Home loans – 5 common mistakes to avoid

Finding the right home loan can be frustrating and filled with complications. Here’s what you need to avoid.

1. Don’t borrow just because someone is offering it

It’s easy to be tempted by a big loan, but don’t fall into this trap. The general rule is that you can borrow around 2.5 times your gross salary, with all existing commitments taken into account. Extending beyond this will put you under unnecessary amounts of financial stress. Find out your borrowing capacity right here.

2. It’s not just about the interest rate

Interest rates are important and definitely part of the consideration process – but they are not the whole story. Watch out for upfront fees, exit fees and in some cases ongoing fees that often get hidden away in the small print. Advertised rates don’t always give the true picture, so take some time to calculate the full financial impact of your loan to avoid any nasty shocks after you’ve signed on the line.

3. Get pre-approval before you start shopping

Getting on the property ladder is an exciting step – but make sure you have all your ducks in a row before you start hitting the open houses. Finding your dream home – and then getting pipped to the post because you don’t have finance organised is not the best start. Get pre-approval sorted in advance – and you’re good to go.

4. Check your credit file

All lenders will conduct a thorough check on your credit history before offering you a loan so it’s a good idea to address any outstanding issues you may have long forgotten about. Your credit rating will detail your repayment history as well as record the number of applications you have made for credit to date. If you think you may have any credit issues that might impact your loan, talk to us today.

5. Shop around!

Don’t assume your current bank is going to offer you the best deal as a longstanding preferred customer. Unfortunately, they are actually highly unlikely to do this!

So, what next? Pick up the phone and call us. Here at MoneyQuest we are all about finding the most competitive rates and the best home loan for you.

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