Thinking of buying a home? Good for you! But before you officially look for your new home, one of the first things you need to do is find a lender for the mortgage. Having the right lender is crucial for less stressful home ownership—you’ll be paying that mortgage for a long time, after all. To help you choose the right lender, read on for some tips.
Determine what you want in a lender.
Every lender will offer you different deals and loans. Decide on what type of lender fits you—a small or a large lender. Do you want more personal customer service? Do you prioritise getting the right interest rate? These questions can help you decide.
While searching on the internet can yield many results, it will be hard to sift through them and decide. To make the process easier, ask your family, friends, or coworkers who purchased a home within the past few years. They can tell first-hand experiences on loan rates and other features. Not only it will shorten the searching process, but you will also get recommendations from the people you can trust.
Consult your agent.
If you already have an agent, ask them for recommendations. They will give you in-house lenders and other good lenders in the area. When a homebuyer comes to a lender through a recommendation from an agent, a smart loan officer will take special care of them—use that to your advantage. This will help break the ice and might also help reduce closing costs.
Research is, as always, your friend.
Even though your agent and friends recommend a lender, you must still do your research about them. Check online reviews, ask in forums, speak to past clients of that lender. Don’t hesitate to ask questions. Doing as much as research about lenders can save you from hassles later on.
Ask about their fees, repayments, and features.
When you’ve done your research and narrowed down your choices, it’s now time to do legwork—going to the lenders and asking about their products. This can help you finally choose the lender you want. Here are some questions you can ask them:
Package or Basic? How much is the package product fee? Compare the amount of interest you’ll save in a packaged product, the package product fee, and the rate of a basic product. If the package product fee is higher than the interest you’ll save, it might be better to stick to a basic product.
Do they allow extra repayments? If so, are there extra fees?
Will they allow you to redraw your extra repayments in case you need them? Are there fees involved?
Is portability part of their loan features? If you’re getting a loan knowing that you may be buying and selling before it expires, you might pay penalties and exit fees. A loan with portability can prevent that.
How much are their LMI premiums? Make sure to ask if they offer lower rates for first home buyers.
Do they offer an offset account?
What is the maximum interest only term a borrower is allowed to have?
Finding the right lender for you can be a daunting task, but it’s beneficial in the long run. Good luck with your search! If you need help or advice, you can always send a message.
BEN WAKELY | 0405 000 219
Bardon Agent of the Year