After all the previous blogs, actually buying a house is easy, paying it off is hard. And getting the right kinda loan is as important as getting the right property. Back in the days when I got my first property in Boleh Land, I did not realize how to convenient it was to get a loan. They usually have a panel of mortgage booths there to help you. I just sign up with the cheapest one among them.
This round, man do I have to shop! I use a few comparison sites like ratecity and canstar to shortlist a few hot loan packages. Of course you must first put in your criteria. Know that every feature comes with a price and it's really finding a loan best for your circumstances and sometimes that might not be the cheapest loan.
Fixed, Variable or Semi Fixed
Fixed and semi fixed loan typically always attract a higher rate than variable. Like I said nothing comes free. Given that the whole world thinks the BLR is not going to increase in the next 5 years, choosing a full variable loan seems like the best option and I went with it.
Off Set and Repayments
Offset is only applicable if you are an owner occupier meaning NOT for investment. I am not sure if this is strictly a Koala feature. Essentially it is an account tied to your home loan and you make your repayments/extra repayments through it and the interest rate will be calculated from the remaining amount offsetting whatever that is in the Offset account - hence the name. DO NOTE, if you went to a non bank lender, your offset account might not be guarantee in the event of a liquidation. Check APRA. I went with loans.com.au which is an online non bank lender. It means the offset account is not guaranteed. Is that a bad thing? Well, to me it just means a different financial strategy altogether. Only time will tell if it is bad or good.
Other benefits
Some loan packages especially the bank ones come with savings/deposit accounts and visa/master card. They will package it in a way to entice you to bank with them by offering a lower rate. This is something that you need to evaluate if it is worth it. For me, I am not tempted by it because my savings is with a high interest account that I have no intention of switching and I have enough credit cards so I just want the loan - plain and simple.
Charges
Obviously you would want to go with a loan that has very minimal charges. Some have a minor on-going fee for offset and multiple repayments. Some have one time registration fee (typically bank loans). Some have discounted first year fee but regular fee there after. Some charges a break free cost, some don't. Read the fact find sheet well before deciding what fees you want to pay for what services. One of the best thing I like about loan.com is the zero charges except house evaluation cost which is compulsory - and I had to pay twice, sigh~!
As I mentioned, in the end I went with a non bank lender loans.com. Is it good? I would say the registration process and document upload is fantastic but towards the end, I am at constant constipated state due to them not managing to provide loan approval within the due date. However in the end they managed so all is well at the moment. Customer service is great and given the frequency that I called, I think I spoke to at least 3/4 of the staff. Loans.com has the lowest rate as they are online but it also means you are your own mortgage broker. You do your follow up which I did almost everyday. Like I said no free lunch in this world. Now I worry if they are able to settle within the allotted time. Need to pray hard!
Meanwhile look at my half furnished cabinets.... I am so excited already.
This round, man do I have to shop! I use a few comparison sites like ratecity and canstar to shortlist a few hot loan packages. Of course you must first put in your criteria. Know that every feature comes with a price and it's really finding a loan best for your circumstances and sometimes that might not be the cheapest loan.
Fixed, Variable or Semi Fixed
Fixed and semi fixed loan typically always attract a higher rate than variable. Like I said nothing comes free. Given that the whole world thinks the BLR is not going to increase in the next 5 years, choosing a full variable loan seems like the best option and I went with it.
Off Set and Repayments
Offset is only applicable if you are an owner occupier meaning NOT for investment. I am not sure if this is strictly a Koala feature. Essentially it is an account tied to your home loan and you make your repayments/extra repayments through it and the interest rate will be calculated from the remaining amount offsetting whatever that is in the Offset account - hence the name. DO NOTE, if you went to a non bank lender, your offset account might not be guarantee in the event of a liquidation. Check APRA. I went with loans.com.au which is an online non bank lender. It means the offset account is not guaranteed. Is that a bad thing? Well, to me it just means a different financial strategy altogether. Only time will tell if it is bad or good.
Other benefits
Some loan packages especially the bank ones come with savings/deposit accounts and visa/master card. They will package it in a way to entice you to bank with them by offering a lower rate. This is something that you need to evaluate if it is worth it. For me, I am not tempted by it because my savings is with a high interest account that I have no intention of switching and I have enough credit cards so I just want the loan - plain and simple.
Charges
Obviously you would want to go with a loan that has very minimal charges. Some have a minor on-going fee for offset and multiple repayments. Some have one time registration fee (typically bank loans). Some have discounted first year fee but regular fee there after. Some charges a break free cost, some don't. Read the fact find sheet well before deciding what fees you want to pay for what services. One of the best thing I like about loan.com is the zero charges except house evaluation cost which is compulsory - and I had to pay twice, sigh~!
As I mentioned, in the end I went with a non bank lender loans.com. Is it good? I would say the registration process and document upload is fantastic but towards the end, I am at constant constipated state due to them not managing to provide loan approval within the due date. However in the end they managed so all is well at the moment. Customer service is great and given the frequency that I called, I think I spoke to at least 3/4 of the staff. Loans.com has the lowest rate as they are online but it also means you are your own mortgage broker. You do your follow up which I did almost everyday. Like I said no free lunch in this world. Now I worry if they are able to settle within the allotted time. Need to pray hard!
Meanwhile look at my half furnished cabinets.... I am so excited already.
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