Page 16 - Smartline eBook - First home buyer

What features do you need?
Many home loans come with additional features that, used well, can help you save money, protect your finances or pay off your home loan sooner. Here are some of the more common features you may want to consider when choosing a home loan.
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Redraw facility: This lets you make additional repayments into your home loan and then access those funds when you need them. Of course, if you withdraw money from your redraw facility, the amount owing on your loan will increase.
Offset account: This lets you “offset” the money you hold in your everyday account against your loan amount to reduce the amount of interest you’re charged. While this won’t reduce your repayments, it will mean you’ll pay your principal faster.
Repayment holidays: Many loans now come with the option of a repayment holiday. This happens when you arrange with your lender to have a break from repayments or to have your repayments reduced for a period of time. This could be for many reasons – maternity leave, change of career, or illness – it shouldn’t be used as a long-term solution for financial stress.
Should you use a mortgage adviser?
When you’re applying for a loan, it may be tempting just to speak to the financial institution you already bank with. But it usually pays to look around. The mortgage market is competitive and you may be able to get a much better rate by going elsewhere.
A good mortgage broker has access to more loan products than the general public, from a large number of lenders, and knows their lending application processes. This should save you time and money and give you the best chance of getting your mortgage when you need it.
They also should be able to advise you on which home loan is right for you given your own personal circumstances. Best of all, a mortgage broker won’t charge you anything. Instead, they generally receive a commission from the lender you choose to go with.
Find out more about the benefits of using a mortgage broker
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First home buyer guide