If you are a first home buyer getting ready to meet a lender for the first time, you probably have mixed emotions—the excitement of buying your first home is diluted by the tension you may feel because you don’t know what to expect. The lender has what you want and you may feel like you are at the lender’s mercy.
Try a Mortgage Broker First
Mortgage brokers have access to multiple lenders. In other words, you can go through the process once with a mortgage broker, who will pick from multiple lenders to find you the best product, or you can go through the process multiple times with multiple lenders because you didn’t go to a mortgage broker.
The lender or mortgage broker will ask a lot of questions about your financial situation. You need to be prepared to not only give truthful answers, but back them up with paperwork such as wage slips and bank statements. After the broker or lender has interviewed you, it’s time for you to interview them. Here are some things you should ask about.
While the interest rate is extremely important and can make or break a home buyer, the comparison rate is what will give you the best snapshot of the actual cost of the loan. Lenders are required by federal law to provide you with a comparison rate. This contains the amount of the loan, the term, the repayment frequency, the rate of interest and the charges and fees involved with the loan.
These can include statutory and Government fees, valuation charges or Lender’s Mortgage Insurance or event-based fees such as those for early repayment.
Questions About Your Home Loan
- Is there any penalty for extra repayments?
- Do you get free redraws? Are there any limitations on them?
- Can you change your fixed rate into variable or split or vice versa with no added costs?
- Is the loan transferrable if you move?
- Can you pay directly from your salary?
- Can you pay fortnightly or weekly?
- Can you choose between interest only or principal and interest payments?
We Can Help
Call Purely Finance today on (08) 9453 8888. Our mortgage brokers will find the best loan for your financial situation.