1. Not shopping around
It can be tempting to take out a home loan with your existing bank – it’s convenient, they’ve got all of your information on file, and you already have your accounts with them, so why not? Unfortunately, the mortgage advice your bank provides will always be in their favour, and it’s likely not the best home loan you can access. Make sure you do your research to see what other banks and lenders are offering – if you’re still not sure what the best move is for you, chat to a Haven mortgage adviser. We can help you weigh up your options and decide which home loan will work best for you situation.
2. Limiting your flexibility
Depending on what your situation is, it’s a good idea to find a home loan that will be as flexible as you need it to be. Many common mortgage types don’t have a lot, if any, flexibility around things like extra repayments. If you know that you’ll soon be receiving an influx of cash, you might want to make extra payments on top of your regular mortgage payments – certain home loan types will charge a fee for this or won’t allow it all so you need to make sure your home loan has the flexibility you need.
3. Fixing interest rates for too long
When interest rates are low it can feel like a good idea to fix these rates in on your mortgage for as long as possible. There are a few issues with doing this however, if you fix for 5 years, there’s always the risk that interest rates will lower even further – these changes are hard for even the experts to predict and you could be missing out in the long run. You also run into any issues and fees if you want to move banks or lenders or make extra repayments – you’re essentially locked in to one type of loan with one bank for longer than you might need to be.
4. Not paying attention to fees involved
A lot of people who are setting up a mortgage focus solely on the interest rates as the main point of difference, but some home loans that may have better rates may actually also have higher fees involved. It pays to know exactly what fees and costs are involved in every mortgage type – there’ll likely be fees for set up, repayment default, and early repayment, so be sure to compare these across all of the loans you’re considering.
5. Not negotiating interest rates and fees
It’s not rude to negotiate the interest rates or fees offered – the banks expect it and if they want your business, they’ll likely play ball. The mortgage rates the bank advertises should be thought of as a starting point, as banks are often prepared to be flexible with them depending on a number of other things including how much other business the client can put with the bank. A mortgage adviser can do the hard yards for you and negotiate on your behalf – they know how it all works and know what makes the banks tick!
If you’re not sure where to start or you just want to make sure you’re getting the most out of your current mortgage, get in touch with our friendly team of mortgage experts today!
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