If you’re a first-time buyer, the search for great home loan interest rates can be a challenge at best and a nightmare at worst. However, if you follow some tried and tested methods, you’ll greatly improve your options when it comes to getting the best home loan rates out there.
While every home loan application is different in the eyes of a lender, there’s a certain amount of leverage you should ensure you have before making an application. With everything from credit scores and deposits to research and avoiding hidden fees, you might feel like you’re in a bit of a minefield.
But, there’s no need to worry as we’re here to let you know the ways to position yourself which can increase your chances of receiving the best mortgage rates possible.
Make plans to improve your credit score
Your credit score is a hugely important factor in how lenders will end up assessing your eligibility for a home loan and the rate that goes with it. Work on clearing any credit card debt, paying all your bills on time, and not relying too heavily on available credit.
Try not to worry too much if you’ve had a couple of issues in the past. The Comprehensive Credit Reporting changes taking effect this year gives borrowers a bit more leeway when it comes to their credit report. Learn more about comprehensive credit reporting here.
Save up the largest deposit possible
Putting a large down payment on your mortgage will look great in the eyes of a lender. This is due to the fact that you become less of a risk to lenders, and you’ll be presented with some of the best mortgage rates on the market if you manage to save a 40% or higher deposit. We know that this might seem unrealistic for most people however it is beneficial to save as much as you can.
Research the best offers on the market
This may seem obvious, but the best home loan interest rates aren’t always the most visible ones on the market. Lenders are always going to want to broker a good deal with first-time buyers, so you shouldn’t settle for what your existing bank may offer you. Find out what their competitors have to say and then go back to them for a counter offer if you feel the need.
Make sure you don't fall for hidden fees
If you agree to a fantastic deal, you’ll probably be confident you’ve got one of the best home loan rates out there. Unfortunately, it doesn’t always work out that way. Some lenders will look to recoup costs lost on offering the best mortgage rates by adding in hidden fees. Carefully examine any contracts to reduce the risk of paying over the odds for your new home loan.
Once you’ve organised a great home loan rate, it’s worth considering how you plan to protect your ability to meet your mortgage repayments each month. ALI Group’s Loan Protection Plan covers you for a number of different serious medical conditions, involuntary unemployment and death. Get your quote here or alternatively for more information, speak to your local broker.
Loan Protection Plan is jointly issued by Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (Death, Terminal Illness, Living and Accidental Injury Benefits) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). It is distributed by Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSG 226403 (ALI). ALI receives commission for each policy sold. Any advice provided is of a general nature only and does not take into consideration your personal objectives, financial situation or needs. You should consider the Product Disclosure Statement when deciding if this product is appropriate for you.