CHOOSING THE RIGHT LOAN
Buying a home is the most important purchase that many people will make. It is therefore just as important to put the same care into choosing the right loan product as you put into choosing the right home. Generally home loans are referred to as mortgages because the lender takes a freehold or property mortgage over your home as security for the loan.
Whilst choosing right is an important decision it is also important to remember that as your circumstances change so will the loan that you have on your property. Albeit that this is not a regular occurrence it is possible to change your loan as and when necessary. In fact some industry experts claim that people change their loans as much as ever three to five years.
The following information should always be sought when searching for and considering what is the most appropriate loan for your long term needs. SportzMortgage recommend that customers should get as much information as they possible can by asking for details on: -
- terms and conditions of loan packaging in writing
- establish what the loan repayment projections are for the life of the loan
- get projections based on different situations, for example
- high start-up repayments reducing later
- interest only as opposed to principle and interest repayments
- repayment frequency (fortnightly, monthly, quarterly, etc), or
- fixed interest rate as opposed to variable interest rate.
The market has a wide range of loan products catering for a variety situations and circumstances. All have particular benefits and features that you will find attractive. Consumer Affairs Victoria has produced a comprehensive publication
After the leg work is done and full approval is issued (letter confirming details) loan documentation will be issued for you to sign. We encourage people to have these documents read by a solicitor or trusted advisor. If you are unsure of anything in the contract, ask your advisor, or SportzMortgage representative for clarification. The best advice is to get independent advice.
Each credit contract and pre-contractual statement should include all relevant information including the amount of credit to be provided, the annual percentage rate/s, how the interest will be calculated and when it will be charged, the total amount of interest if the contract is paid out, credit fees and charges, how changes will be advised, default rate of interest, frequency of account statements, relevant commission charges, mortgage guarantee insurance and details of credit-related insurance financed under the contract.
After the contract is signed, the lender is required to give you a copy of the signed contract. The lender should also provide regular account statements that include:
- the date the statement period begins and ends
- the opening and closing balances
- the amount of credit provided during the statement period
- payment transfers to and from other accounts
- all fees and charges made to the account
- interest charged, including when they were charged
- the annual percentage rate, including any changes during the statement period
- minimum payments owed and the due date
- insurance payments made, the name of the insurer and any commission paid, and
- any corrections to previous accounts.
If you require further assistance or any information about credit, you can call
Consumer Affairs Victoria on: 1300 55 81 81or Country callers: 1800 80 38 00
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Member of the Mortgage & Finance Association of Australia