In this article:
by Con Christie
As a mortgage broker, I always get to chat to people in the local community around Beverly Hills about their home loan. After years in the business, there are clearly numerous misconceptions and myths about mortgages and mortgage brokers that keep coming up. I would like to address 8 of those below.
- Mortgages are set and forget. Lenders can move their variable mortgage rates at any time, so a loan that’s competitive today might not be competitive in the future. As rates change and new mortgage products are released, your once cheap home loan may now be expensive. It is best to have a yearly check-up and as your local Yellow Broad Road mortgage broker, we can help by doing the research for you.
- It’s not worth refinancing if you have a ‘decent’ rate. If you have a $350,000, 30-year loan with an interest rate of 5.24 per cent, and you refinanced to a rate of 4.74, you would save $107 a month and $38,480 over the life of the loan. Think of the possibilities in terms of your mortgage size as even a small decrease in rates makes a large difference in the long run!
- The Reserve Bank controls home loan rates. The RBA adjusts the cash rate from time to time but each lender sets their mortgage rates independently of the RBA. This is why the official RBA cash rate is always different to what is on offer for home loans.
- I can’t refinance a fixed-rate loan. Not true. You can refinance a fixed rate loan but you’ll be hit with a break cost, which is compensation for the loss the bank will incur when you leave. As your local mortgage broker in the Beverly Hills area, we can easily do these sums for you and see if the savings from a lower rate are enough to warrant the break costs.
- I want to use a mortgage broker but what about the fees? Mortgage brokers are paid by the lender, not by you. A mortgage broker finds you the best loan at the most competitive rate.
- I’m too old to refinance my mortgage. Age discrimination is illegal. A bank looks at your repayment ability, so they’re looking at your income and the loan term. There is rarely someone a mortgage broker cannot help as there are so many mortgages in the market designed for different situations.
- Many locals in Beverly Hills are self employed or business owners and say they pay a higher mortgage rate because of this. If you’re self-employed and can’t produce your tax returns, you may be offered a low documentation loan which can have higher interest rates. If your financials and tax returns are in order, you qualify for the same rate as a regular PAYG employee.
- Banks keep secret files on my credit history. Wrong. All lenders use a credit reporting system to check your history. Know what they know by finding out your history at www.mycreditfile.com.au.
Con Christie’s Mortgage Advice:
There is really nothing you can lose by having an appointment with your local mortgage broker at Yellow Brick Road Beverly Hills. We will look at your situation and present your options. You only proceed if you will save money!
We have you covered on all stages of your property journey