Considering getting a home loan? Congratulations on wanting to pursue the big step of owning your own home or getting an investment property. Believe it or not, choosing the right bank can often be harder than choosing a home itself, and the choice of bank will ultimately be the final decider in terms of how much you may borrow and what your repayments will be (inclusive of any bank fees).
For some it is not a choice, but a necessity to go with a particular bank. For instance, a number of banks might only allow you to borrow a set amount of money, but one particular bank might be open to lending you your target amount which sees you match the property you like. For others it can be a lucky choice. So what exactly helps decide which bank is right for you?
One great starting point is to explore all the options with your existing bank where you hold your savings and credit accounts. Your current bank already knows your savings history and they would love to advance your involvement as a customer to greater ends than to let you go off to another financial institution in pursuit of other services. Your existing bank will generally be very willing to spend time with you to assist you get the loan you want.
Lowest interest rate is the key but not always necessarily a winner. A low fixed-term interest rate is a real attraction when it comes to a loan but it is not necessarily always the winner. Look at the whole package, including fees and special privileges such as an offset account. Which sounds better; a 5.15% loan with $400 per year account keeping fee, or a 5.25% loan with no account keeping fee, or a 5.35% loan which offers an offset account? Do some calculations and weigh up the expenses to see where you might stand annually.
Tell a bank about other offers you are receiving. Banks are ultimately driven by competition and will want to have you sign with them for a loan. In certain areas depending on your financial situation they are able to lower the interest rate, so don’t be shy to see what other banks have offered you to see if they can do better.
Make sure that you get all the details about every loan. Simple things like being able to make extra payments, or paying off your loan quickly are absent with some bank loans so make sure you ask all the right questions and make a comparison of all the banks you enquire with to see what each can offer you in terms of pros and cons.
The most important of all to remember is that it has to be the right loan to match your needs and what will ultimately be more cost effective for you. We at SwitchMyLoan are here to do all the work for you and tell you what each bank will currently offer you and how much you will pay and save compared to the other banks. We offer a specialised calculator on our front page, so don’t be shy to give it a try and see what the banks are currently offering and who might benefit you the most.
Call 1300 307 155 and start saving today!
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