How can you choose the right lender to meet your needs? “It all depends,” Shahnazari says. “They should listen to what you want, give you what you need by recommending a product that really suits your needs, and provides you with the ongoing service any customer deserves.”
- Comparison of a package and a basic product
“Is the amount of interest you save under a package higher than the actual annual package fee, or are you better off with a basic product with lower rates and no fee?” she asks. The loan amount exceeding $250,000. is usually more expensive for a basic product.
- Principal Reductions
Are there any additional payments that can be made if you are in a financially difficult situation?
This option is offered by the lender if you need access to additional payments.
- Exit fees
“When you fix your loan knowing that you may be selling and buying before the fixed term expires, ask whether you can use portability to avoid paying Early Repayment Penalties or exit fees,” Shahnazari says.
- Lenders mortgage insurance
What is the LMI premium charged by the lender? Do they offer lower rates to first-homebuyers “A few lenders offer up to 85% LVR without LMI, so shopping around can save you thousands of dollars,” she says.
- Only interest
What is your maximum term of interest? This could affect negative gearing for investment properties.
- Offset features
“Does the lender offer a true transactional offset account? Not having the facility could mean paying tax on your savings, instead of paying less interest on your loan,” she warns.