How do I choose a right home loan?

Excellent question - contact a reputable mortgage broker and ask them to guide you through the process

There is quite a bit of work that goes into selecting the appropriate lender and loan product - often there is more than one right option. It's best to arrange for a mortgage broker to sit with you and understand your circumstances, financial position and goals - with out this level of time and detail it can be challenging to know what your best options are.

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By determining what's important to you, e.g. is your goal to build equity to purchase another property, or do you want to pay the loan off ASAP, or do you aim for the same repayment every month to help with budgeting, etc. Mortgage brokers can help you by asking the right questions to make recommendations.

There are about 100 lenders in Australia, and over thousands of home loan products. Choosing a loan can be complex, time-consuming and let’s face it - confusing. Choosing a right home loan can be daunting. You can either compare loans by speaking to lenders directly, or use a mortgage broker to help you choose based on your circumstance. In your first meeting with a lending officer, or a mortgage broker, they will ask you a few questions, which will help them understand your requirements. For examples: Tell me about your credit history - This is important for the lenders, and they can see any credit defect in your credit report, and lenders would expect you to explain. Many lenders won’t offer loans to borrowers with past credit defaults, and mortgage brokers will help to navigate towards lenders who will lend. Tell me about your income - This helps to understand the income sources, if you are earning a salary or if you are self-employed. The income verification process and the documents required are quite different. Tell me about your property - This helps to understand the type of home loan required based on the purpose, either an owner occupied loan, an investment loan, or a construction loan. Tell me about your future plans and goals - This helps to know if you need flexibility with a variable rate home loan, or if you need certainty on a fixed rate home loan. Tell me what’s important to you about your mortgage - This helps to understand if you need any extra features for your home loan such as an offset account, or a redraw facility. How much deposit do you have for the down payment - This helps to understand the maximum borrowing ratio. Some lenders offer discounts on lower loan to value ratios (LVR). After selecting the right home loan type according to your requirements. It is good to select a few lenders, and compare the upfront fees and ongoing charges. Mortgage brokers will also help to choose a lender that will increase the chance of getting approved, and have your home loan settled on time.