Choosing a lender for your mortgage is a crucial part of the process for buying a home. Every person is different with unique situations, goals and needs and as a result the lender and mortgage you choose needs to match your own unique circumstances. While the search for the perfect lender can be difficult, there are some key considerations you’ll want to keep in mind when comparing multiple lenders.
Making Extra Payments
Making extra payments on top of your monthly repayments will usually allow you to bring the principal down and pay off your loan faster. Pay attention to if the lender allows you to this or allows it but attaches fees to making extra payments. Additionally, check if the lender allows you to redraw these extra payments. Saving money in a redraw facility will also allow you to reduce the interest on your loan.
Some lenders can charge exit fees if you leave your current loan before the end of the loan term or if you pay off your loan early. It is important to check whether the lenders you are considering charge this as not every lender will charge exit fees.
Lender’s Mortgage Insurance
Lender’s Mortgage Insurance or LMI for short, is a type of insurance that a lender will require you to take out to cover the risk of you not being able to meet your monthly repayments. Typically lenders will require you to take out LMI if the deposit on your home loan is less than 20% of the value of the home. Some lenders will be more relaxed with this and allow lower deposits without the need for LMI so it is worth checking each lender’s policy on deposits and LMI.
One of the most important and overlooked things to compare between lenders is their level of customer service. You want to be sure that if you need to speak to someone about your loan there will be someone there to answer promptly and competently. Our brokers can help you before, during and after approval for your home loan so they can handle the frustrating phone tag while you focus on your new home.
These features are all important things to look for when comparing lenders and should be kept in mind when shopping around. Our brokers can make things easy for you by compiling the right options to suit you and your circumstances.
If you would like to learn more about what to look for in lenders for your mortgage please get in touch with us today.