Have you ever wondered what a Home Loan Health Check is? It’s the single most important thing you can do to ensure you’re getting the most out of your finances.
Just as interest rates change, so do your personal circumstances. So while your home loan may have been the best one, five or 10 years ago, that may not be the case now. Spending a small amount of time reviewing your home loan can reap rewards, including:
- Secure you a lower interest rate
- Save you money over the term of your loan
- Reduce your repayments
- Consolidate your debt
- Give you flexibility to adapt to life’s changes
If you are planning to review your home loan, consider doing the following first:
1. Identify your goals
Find out if your home loan is able to support your current and future financial and personal situation by being sure of what your goals are. You could consider the following questions:
- Do you want to pay off your home loan faster?
- Are you planning to start or grow your family and need to reduce your repayments?
- Are you hoping to expand your property portfolio with investments?
- Do you want to unlock equity in your home?
- Would you like to renovate?
- Are you hoping to move to a bigger home or a nicer area, or both?
Thinking about your goals will help you work out whether your current home loan has the flexibility and features to enable you to achieve them.
2. Consider your costs and options
Don’t change your home loan just for change itself. Weigh up the cost of refinancing with the amount of money saved over the term of the mortgage.
Online home loan calculators can help you with this. And for more personalised figures, a mortgage broker can provide more specific information.
Fees or charges to watch out for include:
- Discharge and resetting costs
- Application fees
- Exit or break fees
- Lenders Mortgage Insurance if you’re borrowing more than 80% of the property’s value
- Charges for loan features such as redraw, branch and interest access
Remember this, if you’re largely happy with your loan but would just like a better interest rate, simply ask your current lender. They want to keep good customers, and you may be pleasantly surprised at what they offer.
Quick tip – buyer beware
Your lender can also do a health check compared to their other loans, but they won’t tell you if another bank or lender has a better deal.
Mortgage brokers have access to multiple lenders and loans and can quickly compare these for you to recommend one more suitable to your needs.
It’s becoming increasingly common in today’s competitive mortgage market, and on average, homeowners change their loan every five years.
How Home Loan Health Checks work
A Home Loan Health Check won’t cost you anything and is obligation-free, so there’s nothing to lose! At Aussie, we send you a short form to complete so we have the facts, and we’ll then meet with you to discuss your goals, review them against your current loan and look to see if there are other loans better for your circumstances and future plans. All we need to see are your current payslips, home loan statements and rates notices. Of course, more documents would be needed if you decide to refinance.
If you’re not sure whether you should review your home loan, download this “Home Loan Health Check” checklist. If you answer yes to one or more of the questions, it’s time to check the health of your home loan. It’s one hour of your time that could save you thousands.
Have you ever done a Home Loan Health Check? Tell us about your experience.