If you’re reading up about interest rates, comparison rates and honeymoon rates you are probably looking at purchasing or refinancing your home and perhaps you don’t have a mortgage broker yet, to explain these terms and guide you through the process.
You’re probably trying to establish the lowest interest rates at the moment and researching the differences between offset accounts and redraw facilities, and fixed interest rate loans vs variable rate loans.
May I assume, or at least suggest, that you compare the smaller credit unions with the big 4 banks. Don’t be hoodwinked into believing that it’s just the big banks that are offering low deposit home loans and promotional offers.
It’s a minefield out there, we know that. The trick is to keep things simple and reach out to a mortgage broker who can explain your choices and help you find a loan that suits your individual circumstances.
Ask your mortgage broker to answer questions that you may not have asked yet. The thing is, you can’t ask what you don’t know, so you really need expert advice and experience to preempt those questions and get the ball rolling.
One the of the areas that we really focus on when suggesting certain products, is your short term future plans and how these changes will impact your future borrowing opportunities. It’s one thing to suggest a honeymoon rate to a customer, but if you know that they are looking at starting a family and will perhaps either be decreasing their income, or increasing their expenses, we need to consider the likelihood of them being able to refinance when they really need to (like when the honeymoon rate expires) This issue could really bite them when they need it most.
Although I am yet to find a crystal ball that delivers my future dreams and goals, a little bit of future planning should be considered, so always discuss your short term goals.
What is a ‘honeymoon rate’?
This is a promotional offer by the lender, to lead you in. It is a discounted, introductory interest rate that applies to the initial term of your loan, but will revert to the higher standard interest rate once the initial honeymoon period expires.
If you need more information, or feel that it may be time to reach out to an experienced mortgage broker give us a call today 0409 715577.
Comments