The comparison rate is the rate that helps you work

out the true cost of a loan.  It helps you assess

the interest rate plus most fees and charges relating

to the loan.  Using this to compare different lenders

and different loans is important and gives you a

much clearer view of which option is the best for

you.

The home loan industry is super competitive

so it’s worth asking what’s the best rate they

can offer you.  You may be able to negotiate

with your lender about the interest rate being

offered.  Additionally, sometimes lenders will

reduce or discount the application fee for first

home buyers or offer a honeymoon interest

rate for new applicants so ask if this applies.

Making sure you understand the different fees that

are not included in the comparison rate such as

Government and statutory fees, lenders mortgage

insurance or valuation  charges and event based

charges such as  redraw fees.  Whilst you may not be

plannin on redrawing on your loan, knowing what

you are up for in the future helps with your planning.

Different lenders have different requirements

here, so make  sure you ask for clarity around

exactly what they need from you  to consider

your application.  Ensuring you submit all the 

information will ensure they can process your

request quickly.  The most common

documentation includes proof of income, 

bank statements and any loan documents

from previous loans.   Be prepared as they

require a large amount of documentation. 

Making sure you understand the lenders

repayment schedule is key to ensuring you

have the funds available at the right time.  

Most lenders will offer monthly, fortnightly

or weekly repayments.  Be sure to check your

lenders repayment policy to ensure they match

with your earnings.

A default can be listed on your credit report

and will last for  five years.  It does highlight to

a lender that you have failed to pay a loan

back in the past and whilst they are wary of

this it doesn’t necessarily stop you from

getting loan.  The type of defaults that you

have, how old they are, if they are paid, the

total number of the dollar value of the defaults

are all taken into account my lenders.  It is best

to talk to your lender about this as some are

more flexible than others. 

Most loans incur additional fees.  Ask your

lender for a full list of the fees as you’ll need

to make sure you can pay these fees as well

as the loan. In addition, borrowers sometimes

charge fees for paying off a loan earlier,

particularly with fixed rate loans.  Make sure

you find out about any prepayment penalties

before you sign off on any loan.  You may not

be keen to pay a penalty if you pay off your loan early. 

Generally, lenders are willing to finance home

purchases of up to 95% if you have a very

strong employment and savings history.  Keep

in mind you may have to pay Lender

Mortgage Insurance if you are borrowing 95%

of the property’s value.  It may be a better idea

to keep  saving your deposit to avoid the

additional expense.

Whilst lenders don’t have to have a  membership of

a professional organization the ones that do,

operate under stricter guidelines than those who

don’t. If your lender is a member of the MFAA

or FBAA it indicates they meet some  exacting professional standards and gives you peace of

mind

This is a big decision, so before you settle on a

particular broker, you should challenge the lender

with this question.  Make sure you drill into the

detail behind their answer “What specific things

you make you better than another lender?”,

“What exactly do you do to deliver great service?”.