Do You Really Understand the Terms of Your Home Loan?

  • Posted 08 Feb
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Do You Really Understand the Terms of Your Home Loan?

Taking a closer look at the terms of your home loan make provide you with some unforeseen advantages that you’ll be able to use as you go through the many life changes ahead.

The one great thing about our home loan is that it was able to provide you with your very own home — a place to call your own and to make changes as and when you like.

But, if you’re not fully aware of the terms of your home loan, when life delivers that unexpected surprise, you could find yourself in a tricky situation and potentially not getting a lot of support from your home loan.

By taking the time to fully understand the terms of your home loan, you’ll ensure that it actually has the flexibility to change with you as you go through life…

 

 

Childless Couples

 

You’re probably thinking life is pretty good right now. You’re both earning great incomes and you have no debt and no kids.

Which is why this is the perfect time to get ahead on your mortgage. Think about making extra repayments, or make it so that you’re paying more off every month on a regular basis by switching to fortnightly repayments instead.

These small changes can make a big difference over the life of your home loan and allow you to pay it offer sooner than you think.

Looking at the terms of your home loan; you want to ensure that you’ve got a variable rate loan, at least for a portion of it, as this will provide you with the most flexibility in repayments.

Chatting to your mortgage broker about these options will ensure that if you need to change lenders or refinance, that you do so with plenty of options included within your home loan.

 

 

New Parents

 

So you’ve gone from being a childless couple with two healthy incomes, to new parents with a bundle of joy and a greatly reduced income, at least for a little while.

At this stage of your life, it might be a good idea to change your mortgage to a fixed rate loan, so that you can manage your budget and income.

With this option, you’ll be able to lock in the interest rate for a specific period of time, but you will lose some flexibility in doing this, which is why it’s a good idea to leave a smaller portion on a variable rate if you’re able to.

The point is to review your mortgage and make sure it’s meeting your current needs.

 

 

Family Life

 

You’re family is growing and the kids are starting to need their own space… actually, let’s be honest, you need your own space more than they do!

Perhaps it’s time to think about renovating your existing home, adding an additional bathroom and bedroom so that as the kids get older, you’re not pulling your hair out every morning while fight’s ensue over the bathroom!

You should be able to access the equity in your home to fund your renovations, but it will also depend on the type of mortgage you currently have. Check with your lender before you do anything to ensure you’re able to get the finance you need.

 

 

Plans Change

 

As you get older, your needs will change too. That’s why it’s important to constantly review your mortgage every 12 months to ensure that it’s meeting your current needs.

If you’ve got some set future plans, then you can plan ahead as well, which is where a mortgage broker like Australian Credit and Finance can assist. We’ll make sure your mortgage meets your current and future needs. Chat with your qualified team today!

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