It is often deemed to be a process that s brimming with perplexity when we think of comparing home loans to find the best deal. There are a multitude of websites and financial institutions that it is but obvious to find yourself in a myriad of questions. Nevertheless, you need not fret anymore. Here are a few considerations and important factors that you may keep in mind while you compare the different home finance options and thus find the best deal for yourself.
Factors that Impact your Choice of Home Loans
1.) Ask yourself – How long will you live in the home that you are planning to purchase?
If you plan to take a long term home loan that maybe lasts for about thirty years, then the interest rate on these kinds of loans remains the same for the entire loan tenure. Thirty years is not a short time and anything may happen! This is the reason why the financial lender is at a risk and charges you with a high rate of interest.
On the contrary if you are going for a short period home loan for say five or ten years, then the financial lender is at a lesser risk. This is probably the reason why you would be charged a lesser rate of interest.
2.) Calculate the discount percentage of the varied interest rates
3.) The value of the application fee varies from one to the other
4.) There is a monthly service fee on many home loans and this again is a point of concern when you compare these home financing options
5.) There is an interest only feature in many home loans that allows the interest only period as a cumulative amount on the entire loan with a cut off at five years. This five year period can be broken down into individual interest periods any time during the home loan period.
6.) There are a few home loans that offer a redraw facility.
7.) A few financial institutions will allow their borrowers to deposit additional payments during their loan period.
8.) Not many home loan lenders offer a 100 percent offset facility
9.) You can very well avail a home loan that gives you an LVR of up to 95%. However, a couple of lenders do not give more than 80 – 90% and this again depends on a line of terms and conditions
10.) These are lengthy form of loans and thus many financial institutions offer their borrowers with a switch over facility where the loan can be moved from one form to the other for the benefit of the borrower.
To compare home loans is not an arduous task but one that involves a series of research, knowledge about the loan terms and structure and the understanding of how interest rates can be calculated and compared in order to find the best deal. Always remember, your loan agreement has to be transparent with clear and crisp information. Every individual loves to have surprises but one that comes from the lender as an additional payment is not a joyous surprise. Thus, ask as many questions as you can to your home loan lender, grab as many points as you can and then fix on the best deal.