May 11, 2011
1. When applying for loan approval, it pays to remember that most lenders allow 30 to 40 percent of your total gross income to go towards debt repayment – including your home loan.
2. If you’re considering a variable or fixed rate loan, be aware you will be taking out two separate loans – one for the fixed amount and one for the variable – and that each loan attracts its own set of fees and conditions. Your lender may also charge fees every time you extend the fixed interest loan for an additional period.
3. If you plan to use savings sitting in your offset account for special purchases such as a holiday, you need to leave those funds sitting there until the last possible minute. If the money is paid into your home loan, you might as well consider it an extra repayment – or pay a fee of up to $600 in order to retrieve it.
4. Many lenders waive application fees if you are a shareholder. Purchasing just one measly share in your financial institution can easily be done online and can save you hundreds in upfront fees. Note: make sure you clarify the minimum number of shares required for fee exemption.
5. If your refinancing mortgage calculator is spitting out figures that involve thousands of dollars in up-front costs, check with your lender to see if these costs can be rolled into your new loan.
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