Many professionals within the finance industry offer to provide a review of your current loans with terminology such as “Home Loan Health Check”, “Loan review”, or similar.
But what does this mean and what does it involve?
Ultimately the basis behind a review is to assess the current rate, terms and fees of your existing loan to assess if you can negotiate a more effective loan structure, whether your focus is to:
– Reduce your loan repayments
– Reduce the amount of interest or fees you pay
– Pay off your loan more quickly
Unfortunately with our busy lifestyles there are some ongoing payments, such as our loans, insurances and utilities that we just pay each month without ever reviewing to see if we can obtain better terms. For many of us our loan repayments are our biggest cost, and yet with the day to day pressures of life we never really review the terms to assess if there are more competitive options available.
Yet such a review could potentially save us thousands of dollars! Just consider a $350,000 loan in which the borrower’s interest rate is 0.50% p.a. more than could be achieved in the current market. The annual saving of improving the rate by 0.50% p.a. could be as much as $1,750!
Consider what the savings could be if the loan was greater than $350,000 or the improved interest rate was more than 0.50% p.a.! Maybe you could obtain a package with reduced bank fees as well!
What could our borrower do with the extra money? Could they:
– Go on a short holiday!
– Buy the entertainment system they have always wanted!
– Increase their repayments to pay off their loan sooner!
The best part of all is that by using a qualified loan specialist such as a Finance / Mortgage Broker you may be able to invest as little as an hour of your time to assess if you could save money on your loan, as the broker will do the research and comparison for you.
Of course your Finance / Mortgage Broker will require some basic information to do an assessment such as:
– A copy of your recent loan statement and/or 6 months transactions (showing your interest rate and repayments)
– Copies of recent payslips or other confirmation of your income
– A summary of your financial position (i.e. Assets & Liabilities, summary of income and expenses). Most brokers will have their standard ‘Fact Find’ document that you can complete to provide this information.
So the only question for most borrowers is “should I spend an hour of my time to investigate if I can save money on my mortgage?
If you would like to know more contact your local Loan / Mortgage Broker who can provide assistance in working through the options on offer and help you establish what will suit your personal circumstances.