Whether you're a first home buyer or a seasoned property investor, when it comes to buying property there will always be a number of different factors to consider before taking the plunge.
One of the most important aspects of property investment to consider is to organise your finances before your real estate search.
After all, taking out a home loan is likely to be an obligation you'll spend the next 20 to 30 years repaying. Taking the time to fully understand the different options available to you for this financial responsibility can help you to make the right decision for your future.
It is important to remember that not all home loans are the same and that, much like property buyers, each one is unique and better suited for different circumstances.
The first challenge is understanding the difference between the different types of home loan.
A fixed home loan means that the interest rate charged on your mortgage will remain consistent for a period of time. Usually reviewed every three to five years, this type of loan is perfect for those who are looking for stability and consistency in their repayments.
A fixed home loan rate traditionally offers less flexibility in exchange for peace of mind that your repayment amounts won't fluctuate, allowing you to budget your repayments ahead of time.
On the other hand, a variable home loan is affected by the market as a whole. Taking into account a variety of different factors, a variable mortgage monthly repayment amount can change.
These loans are more flexible than their fixed rate counterparts due to their relationship with the market, meaning that your repayment amounts can be lower in relation with the falling interest rate.
However, this also means that as the interest rate climbs, so do your repayments. Due to this flexibility, there are a number of different options available within your loan – such as the opportunity to make extra repayments, or access a line of credit.
It's paramount that you find the right home loan choice for your situation, so have a chat with a mortgage broker about options today.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.