AN annual home loan review, paying extra and keeping your credit history in check are just some of the advice from the nation’s top mortgage brokers.
MoneysaverHQ has quizzed three of the largest mortgage broking firms and asked them for their best tips when paying off a loan.
The Reserve Bank of Australia kept the cash rate on hold at two per cent when they met this but borrowers should not be complacent.
Founder of Aussie Home Loans John Symond says it’s essential to map out a plan to slash your mortgage debt as quickly as possible.
“Work out ways that you can pay your loan off faster whether it’s using an offset account or paying fortnightly or weekly,’’ he says.
“People tend to go and look at refinancing or buying and borrowing and don’t think about the next five years — what if they start a family or lose an income (which could impact their ability to repay).”
Data from financial comparison website iSelect shows on a $300,000 30-year home loan the average variable rate is 4.35 per cent and the monthly repayments are $1493.
If a customer pays an additional $50 per week their monthly repayments would be $1710 and they would save nearly $60,000 in interest charges by paying the loan off six years and eight months early.
Mortgage Choice spokeswoman Jessica Darnbrough believes keeping a clean credit history is the best thing you can do regardless of whether you are a first homebuyer, refinancing, upgrading or an investor.
“Recent changes to the Privacy Act means a minor default on a telephone bill or a late gas payment could stop you from obtaining finance,’’ she says.
“It’s important for you to check whether or not you have multiple inquiries or defaults in your credit history before applying for a loan.”
To do this you can get a free copy of your credit file from places including mycreditfile.com.au.
However Australian Finance Group broker Ruan Burger says reviewing your home loan annually is the best thing you can do with the help of a broker.
“You need a good mortgage broker to help you re-evaluate your situation and we do that every 12 months,’’ he says.
“We do this because we want customers to know that whatever loan you have that it is suitable to your goals and needs.
“Too many times we get referred customers who haven’t reviewed their home loans for as long as three years.”