looking at house

Regardless if you’re a first-time homebuyer or an experienced one, finding home loans with the lowest rates is always a game-changer. Low rate home loans can reduce your monthly repayments and ultimately save you thousands of dollars in the long run.

Follow these simple tips below, and you can find yourself in possession of the lowest home loan rates around.

Put Down a Larger Deposit

A home loan deposit comprises the amount of money you initially shell out to own part of the house. When you give a larger home deposit, it means that you won’t have to borrow as much money. In turn, you can expect it to drive the rates down.

Although paying 50 per cent of your target property price is a great idea, it’s not a very realistic one. In hindsight, 20 per cent of the property’s value is the most doable and the minimum requirement for many lenders.

Some money lenders will accept lower deposits. However, they may require you to pay a Lender’s Insurance to protect themselves in case of home loan defaults and shortfalls.

Improve Your Credit Score

Credit scores are representations of a person’s creditworthiness in the eyes of lenders, banks, and other financial institutions. In simpler terms, it’s the score that predicts your likelihood of making on-time loan payments.

A credit score of 300 to 400 is fair and quite reasonable. But a higher credit score is always preferable. Don’t fret if you find your score lower than 300 because there are things you can do to improve that.

Paying off loans, not making new debts, and avoiding too many credit enquiries are some definite ways to improve your credit score. But even if you’re struggling with your credit score, some companies can help you with bad credit home loans.

Assess the Fees

Some home loan rates look very attractive at first glance, but you have to dig a little deeper to make sure that those are the best. Sometimes home loan rates are low but their fees might get you in the end.

There are instances when you’re required to pay application fees, settlement fees, and other additional costs. They may be one-time payments or recurring ones. Be vigilant. Take note of the charges and their terms, and consider them in your final decision.

Utilise Mortgage Calculators

Comparison mortgage calculators are useful tools in helping you make an informed decision on which home loan to take. They can also help you compare lender rates and the different products that they offer.

Mortgage loan calculators allow you to see your potential repayments based on the loan’s amount, terms, and interest rates. Some calculators can even guide you in determining the cost of buying a home instead of renting it.

Check the Loan’s Interest Terms

Before making your final decision, you have to check the home loan’s terms. A home loan can either have fixed-term or variable rates. Fixed-term rates are loans where you’ll pay a fixed rate until you settle the loan completely, while variable rate loans tend to fluctuate through the years.

Fixed rates may look more convincing, but variable rates have the potential to decline in the right market conditions. On the other hand, variable rates usually start lower than fixed rates, but they may also increase along the way.

To help you decide better, check your loan’s amortisation period. Loans with longer amortisation periods tend to feel the impact of changing interests more—for better or for worse.

Conclusion

A home loan is a great way for you to own a home without giving your bank account a shock. Putting down a larger deposit, improving your credit score, assessing the fees, using mortgage calculators, and checking the loan’s terms are some of the things you can do to secure home loans with the lowest rates.

Wealthy You provides some of the best home loans in Sydney. We offer a range of mortgage options to help you achieve your financial goals and requirements. Contact us today to learn more about how we can help you!

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