Taking out a mortgage is a huge decision and it’s often hard for our clients to figure out what’s right for them. Here are three things that are commonly misunderstood by buyers.
Our clients need to consider more than just the interest rate attached to a home loan product. It’s important for a borrower to consider the features and fees of a loan such as redraw facilities, limitations on the loan and break costs on fixed rate loans. The right loan is the one that suits each client’s personal circumstances and financial goals.
There is a lot of choice out there when it comes to finding the right lender, including smaller banks and non-bank lenders. Often these smaller lenders have extremely competitive and flexible home loan products available, and every lender has different criteria to address. There are literally thousands of options out there and researching everything on offer can be daunting.
It might seem easier for our clients to go with a major bank, however, mortgage brokers are constantly up to date with the latest products across a whole range of lenders, which can often lead to finding a more suitable deal outside the big four.
The RBA controls Australia’s official cash rate (OCR) and whilst movements either up or down in the OCR certainly influences lenders and the interest rates they offer, ultimately every lending institution can change its interest rates as they see fit – whenever they like. Rate movements across lenders is not solely determined by the changes in the official cash rate.
It might seem obvious but to a new buyer, these tips can be the difference between making the right decision. When your clients have the guidance of a mortgage broker, they can be given more information and more home loan options.
Reference: Loan Market June 2016