Paying off your mortgage should not be the centre of your life – not even close. So why do people put themselves through unnecessary stress?
Although most lenders allow you to manage some parts of your home loan online by allowing you to make redraws and transfers, there are major structural changes that you could be making to relieve your worries and get your life back!
Why annual reviews are essential
If you just bought a new smart phone, you wouldn’t just use it to make phone calls, would you? There’s a whole world of apps and features to explore as well, some more useful to you as the user than others. The same goes for a home loan.
It’s amazing how many people with mortgages are not aware of the important features they have at their fingertips and whether they’re getting the most out of their loan.
An annual review from your mortgage broker can potentially save you thousands of dollars and a lot of headache because they can check:
- If the lender has changed interest rates recently and whether your interest rate is still competitive.
- Whether your personal situation has or will change in the future including starting a family, renovating your home or buying an investment property.
Not a Home Loan Experts client? We can still complete a free review of your mortgage as a once off check!
We want you to have peace of mind throughout the life of the loan so apply or refinance through Home Loan Experts today by calling one of senior mortgage brokers on 1300 889 743 or enquiring online.
How to fix your loan
Based on the state of interest rates and your own finances over the medium to long term, switching your loan to a fixed rate may be a more viable option than staying variable.
So how do you switch to a fixed rate?
The first step is to speak to your mortgage broker to discuss whether now is the right time to fix. You will also need to determine how long you want to fix for based on your situation.
With most lenders, you can simply give them a call and they can fix your interest rate over the phone.
You also have the option of “splitting” your mortgage into accounts, keeping one fixed and one variable to give your more flexibility over the term of the loan. Some lenders require that you fill in a form, if you only want to fix only a part of your loan.
Most lenders will have a small processing fee of $300 or so to fix or split your home loan.
Your broker can tell whether fixing your home loan is the right decision for your situation so call 1300 889 743 or enquire online today!
How to discharge your loan
If you’re planning on selling your property or refinancing your home loan you will need to notify your current lender that the mortgage they hold is going to be discharged and that your loan will be repaid.
In most cases, you will need to fill in a Discharge Authority Form or Release of Security Form. Luckily, you can simply fill this out and hand it to your mortgage broker to handle.
If you are not using a mortgage, our discharge of mortgage page can explain to you the process of discharging your home loan.
When you discharge your loan within the first two years you will generally incur a clawback fee of around 0.65% of your outstanding loan amount, although this does vary between lenders.
If you’re planning to refinance, did you know that some lenders offer rebates?
Please call us on 1300 889 743 or enquire online and one of our brokers can assist you in discharging from your current mortgage and refinancing with a new one.
What if I get into financial hardship?
Things like losing your job, illness, injury or divorce can be emotionally devastating for you and your family and it only compounds matters when you then struggle to make your mortgage repayments on time.
If you are experiencing financial difficulty, talk to your broker. They can contact the lender to explain your situation and get you back on track to paying off your loan.
Can you pay off the outstanding amount now or over the next few months? Do you need to sell some of your assets? Should you consolidate your debt? Here are some of your options:
- If your problems are short-term, you and your broker can work with the lender to temporarily reduce or delay repayments. This so-called “repayment holiday” is not something lenders offer lightly so it really depends on your situation.
- Most of the major banks have a hardship programs in which they can assist you by temporarily charging interest only on your loan
- If you are currently on a standard variable rate, switching to a fixed rate can provide you with more certainty with repayments and allow you to get on top of your finances.
- You can also minimise your repayments by rolling all your debts into one with a debt consolidation loan.
If you’re an existing client, one of our mortgage brokers can help to find you a solution.
Call us on 1300 889 743 or enquire online today!
Increasing your loan
Rather than taking out a separate loan in order to renovate, paying other debts or simply because you need extra cash, increasing your loan is sometimes a better alternative.
One of the benefits is that you can leverage the equity that is already in your home and you’ll generally pay a home loan interest rate rather than the more expensive rates that come with personal loan and credit options.
Most lenders will allow you to increase your loan size as long as you can show evidence that you can afford it and you have enough equity in your home. Banks aren’t too concerned with what you do with your loan increase as long as you can pay your new loan balance in full and on time!
The establishment fee for a loan increase varies but most banks will charge you a variation fee of about $300. If you’re on a professional package though, the variation fee can be waived for some lenders.
It’s important to get independent financial advice before deciding to borrow more. If you can’t afford the mortgage now, you won’t be able to afford pay back a larger amount.
If you need help managing your loan or if you want to get more out of your mortgage, call one of our expert brokers on 1300 889 743 or enquire online and we can complete a free review of your mortgage.