Shopping Around Lowest Home Loan Rates in Australia

Many home owners make the mistake of going directly to a bank or a lender, and signing up for a home loan that is not right for them. If you feel that your mortgage payments are too high, switching home loans could be a good choice for you.

Don’t Settle

Unlike what most people think, switching home loans is not really difficult or expensive, if you shop around and get the best possible deal.

First, study the types of loans offered by different lenders and the features of each one. Creating a ‘key facts’ sheet will help you do some comparisons with your current loan and the different new ones you are considering.

Once you have found a few good options that offer you the features you are looking for (like additional or more frequent repayments or smaller monthly payments), compare the interest rates, repayment amounts and the fees applicable. Another thing to ensure is whether you will have to pay for features you are not going to use.

The length of the loan is another factor to consider. 25 to 30 year loans might not be a good idea the second time around, unless you want the flexibility of lower monthly payments.

Consider the costs of switching

There are different fees and costs applicable upon switching:

• Exit fees: While newer variable rate loans (taken out after July 1, 2011) cannot charge exit fees, older loans often charge some fees if you exit the loan.
• Start-up fees: Once you take out a loan, you will have to pay start-up fees. This should also be factored in.
• Break fees: Fixed rate loans sometimes charge break fees, when you leave the loan early.
• Lenders Mortgage Insurance (LMI): If you take out a loan for more than 80% of the value of your home, you will need to pay for LMI – insurance for your credit providers if you default on the loan.

But if you have taken out LMI for your current loan, and have made sufficient payments, you might have enough home equity and might not have to pay for LMI this time.

At You Finance, we understand that most people don’t have the time to spend researching all the available options. That is why we offer refinancing and home loan Australia services for our residential clients. You tell us your requirements and what you are looking for in a home loan, we do everything else.

Don’s involved in making a switch.

The author holds expertise in all types of financial loan & other financial strategies. So, if you are looking to make a switch & save money on Home loans then consult http://youfinances.com.au/ professional experts.