How do I compare Virgin Money home loans?

To make sure you find the right Virgin Money loan you need a clear idea of what you're looking for in a mortgage. These simple questions can help: Are you comfortable applying online or by phone? Because Virgin Money is an online lender you need to be comfortable completing the entire home loan process via the web (with phone and chat support). What do you need the loan for? If you're buying a home to live in you need an owner-occupier loan. Property investors need an investment loan. Virgin Money has both. Fixed or variable? Do you want the flexibility of a variable rate loan that could rise or fall at any time? Or are you happy to lock in a fixed rate for a certain period so you can forget about rate changes altogether? What features do you need? You have to decide whether you need features like a 100% offset account, the ability to make extra repayments and the option to split your rate.

What is home loan pre-approval?

Home loan pre-approval is an optional step in the application process that some lenders offer. Pre-approval means a lender has examined your savings, income and spending habits and has a rough idea of how much it could lend you. It's not the same as full loan approval and it's no guarantee that the lender will ultimately approve a full application. But it does allow borrowers to start looking for a home with more confidence and a clearer idea of their borrowing power.

Are there any risks going with a smaller lender?

Most Australian borrowers bank with one of the Big Four banks (Commbank, ANZ, Westpac and NAB). You might have some concerns about getting a loan from a smaller lender you've never heard of. But there's no reason to worry just because you've never heard of a lender before. In Australia, banks and lenders are regulated by the Australian Prudential Regulation Authority (APRA) or the Australian Securities and Investments Commission (ASIC) and must comply with the National Consumer Credit Protection Act.

Should I go with a fixed or variable rate?

Deciding between a fixed or variable rate depends on what you want from the loan. A variable rate loan can change at any time, either up or down. A variable rate usually offers more flexibility in how fast you can repay the loan and the cost of refinancing. A fixed rate loan offers total certainty about your rate, for the fixed period. This means it won't rise, costing you more. But if your lender starts lowering rates you won't benefit either. Refinancing a fixed rate loan means breaking the loan, because you've agreed to a specific rate. This means you may have to pay a fixed rate break fee.

Do I need a mortgage broker?

Mortgage brokers are home loan professionals who can help you find a suitable loan. A broker typically charges you no fee, because they receive a commission from your lender. Brokers are great if you are short on time or find the whole process of researching and applying for a home loan confusing. But you can definitely do it yourself and find a good loan. You may even find a better deal. That's because brokers don't compare loans from every lender in the market. They have access to a panel of loans and often don't have smaller online lenders in their panel.