A common trap some home-owners fall into is to consider a mortgage “set and forget”. You did your research, shopped around and now you’re reluctant to revisit the process.
But circumstances can change, leaving your home loan less suitable than it was originally. A home loan health check can reveal if you’re paying too much.
What’s involved? Your finance broker can do a full home loan health check for you, either in person or over the phone. They will check if your loan is still competitive and still suited to your needs.
Having an expert do this for you can also take the stress out of the process for you. It is advisable to get this check done at least once a year, or if your circumstances change. Be aware of what you want checked. Think about the following:
- Am I paying a high interest rate?
- Am I paying high fees?
- Am I happy with the service I receive?
- Does my loan give me the features I need?
- Am I paying for features I don't use?
- Have my financial circumstances changed or could they be changing shortly?
A home loan health check will generally cost you nothing and could save you thousands. Your home loan features could be improved or you could get a lower interest rate. A better payment structure could also be introduced, making your repayments more manageable.
In some situations it can be suitable to refinance your mortgage. Refinancing involves taking out a new mortgage and using those funds to pay off your existing mortgage. Doing it right could deliver significant financial gains over time.
The loans market is highly competitive and interest rates can vary significantly between lenders, so one of the most common reasons for refinancing is to get a lower rate. This could help you pay off your home loan sooner.
Even if interest rates haven’t fallen since you first took out your loan, you can sometimes access a better rate if your financial situation has improved. This is where a broker can be invaluable.
Keep in mind, however, that not all mortgage products are the same. A mortgage with a lower interest rate may not have all the benefits of your existing loan, so be sure to carefully consider all rates, fees and features.
Loans are by no means one size fits all. Understanding which home loan features are right for you, your situation and even attitude to money is paramount, as is dealing with the right broker to help you through that process.
Olympia Andronicos is a credit representative (507463) of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237). Choice Finance Specialists 0418 690 628.