Are you making these 5 mortgage mistakes?
Whether you’re buying your first home or refinancing your third investment property, home loans can be tricky. The Credit Savvy team have put together a list of 5 mortgage mistakes you might be making. Let’s take a look below!
1. You didn’t get pre-approval
While using a borrowing power calculator is a great place to start, you don’t actually know how much you can borrow until you ask a lender. Lenders have very complicated formulas that they use to determine how much they will lend you and often use a lot of information that online calculators don’t take into account. It’s always a good idea to get written pre-approval from the lender based on your actual income and expenses.
2. You don’t know your interest rate
Research by UBank shows that 82% of Australians surveyed admit they don’t know their exact home loan rate. How do you know if you’re getting a competitive deal if you don’t know what you’re being charged? Knowledge is power, so make sure you know your rate!
3. You didn’t take into account all the costs
Your interest rate isn’t the only cost of the home loan. What are the fees? Do you need to pay stamp duty? Are you borrowing more than 80% and need to pay Lender’s Mortgage Insurance (LMI)? Do you require insurance? Will you need to renovate? It’s important to think about the big picture before you sign on the dotted line.
4. You don’t review your home loan regularly
Are you a set and forget kind of person? When it comes to your mortgage, don’t be! Our circumstances can change, maybe you now need extra features like an offset account, or you want a home loan package that includes a credit card. Get in the habit of reviewing your home loan regularly to make sure it still fits your needs and don’t be afraid to switch lenders to get a better deal. You can compare a range of home loans offers right now in our comparison service.
5. You didn’t check your credit score
Applying for a home loan without knowing your credit score or what’s on your credit report is a big no-no in our books. It’s a good idea to check your credit score and credit reports at all major credit reporting bodies in Australia before you apply for credit. Don’t get caught out by black marks or mistakes on your credit file. You can check your Experian credit score and credit report summary for free at Credit Savvy!
Visit our Learning Hub for more tips and resources on how to manage your home loan.