Your Home Loan Comparison Checklist

A home loan comparison checklist is crucial for any person who is seriously considering purchasing a home.  There are many factors that you should consider when searching for your first home loan as well as factors to look for when you switch to a new home loan.

In this basic checklist guide you will learn about the different fees associated with home loans, comparing interest rates and even the different features that you should look out for in a home loan.

Comparing Home Loans

When you decide that it is time to find a new home loan to get the house of your dreams, the most important thing to do is to compare mortgages. You can always go down to your bank and apply for a home loan. Since it is your trusted bank, you may think that this is the best loan and the most convenient for you.

However, if you do not shop around for other home loans, then you do not know if this really is a good selection or not. When you compare different loans you can begin to compare their features. You can find home loan offerings at regular banks, mortgage brokers and independent lending institutions.

Once you find a few home loans that seem appealing to your situation then you should follow up and speak to the lender about the particular home loan that you are interested in.

You may discover that there are discounts on the home loan or other features that you were unaware of.

Lenders will also be able to explain the process of taking out a loan and answering questions and doubts that you may have. If the lender seems uninterested in your business or you are sceptical of this person, then it is better to cross the loan off your list and find another one. There are plenty of home loans out there after all.

Creating the Checklist

Let's say that you have narrowed down your loan search to three or four loans that could work for you. Creating a home loan checklist is the best way to see side by side what is being offered, what is not and which loan is the best for your needs.

You will have quite a list to make and research to do, so it is advisable that you take your time and dedicate a large chunk of your weekend to filling out this list. You should begin with the interest rates. Under the interest rate category, you should look out for the following characteristics:

• Offering variable interest rates
• Offering fixed interest rates
• Combined interest rates (variable and fixed)
• Introductory rates
• The comparison rate

Depending on which type of interest rates suit you more (and on the length of your loan), you may prefer a mortgage that offers variable rates over fixed rates, or vice versa.

The interest rate for the loan is extremely important, but you need to be aware that this should not be a determining factor.  This is because the fees that you may incur with a lower interest rate may end up becoming a larger expense than a home loan with a higher interest rate but without any fees at all.

Your next column should include the fees and charges that are associated with the home loans you are interested in. You should be on the look out for:

• Start up costs
• Ongoing monthly and or annual fees
• Redraw fees
• Early termination fees
• Discharge fees
• Administration fees

Finally, you should make a column for the different features that each loan offers. Some of these features may include making extra repayments at no-charge, redrawing payments and making weekly and bimonthly payments. Once you have filled out the entire home loan checklist, you will be able to easily navigate and compare the home loans at a glance