MAKING NEWS

Fri, 29 August 2008
Choosing The Right Home Loan For You
The current home loan market in Australia is characterised by high interest rates. Official interest rates are at a 12 year high, and standard variable home loan rates are hovering around 9.6%. This means that Australian households are spending more of their income on mortgage repayments than ever.

The global credit crunch has also made it more expensive for banks to lend money to home buyers. The banks are finding it difficult to secure cheap funds, and this added expense is passed onto borrowers. The result is high interest rates that seem unlikely to substantially decrease in the near future.

Importance of comparing home loans

With high interest rates showing no signs of decreasing, getting the best home loan is more important than ever. The number of foreclosures continues to rise as home owners find it increasingly difficult to make their mortgage payments. Carefully researching all of your loan options can help prevent you from finding yourself in a dire situation.

Speaking with various lenders is a way to gather some of the basic information. However, lending institutions are businesses, so they're unlikely to tell you about the loans their competitors have to offer. They'll focus solely on the benefits of their institution's loans. It's up to you to find and review all the various types of loans that are available to you. Without doing independent research you won't get a complete picture of the market.

Another reason it's important is that there are numerous different types of home loans available. Each offers different terms and has its own pros and cons. These are a few of the most common home loans:

•Low doc

•First time home buyer

•Fixed rate

•Variable rate

•Honeymoon

•Split loans

Determining which type of home loan best suits your needs and finances is the best place to start. That way you can focus solely on the types that most appeal to you.

How to compare home loans online

For potential home buyers, a good place to begin your home loan research is on a financial product comparison site. These are sites that help you make side-by-side comparisons of the various home loans being offered. Mozo.com.au is one of the most comprehensive home loan comparison sites on the web. It provides you with comparisons, detailed descriptions, relevant news articles and a variety of financial tools and calculators.

Having all of the information in front of you is the easiest way to compare available home loans. Mozo.com.au returns search results based on criteria you select. You can shortlist home loans and compare rates, fees and features side-by-side.

In addition to comparing home loans, Mozo.com.au is a place to perform a lot of other home buying research as well. One rather unique feature is a set of user ratings and reviews on the loans featured on their website. Borrowers can glean a lot of valuable information from the honest feedback provided by people who have personal experience with a particular lender.

Given the state of Australia's home loan market, now is no time to make a hasty decision. Utilise the tools available to you by visiting a site such as Mozo to easily and efficiently perform home loan comparisons.

By: Mozo

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