Take control of your mortgage
- Posted by: Nerida Punter
- Category: All, Helpful Resources
For most Australians, the largest financial commitment ever undertaken is their home mortgage. The prime objective of most is to pay it off as soon as possible, particularly as the interest is not tax-deductible.
There are so many options attached to mortgage deals that selecting the one for your personal circumstances is the first consideration. Will you benefit from extra features such as a redraw facility; mortgage offset account or a line of credit? Or should you go for a basic “no-frills” loan and make additional payments whenever you can?
Key tips for making the right decisions and taking control of your mortgage include:
- Visit a Mortgage Broker, such as The Savings Centre, to have them shop around for the best possible interest rate for your circumstances and objectives. Even though rates are historically low, interest is the single largest cost.
- If you want special features, look for a lower interest loan that offers what you want. Paying a higher rate for a loan with features you do not fully use may end up costing more in the long run.
- If you want to refinance your home loan, your broker should talk to you about the account fees and costs associated: application fees, stamp duty, valuation and legal fees. Quite often refinancing is justified, but sometimes it’s not.
- Make extra payments whenever you can and consider weekly or fortnightly repayments instead of monthly. This is particularly important in the early years of the loan when repayments are attributed more to interest.
Selecting the right mortgage and payment method may make thousands of dollars difference to your wealth in future years, so carefully assess your needs and seek professional advice from a mortgage broker right from the start. It will save you time and money.