Why You Should Get A Home Loan Health Check
What Is A Home Loan Health Check
A home loan health check or a mortgage health check is a review process that determines whether the home loan you have is best suited to your current financial situation and lifestyle. As circumstances and priorities can suddenly change, your original home loan and interest rate may not always be matched to your needs and requirements. Changes in circumstances can be a career switch to starting a family.
Why Should I Do Regular Home Loan Health Checks
New home loan and mortgage products are being introduced in the market as well as ever-changing rates. By having regular home loan health reviews, you are able to take advantage of educating yourself on each of their individual conditions and hopefully save money and receive additional benefits in the long run. You may be able to reap the benefits of less expenditure on interest rates, updating the frequency of your repayments, obtain a decreased interest rate that suits your current situation, negotiate better terms or transfer your loan to another lender.
How Does It Work
Home loan health checks take no more than 15-20 minutes to complete. You are required to provide documentation of your current repayment schedule and address to verify your current balance, and so we can give you an accurate indicative valuation of your home. Before enquiring for a home loan health check, ask yourself the following questions to better find a new loan that suits your requirements.
- Would you like to pay off your home loan faster?
- Are you planning any major purchases in the near future?
- Are you looking to save money on your home loan?
- Is your financial situation likely to change within a 12 month period?
- Are you struggling to meet your current commitments?
- Is your fixed-rate or interest-only home loan expiring soon?
- Are you happy with your bank or lender?
If you’ve answered yes to all of these questions, you may benefit from a home loan health check.
Benefits of a Home Loan Health Check
There are several existing benefits of getting regular home loan health checks. Read on to learn more about them:
- Pay off your home loan faster: Home loan health checks can open viable options to paying off your home loan faster and getting out of debt sooner. You can also pinpoint areas where you can build equity in your home that you can access later.
- Helps you upgrade your home: Home loan health checks can accurately determine how much equity you have on your property. If you’ve accrued enough equity, your property may have increased in value, allowing you to leverage the equity to finance a home extension or renovation, or even purchase a new investment property.
- Allows you access to home loan features: There are many features of home loans you may not even be aware of so it’s important to compare different types of loans to determine which features fit your needs the most. For example, an “offset account” will reduce the interest rate you pay on your mortgage for each month, while a redraw facility allows borrowers to access additional repayments that you make on a loan.
- Secure more competitive interest rates: Interests rates frequently change in Australia. A mortgage is probably the most significant financial decision made when purchasing a home, so if you’re not on top of yours, you may unknowingly be paying more than you need to.
- Helps you refinance your home: If you’re coming to the end of a fixed-rate term of your mortgage, then it’s essential to take some time to review what other home loan offers are available to you. You don’t want to find yourself rolling onto an interest rate that costs more than it should.
How to do a DIY home loan health check yourself
Before speaking to a professional mortgage broker, there are several tips you can take to better manage your mortgage. These include:
- Reviewing your interest rate every year
- Have your salary paid directly into your offset account
- Provide extra repayments to pay down your loan faster
- Have money in your offset account to maximise interest savings
- Avoid missing repayments by setting up automatic payments
Ask The Experts
While home loan health checks are a fantastic way to refinance your mortgage and reassess your finances, we don’t expect you to do all of the above yourself. Whatever questions you have relating to reviewing your mortgage, it’s always a good idea to contact a lender or your financial adviser. As experts, a mortgage broker or lender can provide you with the most appropriate advice when it comes to switching to another home loan that suits your requirements.
Don’t stay in the dark when conducting your next home loan health check. Obtain a second opinion with Rateseeker and we can help rectify the issue of an unhealthy mortgage. Our experienced team can ensure you’re maximising the ability to make the greatest repayments and at the best rate possible.
** General Advice Warning
The information provided on this website is general in nature only and it does not take into account your personal needs or circumstances into consideration. Before acting on any advice, you should consider whether the information is appropriate to your needs and where appropriate, seek professional advice in relation to legal, financial, taxation, mortgage or other advice.