Which Bank Is Best For My Home Loan?
Which Bank Is Best For Your Home Loan?
While this is an excellent question to ask, I think that you will find a better way of posing it, is – “Which bank would be best for my family and I”. The short version of the answer is not simple, and to be wary of anyone saying that this is the best option for you. There is currently a big debate going on in the finance industry about the use of the word ‘best’, in anything mortgage or finance related. The reason being that a person’s situation with regards to their life has many different factors at play all at once.
With the number of different lenders in Australia, that means there are thousands of loans that a client could choose. Each of those products having their own strengths and weaknesses in different areas. You might find a few that are the same, it is more the exception than the rule.
So for anyone to say that they found you the best home loan or mortgage is a tall order and probably not true. It may have been the best home loan with regards to interest rate… but did it consider that you would want to buy an investment property in a year? Or that your partner would be starting that business you were pondering at the time? An outrageous example I know, but knowing how litigious Australia is, I am sure you see what I am alluding to.
You may ask the question ‘If it’s not the best loan or mortgage out there, where are we going with this article?’.
As a client what you are looking for is a loan that will suit your needs and will get as close to ‘best’ as you can. I will highlight the things you should be focusing on when it comes to finding a home for your mortgage. The first thing would be to find a great mortgage broker to help you through the process. The next would be to make sure you are thinking about the following things when deciding on a home loan, Adelaide.
Short Term Goals
This may sometimes be the overriding factor for choosing your mortgage. “What Do I Need Now?”. You might need a bigger home to accommodate an addition to your family. When looking at a mortgage, there are usually limiting factors for the new finance.
The main two factors are either income to service the loan, and the other is the equity or deposit to afford the purchase or refinance. The Lender and loan that you choose should be geared to address these issues. There is a myriad of other factors that also must be considered with the points mentioned above — for instance, a bad credit history, still on probation at work or large acreage property.
A good broker or lending representative should be able to highlight what your main obstacles are to overcome and find a suitable loan to pair you with. You as a client must check if you are fulfilling your short-term requirements of what needs to be achieved now.
Looking At The Big Picture
Next, you need to broaden the scope to your long-term requirements. Your immediate needs may have narrowed down the field of options for you to a few different products to choose from, and your long-term goals will hopefully be what narrows these down further. Are you looking at paying the loan off as quickly as possible, do you want stability in knowing your repayment will not change. Maybe you want to buy more investment properties or have an offset split account to save for your daughter’s wedding that is coming up in the next few years.
As you can see, the number of different scenarios that life can throw up is never-ending. To be able to plan for everything is impossible. I suppose the crux of it is to have at least had a good think about it. Hopefully, that will enable you to anticipate what might happen in the future.
Look At All Your Options
Lastly, it is essential to have a trustworthy person helping you in the process. One of the topics being wrestled with for brokers is a “best interest duty” for the client. The above was one of the issues that needed to be addressed out of the Royal Banking Commission.
That means that the broker is trying their best to make sure that the loan they are placing you with has your best interests at heart. At present with all complaints to AFCA with regards to finance. Mortgage brokers make up 0.05% of that. For me, that would indicate that we are doing a fair job of it already.
You may want to excuse my bias, but I think that it may be hard for the same to be said for a bank representative, who has far fewer options to fit your scenario, and who may or may not need to meet a target. The point above is purely my opinion, though.
Finding The Right Mortgage Broker
If you have someone on your side helping you navigate all your options out there the chances of you making the right choice is that much better. If life changes though, as it always inevitably does, you may need to refinance down the track or change your strategy. Here again, if you had a person that already knew your circumstances from the last time you financed and had walked the path with you, and could way up the new variables with you. You would be in a much stronger position to make the next decision.
At Castle Mortgages, we aim to make you a client for life. How we hope to do that is to keep your best interests at heart, and the rest will follow.
If you need a Home Loan In Adelaide, or need a trusted finance broker, get in touch, we would love to chat.
Written By Nolan Parodi