We all know that it’s a good idea to review home loans regularly. But like reviewing insurance policies, it seems to be something we put off because we ‘don’t have time’ or our loan seems to be ticking along ok.
The reality is though, just because everything seems ok, it doesn’t mean it is. In fact, even if you are comfortably meeting your loan repayments, there’s a good chance you’re paying more than you need to – simply because you’ve never felt an urgency to look more closely into it.
If any of the following applies to you, it’s time we had a chat….
1. You don’t like paying a loyalty tax
You can read more about this here, but essentially if your loan is more than a few years old, there’s a good chance you’re paying a “loyalty tax” by paying a higher rate of interest. Lenders often don’t give their existing borrowers the best rates available, simply because they already have your business and don’t need to. Lenders tend to reserve their special rates and better discounts to new borrowers.
2. Your needs have outgrown your loan
We come across situations like this all the time. Perhaps when you originally established your loan, you went for a basic loan because it suited you at the time. You didn’t want a package (because the annual fee would have exceeded your potential interest savings with an offset) and you were happy with a variable rate loan. However, now that your household income has increased and you have a bit of surplus income each month, an offset account would be beneficial. You’ve also been wondering whether you should fix in a portion of your loan – so potentially a package loan may be more suitable for you now.
Certain types of loans suit particular needs. Which means that as your needs and objectives change, the type of loan that suits you best will also change. And if you stay in a loan that no longer suits your objectives, it’s likely costing you money and potentially stopping you from achieving your other plans.
This leads us into the next reason to review your home loans…
3. Your plans have changed
When you bought your home, you had planned for it to be your ‘forever’ home. However, after being cooped up over Summer and now spending more time at home as a family, you’ve realised that 3 beddy, 1 bath property you’re living in won’t cut it for much longer. Even if you think you’ve got a few more years where you are, it’s a good idea to talk about your upgrading plans well before you plan to upgrade. Because often there are things you can do now – tweaks you can make to your loan and loan repayments – that can make the upgrading process MUCH less complicated when you actually want to make a move.
4. You’ve got personal debt you want to consolidate
Keen to reduce your monthly commitments? Are you looking to consolidate personal debt you might have hanging over your head? Don’t keep putting off the conversation. Find out whether you can roll that credit card debt into your home loan. Not only may it help you to pay off your debt faster, but there’s a good chance it will help to reduce the strain on your monthly cashflow too.
5. You want to take advantage of the attractive offers lenders have available to new borrowers
Some lenders are offering attractive incentives to refinance – including refinance rebates and special discounts off rates. Whilst a rebate should never be the main incentive to refinance, they can help to cover the costs associated with a refinance.
6. You want to save money (or at the very least spend less on your mortgage)
Saving money is often the driving factor to conducting a home loan review. After all, why should you go to the effort of reviewing your loans if you’re not hoping to get something out of it?
We completely agree!
The thing is – there’s absolutely no reason for you to pay more than you need to, because you don’t even have to do the investigative work yourself.
Given the current climate, it has become more important to ensure you’re making the most of what you have.
That you’re not wasting money (on higher repayments) – especially when you don’t need to.
And that you’re improving your financial strength, so you’ll be ok for the rainy day.
We can help you with all of that.
Find more about our Home Loan Review service here.
Otherwise, provide your contact details here and we’ll be in touch.
