mortgage broker, I always get to chat to people in the local community in
Toongabbie about their home loan. After years in the business, there are
clearly numerous misconceptions and myths about mortgages and mortgage brokers
that keep coming up. I would like to address 8 of those below.
1. Mortgages are
set and forget. 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 competitive home loan might not be anymore.
So, it is best to have a yearly check-up and as your local Yellow Brick 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%, 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 to your savings!
3. The Reserve Bank controls home
loan rates. The
RBA adjusts the cash rate from time to time but each lender sets their own
mortgage rates independently. This is why the official RBA cash rate is always
different to what is on offer for home loans. Our experienced mortgage
brokers at Yellow Brick Road Toongabbie take the time to analyse these
differences and ultimately get you the best deal on your home loan.
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
the Toongabbie area, we can easily do these sums for you 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 situations.
Many locals in Toongabbie 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. Wrong. All lenders use a credit reporting
system to check your history. Know what they know by finding out your history
Sundaranathan’s Mortgage Advice:
is really nothing you can lose by having an appointment with your local
mortgage broker at Yellow Brick Road Toongabbie. We will look at your situation
and present your options. You only proceed if you will save money!