5 IMPORTANT FEATURES TO LOOK FOR IN A VARIABLE HOME LOAN:
Tue 20 Sep 2016
Are you currently on the market for a variable home loan? If yes, choose the appropriate variable loan for your unique needs by taking note of the following features.
1. Repayment Flexibility Combined with a Redraw Facility
Most variable rate home loans nowadays offer a redraw facility. This feature allows you to make extra payments above the required minimum, as well as access the extra funds if needed. By making additional payments, even if it is just $50 or $100, you can already make a serious dent in the overall cost and length of your loan.
2. Low Interest Rates and Charges
Lenders offer variable rate loans in different competitive charges and rates. When shopping, do not just focus at the introductory rate of the loan. Know exactly what you are getting by requesting for the key facts sheet. It will explain everything you need to know about the loan, including the total cost, repayment amounts, and fees and charges.
3. Home Loan with an Offset Account
Offset accounts, also called as mortgage-offset accounts, are linked to your loan. Through an offset savings account, you can significantly cut off the life and amount of your loan and save thousands of dollars. This feature usually comes with a credit card or ATM for easy access to the funds. Make sure to pick a home loan with a 100% offset account.
4. Freedom to Pick Your Repayment Plan
If you want to reduce significantly the life and interest of your loan, making frequent repayments is one of the simplest ways to do it. Search for a lender that allows you to make fortnightly and weekly repayments without any charges.
Example:
Your principal and interest home loan has a 6% rate and 30-year term. If you make payments every two weeks instead of every month, your home loan is reduced to $86, 842 and five and a half years.
5. Availability of a Banking Relationship Manager
A banking relationship manager can make your loan application process less daunting. He can give you expert advice and help you with other things related to your loan application, like in settling your existing home loan and preparing the supporting documents and paperworks.
Choosing the right home loan offers borrowers different benefits, such as flexibility, convenience, and competitive fees and interest rates. Since your needs are different from others, ask a financial adviser to help you out
