Is your home loan right for you ? Page 2

Loan Fees

You must be aware of all the fees and charges associated with your loan. These may not be

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apparent at first glance but will be reflected in the comparison rate of your loan. If you are looking for the cheapest possible loan then you need to include in your calculation the cost of set up, monthly fees, redraw fees, as well as possible fees if you refinance or pay off the loan.

Honeymoon Loans

Honeymoon Home Loans are great if you wish to take advantage of a lower rate in the shorter term, where your financial circumstances are likely to improve down the track. If you need the Honeymoon rate in order to ( life insurance )afford the loan - do not proceed with it. These loans present a short term saving only, as they revert to a standard variable rate at the end of the Honeymoon period.

Fixed or Variable

Many Australians are now looking at the escalating interest rates and are wondering if they should fix the rate on their mortgage or leave it as variable. There is no right ( mortgage quotes ) or wrong with this decision. Much depends on where you believe the rates will go next. While people often choose to fix to avoid the hurt of future interest rate increases, you should be aware that the market will often build the anticipated direction of future interest rates into their current fixed rates. Hence fixing the rate today does not necessarily mean that you will pay less in the long run.

Professional Package Offers

It is always worth investigating the Professional Package Loans offered by the lender of your choice. These generally offer a lower interest rate and despite their name are also available to 'non-professional' applicants.

Low Doc Loans

Low Doc loans are great if your tax returns are not up-to-date or if your circumstances are a little outside the criteria of the traditional lenders. These loans are low on paperwork and high on flexibility. We have seen many asset rich but cash-flow poor applicants do very well with such loans. The Low Doc Loan market is so competitive that Low Doc Mortgages are available through a number of lenders at rates not much different to the full doc loans.

Revolving Line of Credit

A great product where you have already built up some equity in your home, and would like to use it towards any worthwhile purpose. A Line of Credit is like a credit card but money is made available at home loan rates. Providing you are a responsible borrower, this is a great financial product