Home loans are a finicky subject,
One of the most significant purchases to be made in one’s entire life is that of a home.
A mortgage may look juicy in the beginning, but with several expenses lining up in the years to come by, it’s wise to have a critical rethink.
A truth many have not discovered is that you can get a better deal on a mortgage over time. That’s right!
Why stick to a plan that was made over 10years ago when you can have a home loan health check every year? A home loan health check may significantly reduce your payback rate.
“How is this possible?” you ask.
The market conditions change from time to time, and smart home-owners have learned to take advantage of the market conditions.
Some benefits of switching mortgages include a reduction in the interest you pay, lower annual fees amongst other juicy loan features. You need the services of an adviser for ensuring the process goes smoothly, but have no fears; it’s free! Also, depending on your mortgage payment structure, the cost of the paperwork required is very little as compared to the savings to be made from a successful review of your home loan. The little discomfort to be experienced during the process is nothing to be compared to the years of discomfort to be experienced when you shy away from negotiation.
The Home Loan Deal
Before you beat yourself up on the kind of deal you took from the start, it is essential to iron out some things. The deal you are offered depends on several factors such as your credit score, age, repayment history, and customer loyalty. One crucial factor many forget is the state of the lender. The figures on the lender’s balance sheet play a significant role in how much they can give out at that time and the interest rate on the deal. Many banks have their limits, which reflect in the category of loans they give per time. Here, this does not depend on the credit-worthiness of the borrower.
How Much Can I Save On My Home Loan?
This is a question one must ask. It determines if the home loan decision is worth it or not. The amount of money you can save on your home loan depends on the market trends. These market trends change frequently. Hence, it is essential to review your home loan annually.
The market trend and the loan appetites of lenders per time change the interest rate of loans. Depending on how good your adviser is, you can save a significant amount from home loan reviews. It is possible to save up to $20,000. However, that would require much restructuring on the home loan. Switching lenders is on the rise. Switching lenders proves to bring profits, but experts say it is vital to calculate the cost of money and time it takes to switch lenders.
A typical cost is when there is a need to pay another annual fee. Home-owners have to think these factors through before taking any decision or calculating what their profit would be.
While it is possible to make a profit, a break-even or a total loss is also possible when switching lenders; especially if it is not a carefully planned process.
DIY or Use the Services of a Home Loan Expert?
Calling your bank all by yourself and taking charge of your mortgage review sure deserves some applause. It gives room for flexibility, as you can review your home loan whenever you deem fit. Several sites also provide you with information and guidance on how you can get a better deal.
Nevertheless, using the services of an adviser helps you tap into their vast knowledge base on the subject matter. The negotiation skills of an adviser also prove highly beneficial. They know how to look at your home and determine how much it is worth to your current lender. Advisers recognize that you are a precious customer to lenders and they use that to advantage. They bargain for you with a sense of understanding. Experts have a broad understanding of interest rates and how to lower them, the entry and exit costs of your home loan, and how you can exploit your customer loyalty. They help you harness these tools.
A home loan health check is similar to medical health checks in the sense that it is best to do it with the professionals. Their broad view on the market serves to open your eyes to areas you never considered and opportunities you never saw.
To Wrap It Up
The ‘good’ deal you signed many years ago may not be so good today. You cannot go wrong with reviewing your home loan. While reviewing your home loan is necessary and advantageous, doing it right is even more critical. Take action today.
Written by Demi Oye and Iva June.