Financial change could prompt a loan change
Investors that undergo changes in their financial situation, from getting married and starting a family to changing a job, should take this as a sign to take a good look at their home loan, according to Australia’s largest independently owned mortgage broker.
Australians undergoing changes in their life should give their mortgage a health-check, explained Mortgage Choice, as investors’ needs with their home loan tend to change as their lifestyle alters.
“A number of major lifestyle changes are certainly not going to stand in the way of many achieving their dream of outright home ownership, so it makes sense that today's home loan products are as flexible as the lifestyles we lead,” said Mortgage Choice spokesperson Belinda Williamson.
"Home loan products are built to withstand all kinds of borrowers' major lifestyle changes, such as getting married, starting or growing a family, moving up the career ladder and retiring,” Ms Williamson said.
Having the flexibility to tailor a loan to an investor’s lifestyle and needs means that the features of different products can be used to full advantage.
Ms Williamson explained that investors looking to lower their loan repayments for when they are having a baby should consider an interest-only loan.
"Conversely, a borrower who gains a promotion may decide to contribute extra funds to an offset account attached to their loan, which will help to reduce the overall interest payable and to ensure funds are stocked up in case of times of need,” she said.
"The home loan options available are a far cry away from a couple of decades ago when loans were basic finance products over a 30 year loan term, there were few lenders to choose from and no mortgage brokers to help them through the process, and borrowers had limited repayment options."
Mortgage Choice’s top tips for investors undergoing financial changes are to keep the lender involved and let them know of your decisions and changes, consider fixed rate loans if you need certainty, build a buffer and put all repayments into one loan.