Getting a ‘mortgage’ can be a scary thought, but there are plenty of options and resources to help you make the right decision that works for you. Here are some quick tips and our go-to resources to help you on your journey.

• Shop around for the best home loan – you’re under no obligation to go with your regular bank.
• Negotiate – for example, another bank may offer a better rate on the condition that you switch your everyday and savings accounts to them.
• Mortgage brokers deal with a number of lenders, so they can save you time shopping around.
• Don’t over-commit – that 95% loan may sound great, until you come to pay it off.
• Make your repayments as high as you can afford – the sooner you pay off your mortgage, the less you’ll pay in interest.
• Beware of ‘revolving credit’ – your home is not an ATM! – this type of loan requires a lot of discipline.

Where to get a home loan

You can get a home loan directly from a bank or through a mortgage broker. Both have their advantages and disadvantages.

Home loans are also available from ‘non-bank lenders’ such as building societies, finance and insurance companies, trustee companies and credit unions.

‘Non-conforming lenders’ are an option if you are unable to get a bank loan, due to a bad credit history or lack of proof of income. These lenders usually only accept applications through mortgage brokers.

Banks

Advantages:

• Banks offer a wide range of home loan options.
• Competition between banks can sometimes lead to great deals, such as a bank contributing to your legal bills, discounting your insurance or lending at a low fixed interest rate.
• Banks can offer discounts on your day-to-day banking costs or even waive your transaction fees altogether if you have your home loan with them.
• Their loan application fees are usually negotiable.
• If you have a dispute, you can go to the Banking Ombudsman.

Disadvantages:

• Banks tend to be more cautious and are more likely to turn you down if you don't have a good credit history.

Mortgage brokers

Brokers deal with a number of lenders, so they can save you time shopping around.

Advantages:

• It is no more expensive for you than approaching the lenders direct. You don't pay directly for their services - they are paid a commission by the lenders they use.
• Brokers know the interest rates and application criteria for different lenders, and can negotiate on your behalf.
• They can help you put your loan application together.
• They may be able to help you find a loan if a bank has turned you down and may be able to get you a better deal than if you went direct.
• All mortgage brokers are now required to be Registered Financial Advisers.

Disadvantages:

• Brokers don't cover all lenders. Some banks don't deal with brokers, for example.
• Different lenders pay different commission rates.

Check out our blog on what you should check up on in your property before buying.