down the track.

Feel free to browse through the nMB website on how we can help you select the right home loan or investment loan. When you're ready to take the next step, please don't hesitate to contact us online or call 1300 668 662.