mortgage broker, I always get to chat to people in the local community around Cronulla
about their home loan. After years in the business, I’ve discovered there are
numerous misconceptions and myths about mortgages and mortgage brokers that
keep coming up. So I’ve decided to address 8 of those here:
1. Mortgages are
set and forget. Wrong!
Lenders can move their variable mortgage rates at any time, so a loan that’s competitive today
might not be competitive in the future. As rates change and new mortgage products are released,
your once cheap home loan may now be expensive. It is important to have a
yearly check-up and as your local Yellow Broad Road mortgage broker, we can help
by doing the research for you.
2. It’s not worth refinancing if you have a ‘decent’ rate.
If you have a $350,000, 30-year loan with an interest rate of 5.24 per cent,
and you refinanced to a rate of 4.74, you would save $107 a month and $38,480
over the life of the loan. Think
of the possibilities in terms of your mortgage size as even a small decrease in
rates makes a large difference in the long run!
3. The Reserve Bank controls home
loan rates. The
RBA adjusts the cash rate from time to time but each lender sets their mortgage
rates independently of the RBA. This is why the official RBA cash rate is
always different to what is on offer for home loans.
4. I can’t refinance a fixed-rate loan.
Not true. You can refinance a fixed rate loan but you’ll be hit with a break
cost, which is compensation for the loss the bank will incur when you leave. As your local mortgage broker in
Cronulla, we can easily help you calculate these costs and see if the savings
from a lower rate are enough to warrant the break costs.
5. I want to use a
mortgage broker but what about the fees? Mortgage brokers are paid by the
lender, not by you. A mortgage broker finds you the best loan at the most
6. I’m too old to refinance my mortgage. Age
discrimination is illegal. A bank looks at your repayment ability, so they’re
looking at your income and the loan term. There is rarely someone a mortgage broker cannot help as
there are so many mortgages in the market designed for different people and
7. Many locals in Cronulla are self
employed or business owners and say they pay a higher mortgage rate because of
this. If you’re self-employed and can’t produce your tax returns,
you may be offered a low documentation loan which can have higher interest
rates. If your financials and tax returns are in order, you qualify for the
same rate as a regular PAYG employee.
8. Banks keep
secret files on my credit history. False!. All lenders use a credit reporting system
to check your history. Know what they know by finding out your history at www.mycreditfile.com.au.
nothing to lose by sitting down with your local mortgage broker and discussing
your options at Yellow Brick Road Cronulla. We will take a fresh look at your
situation and present your options. So come by our branch or give us a call