Tell a friendGeneral Mortgage Education
General mortgage information includes a few quick tutorials that you should understand before taking out your mortgage. Additional information on general mortgage education can also be found at essentials.
Crucial mortgage topics - keep your eyes open
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Each of these tutorials will give you a foundation knowledge to make it easier for you to deal with your mortgage broker or lender without relying on blind faith - which can be a very costly mistake! If you have a question that's not covered here, please ask michael lee.
Compulsory Comparison Rate
Are you relying on the comparison rate? You need this tutorial if you don't know:- Lenders can manipulate the comparison rate to make loans appear more attractive
- The comparison rate is unlikely to reflect your effective rate
- A lower comparison rate can cost you more than a higher one
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Mortgage Offset
Do you want to repay your loan off faster ? You need this tutorial if you don't know:- That offset is not a feature
- How offset acts to reduce the cost and length of your mortgage
- The tricks lenders can use to to confuse you about offset
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Mortgage types
These are types of mortgages that are available to you. Each mortgage type will also have a range of mortgage options and features that may or may not be available for an individual lender and mortgage type combination.
Fixed rate mortgage
Are you considering a fixed rate mortgage for all or part of your loan? You need this tutorial if you don't know:- There is only one advantage to a fixed rate mortgage
- The 3 disadvantages to a fixed rate mortgage
- The rate you wind up on can be higher than the one you saw advertised
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Variable rate mortgage
Variable rate mortgages are the most popular in Australia.You need this tutorial if you don't know:- Standard variable is a benchmark, not a loan type
- The the difference between mobility and portability
- Who sets variable rates and how much each change affects you
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Line of credit mortgage
Are you thinking about taking out a line of credit.You need this tutorial if you don't know:- That lines of credit are mostly ineffective for debt reduction
- Why they will wind up costing you more
- Your borrowing capacity is reduced on two fronts for this loan type
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Mortgage options and features
Mortgage options and features cover a range of tutorials on different characteristics commonly available and often misunderstood.
Split rate mortgage
Are you thinking about taking out a part fixed part variable mortgage? You need this tutorial if you don't know:- The one real advantage that works in your favour
- That half fixed half variable protects the lender, not you
- Splitting creates two or more loans, contracts and sometimes fees
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Principle and interest repayments
This is the most common repayment type. You need this tutorial if you don't know:- What principle is
- Why this is the best type of repayment to pay your mortgage out faster
- How lenders can attack one of the main advantages of variable rates
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Interest only repayments
Have you thought about an interest only mortgage? You need this tutorial if you don't know:- Why an interest only loan costs you more, and how much extra that will be
- The one real benefit of interest only
- The two key disadvantages of an interest only option
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Offset account vs redraw vs all-in-one
If you haven't thought about interest saving features, you should! You need this tutorial if you don't know:- The basic interest saver may cost you more
- What the non-cash advantages are of each option
- Mortgages with offset accounts don't have to cost you extra
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