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How to find the right home loan

Are you looking for a better home loan, or one that will at least help you with repayments? There are plenty of exciting options right now and just as it's a buyers' market in many parts of the country, investors can also take advantage of some current deals available.

One of the Big Four banks has guaranteed to beat any advertised interest rate from its three major competitors. However, Jane Slack-Smith of Your Property Success warns investors should always read the terms and conditions before signing any new deal.

'They say they'll beat any advertised rate but many of my clients have actually been able to negotiate better than what's advertised at the moment,' she says.

Kristy Sheppard of Mortgage Choice says smaller banks shouldn't be forgotten either.

'Often they're fighting even harder for market share and sometimes they're more likely to offer affordable deals or better specials within their deals,' she says.

'If you already have a home loan and you're looking to switch, there are a range of switching options, where you can have up to $1000 paid by the lender you're looking to switch to.'

So how do you make sure you're getting the best possible deal? Mortgage Choice suggests the following top tips, which could save you thousands of dollars over the life of the loan.

• Approach lenders with the feeling that there are plenty of lenders and loan products out there. If one lender isn't going to give you the discount you want, simply move on.
• Meet the lending manager and negotiate with them face to face. Ask how they can match other deals. If they can't, move on.
• Do your research and know what different rates are available with different banks.
• Check the fees and features of loans, as well as rates.
• Be aware of upfront fees, annual package fees and redraw fees.
• Create a spreadsheet or checklist, allowing you to compare different loans available.

Sheppard advises to always approach a lender with your head held high.

'Because the housing market' is so subdued and housing finance commitments are at a 30-year low, lenders are really jostling to retain loans,” she says.

'It's a terrific market to be in, if you're looking for a new home loan.'

Ms Slack-Smith agrees but warns even though some rates are very attractive right now, investors shouldn't rush in to fix their rates. She says some markets are factoring in a 1.25% rate reduction.

'All the fixed rates now may not be cheap in 12 months' time,' she says.

Source: Australian Property Investor. 'How to find the right home loan'. 12 September 2011.