If you want to get into the property market there is a good chance that you will need to borrow money from a financial institution. I recently had to do this in order to finance the house and land that my wife and I recently purchased.
For many people the whole loans process can seem a bit daunting at first, particularly if you have never borrowed large sums of money before, but it is important to remember that there are plenty of options available when it comes to financing a new loan, and that there are professionals who are able to assist you if you don’t feel comfortable going it alone.
Where to Save Money?
One of the easiest ways to save money on new home loans is to select the most suitable home loan by shopping around with lenders. What I personally like to do, is to perform a quick comparison search online for the standard rates that most banks are offering. Once I have identified which ones are the cheapest, I then like to contact them and play them off against each other in order for them to get my business.
I followed this method recently when getting finance for our house and land, and it allowed me to finance my new loan at 4.6%, when the standard rate was over 5%. Sure it took a few days of going back and forwards with different credit companies, but in the long run I will save a heap of money. Check out the $60,000 saving below:
Another thing I managed to negotiate on was fees. Many financial institutions will include a number of hidden fees along with their base offering. Most people never challenge them, but simply asking the loans person if they would be willing to remove the fees is sometimes all you need to do. I managed to get my new loan setup with only a setup fee and no other fees for the life of the loan.
I have previously spoken about the power of making additional repayments here so I won’t go into detail about it now, but it is without a doubt the most powerful way for you to save money on your loan. Make sure you make the most of it.
Again, something else I have spoken about in the past, but that is equally important to consider is how often you make your repayments. Many people are unaware that by making payments weekly or fortnightly you are actually making an extra months worth of repayments every year. This can have a fairly big impact on just how quickly you are able to pay back your loan.