Always Choose Your Home Loan Product Wisely.
There are so many different types of home loan out there; choosing the terms of your mortgage can be very confusing. In the present climate we are all anxious to make the correct decision or it could cost us a lot of money. Clearly it depends a lot on your individual circumstances. If you have bad credit then things will be different for you than if you just want to release a bit of equity. Debt consolidation needs a different approach, of course, than a first home buyer. It is important that you know which is the best way forward for you.
A fixed rate home loan may appeal to you for your mortgage. Essentially this means that for a certain period of time your repayments on the loan will always be the same. In other words the interest rate on your home loan will not vary. This has got to take a lot of worry out of things for you. You can choose to fix the loan period for between one and five years and no matter what happens your monthly repayments will not rise. This could be the home loan product for you. There are a few things to take into account though. No one can predict with certainty what the market is going to do. It is possible that interest rates will go up and your fixed rate home loan will save you a lot of money. It is also entirely possible that interest rates will go down and in real terms your fixed rate may have cost you money. It is good to have the peace of mind though.
Another option that you have is the variable rate home loan. This is pretty much the opposite of the fixed rate loan. In other words it follows the national interest rate. If the rate goes down so do your monthly payments, if it goes up then your monthly repayments will too. It is important to note that these fluctuations can be quite profound. Again, it is impossible to accurately predict what will happen in the economy. If you have some room in your monthly budget it may be worth taking the risk on this type of loan.
Variable home loans, just to make things more complicated, come in two different types. A basic version that is pretty much a no frills bottom line, mortgage. Traditionally these are taken out by first home loan buyers who want to get into their first house as soon as possible. They often run at up to half a percent below the national interest rate.
The second type is called a standard variable rate. This is the most widespread form of home loan and it contains features that are useful such as a redraw facility and phone banking. This type allows you to make extra repayments without penalty which can be a very useful thing.
If all of this seems too confusing without further explanation then you need to discuss with the experts. The people DirectMoney Home Loans would love to help you, it is, after all their job.
A fixed rate home loan may appeal to you for your mortgage. Essentially this means that for a certain period of time your repayments on the loan will always be the same. In other words the interest rate on your home loan will not vary. This has got to take a lot of worry out of things for you. You can choose to fix the loan period for between one and five years and no matter what happens your monthly repayments will not rise. This could be the home loan product for you. There are a few things to take into account though. No one can predict with certainty what the market is going to do. It is possible that interest rates will go up and your fixed rate home loan will save you a lot of money. It is also entirely possible that interest rates will go down and in real terms your fixed rate may have cost you money. It is good to have the peace of mind though.
Another option that you have is the variable rate home loan. This is pretty much the opposite of the fixed rate loan. In other words it follows the national interest rate. If the rate goes down so do your monthly payments, if it goes up then your monthly repayments will too. It is important to note that these fluctuations can be quite profound. Again, it is impossible to accurately predict what will happen in the economy. If you have some room in your monthly budget it may be worth taking the risk on this type of loan.
Variable home loans, just to make things more complicated, come in two different types. A basic version that is pretty much a no frills bottom line, mortgage. Traditionally these are taken out by first home loan buyers who want to get into their first house as soon as possible. They often run at up to half a percent below the national interest rate.
The second type is called a standard variable rate. This is the most widespread form of home loan and it contains features that are useful such as a redraw facility and phone banking. This type allows you to make extra repayments without penalty which can be a very useful thing.
If all of this seems too confusing without further explanation then you need to discuss with the experts. The people DirectMoney Home Loans would love to help you, it is, after all their job.
About the Author:
Guy Baldwin is a director of the website http://www.directmoneyhomeloans.com.au. If you'd like to get assistance contact Directmoney at 1300 882 432 and get the best low rate home loans for you, and their services are free of charge.
posted by Credit Counseling at
5:41 PM
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