Ah, the great Australian dream – owning your own home.
Most people look forward to the day when they’ll be able to own their own walls, or the perfect plot of land – but we often find ourselves getting confused by myths along the way. Since taking on a mortgage is the biggest debt you and your family are going to face, it’s important to make sure that you know what you’re getting for your money.
Research is the best way to ensure that you’re getting the right deal, and using a mortgage broker like the professionals here at Home Loan Cash Back is the perfect way to streamline your home-loan process. However, since knowledge is power, we thought we’d give you a boost by debunking some of the most common mortgage myths for you.
Myth 1: Refinancing isn’t Worth It
Deciding whether refinancing is right for you is something that will ultimately come down to your specific circumstances. However, if you’re paying too much on your loan and you need to try something new, you shouldn’t disregard refinancing as an option.
The big exit fees that used to be required to leave a bank were banned years ago on variable rate loans. Typically, is costs around $800 to switch your loan to a new bank and with Home Loan Cash Back’s great cash back model, you will usually receive more than this from us anyway.
The real savings will come from saving on interest. If you owe $350,000 and we save you 0.50%, not only do you receive more than enough initial cash back to pay for the costs of switching, you should be around $2,000 every year better off as a result. If you are on a fixed rate loan, get in touch as well, we have saved lots of people money which even meant breaking their fixed rate loans.
Myth 2: I Already have a “Life of the Loan” discount
The real question to ask yourself is what do you have a discount of? Lenders can change standard variable and benchmark interest rates however they like, and the rate that you get from your mortgage provider can vary drastically as you move through the life of your loan.
That means that just because you got a loan that felt competitive when you applied doesn’t mean it remains that way. The banks do not pre-actively call you and say “Hey, can we reduce your interest rate”, it is up to you and Home Loan Cash Back to do this.
Every few years, we at Home Loan Cash Back recommend that you review your loan in conjunction with the current market, and make sure that there aren’t better deals out there that you could be taking advantage of. Don’t worry, we’ll help you through the process every time and all the cash back usually makes you better off.
Myth 3: You Need at Least a 20% Deposit
For obvious reasons, applying for a mortgage with a big deposit improves your chances of being accepted. The less a bank has to give you so that you can buy your new home, and the evidence that you’re clever with your savings means that you won’t have to struggle so much to find a deal.
However, that doesn’t mean that you can’t get a home loan with less than a 20% deposit. You can still buy a property with under 20%, and many lenders will actually allow you to consider your purchase for as little as 5%. However, you might need to get some lenders mortgage insurance too or perhaps a family member can assist by offering their property up to assist.
Myth 5: You Have to Pay Brokers to Manage Applications
You don’t have to pay any money to work with us at Home Loan Cash Back. That’s just not how we work. Rather than taking money from you, we earn our income from the commissions that are given to us by the banks that you get your loan from. Those commissions can vary from one bank to another, and they involve an initial commission, as well as trailing commissions.
What makes us different from other mortgage brokers, is that we don’t pay a percentage of those commissions to realtors and other referral agents like accountants. Instead, we split the money that we earn with you 50/50, throughout the life of your loan.
Why not get started today?
