Why you should get a home loan health check
Your home loan should change as your needs do. How has your life changed since you got your home loan? Have you received a promotion, started a new job or taken extended leave? Have you gotten married? Started a family? Or made any other significant financial decisions? Are you planning a renovation or a big holiday?
If you’ve answered yes to any of these questions, now is a good time to check if your home loan is still the right one for your needs.
Here are some reasons why it’s important to do a home loan health check:
To secure a more competitive interest rate
Interest rates can change significantly over time. A recent survey conducted by Mortgage Choice found that almost 40% of Australians did not know the interest rate on their home loan. A mortgage is easily the most significant financial decision households make and if you’re not on top of yours, you may not know that you’re paying more than you have to.
To pay off your loan faster
You might have committed to a 30 year loan but it doesn’t have to take that long to pay it off. A home loan health check could show you viable options to paying off your loan faster and getting out of debt sooner. You can also learn how you can build equity in your home to access down the track.
Like many borrowers, you might be coming to the end of a fixed rate term or interest only period. It’s important to take the time to have a look at what home loan offers are available to make sure you don’t roll over onto an interest rate that costs you more than it should.
To renovate or upgrade your home
A health check will help you determine how much equity you have in your property. You may have accrued equity if your property has increased in value, or you’ve paid down a significant amount of your loan. You can leverage the equity you’ve built to finance a renovation, buy an investment property and more.
To access home loan features
There are a variety of home loan features and facilities available to borrowers. For example, an offset account can help reduce the interest you pay on your mortgage each month. A redraw facility will allow you to access any additional repayments you make on your loan. It is important to note that some features will often come at a cost to the borrower but the flexibility could be worth it in the long run.
To simply get on top of your mortgage see how you’re tracking
It’s fair to say that your financial goals may have changed since you got your home loan. A home loan health check is a great way to check that your loan still aligns with your short and long-term financial goals and make changes if it doesn’t.
Your local Mortgage Choice broker can do a health check for you in no time at all. They’ll search through hundreds of loans from over 20 lenders to make sure you’re getting a good deal for your individual circumstances.
And if they find a better option for you, they will do all of the legwork to refinance your loan.
Republished with permission of Handyman.net.au.