So many loans, so little time. Get organised with our free home loan checklist
Choosing a home loan can be a difficult task as it can be hard to differentiate between products to decide which ones are suited to your needs. A home loan checklist is a way of recording the core features of each loan and compare them to one another to take the hassle out of a home loan decision.
Know that you're getting the right home loan rather than just going by emotion or with the same lender as your parents went with.
When should you use a home loan checklist?
Anytime you're getting a home loan, it can be helpful to use a home loan checklist to help you make a decision that suits your needs, including:
- buying your first home
- refinancing your existing mortgage
Using this checklist can also serve as a bit of a shortcut to avoid applying for loans which don't suit a particular property or circumstances.
You can download this checklist as a PDF here [Right Click and choose to "Save As"]
Things to look out for
- The rates for the variable and fixed rate portions of a split rate home loan
- Revert interest rates following an introductory period.
While it may be great to get a one year discount on a home loan, in the scheme of things, one year is a very small portion of what is often a 25 year home loan. Always remember to note the revert interest rate when comparing home loan products with these types of short-term offers
what is an interest rate type?
An interest rate type is whether the home loan is on a fixed or variable interest rate.
What is a comparison rate?
Comparison rates measure the interest rate including regular fees and establishment costs over the 25 year life of a $150,000 loan. Comparison rates are a handy indicator to help people compare home loans more easily.
Why is the minimum loan amount important?
People who have only small amounts with which they wish to finance must keep an eye on the minimum loan amount. For some products, a minimum loan amount can be as high as $150,000 to qualify for a loan.
Why is the maximum loan amount important?
Maximum loan amounts are important for people who are attempting to finance high-value properties. Some home loans have maximum amounts as low as $1 million.
What is the minimum loan term?
A minimum loan term is the shortest amount of time you can have a home loan under the normal conditions of the home loan product without triggering any additional fees for ending the home loan early.
What is the maximum loan term?
A maximum loan term is the longest period that a home loan can be repaid. A common maximum loan term length is 30 years, although some loans can be repaid over as long a period as 40 years for some home loan products.
What is a maximum LVR?
A maximum Loan-to-Value Ratio (LVR) is the highest percentage of a property value that is allowed to be borrowed. With a 80% LVR, borrowers come up with 20% of the property value on their own — often called a deposit.
What is a maximum insured LVR?
A maximum insured Loan-to-Value Ratio is the percentage of a property value that can be lent to a borrower if they use Lenders Mortgage Insurance (LMI). Commonly LMI needs to be used on LVRs above 80%.
What is a principal and interest loan repayment type?
This is a normal home loan whereby repayments are made on both the interest and the loan amount as well.
What is an interest-only repayment type loan?
Interest-only loan repayments is where only interest on the loan is serviced and none of the principal is repaid. Interest-only loans are popular with investors as regular repayments are less which helps reduce overhead costs in the short term.
What are common repayment frequencies?
Not all loans come with the same repayment frequency options. Repayments can commonly be paid weekly, fortnightly and monthly.
What are extra repayments?
Extra repayments are the flexibility to make additional repayments on a home loan. These can have minimum and maximum payment caps depending on the product. Calculate this amount with our extra repayment calculator
Extra repayments can be fee-free or they can attract a fee. Fixed loans often have a fee for additional repayments above a set amount per year.
What is a settlement fee?
A settlement fee is an administration fee which is payable when the lender pays the loan amount — often to a vendor or the existing lender when refinancing.
What is a full-doc loan?
Full-doc loans, shorthand for full-document, are normal home loans. These home loans suit people who are employed by businesses other than their own.
What is a low-doc loan?
Low-doc, or low-document home loans are a specialised home loan product for self-employed borrowers.
Once ou have downloaded the checklist - make sure you remember to compare your home loan options. Once you have filled in your checklist, you can then calculate any potential savings you may get with our comparison calculator.