Getting the right mortgage is important in your needs and in saving much in the long run. With the various products and rates from a lot of financial institutions, how would you know which one to choose? You may ask help from a financial advisor or try out the following steps:

Purpose and requirements of the loan

What do you need the loan for? To purchase a home or for investment purposes? You will need a home loan or a residential investment loan, respectively. Next is to figure out the type of loan you need that will fit your needs. Do you need flexibility of terms to save on interest payments or do you want a fixed or variable interest rate? Would you need a credit facility on your account of personal purchases or for home improvements? How long do you want to pay off your loan and on what terms?

Loan Features

Know what each loan product offers and compare according to what you need and you think is important for you. Banks may allow you to divide your loan into several small types to be able to save on interest payments as loans for investment purposes have interests that can be converted into tax deductions. The following is a list of typical features of loan products:

Additional repayments : Paying off more than your monthly payment to lessen then length of time of your loan and save on interest payments.

Portability : When you decide to change houses, this feature allows you to keep the same loan for a small fee to avoid more hassle of applying for a new one. 

Redraw : Permits you to get any additional repayments you have made if needed.

Credit facility : A feature within your loan that allows you to get some case for renovations and other personal purchases instead of getting a separate loan. This increases the credit limit of your existing loan and is subject to approval from the bank. 

Repayment holiday : When you give additional repayments on your loan account, you are allowed to skip making monthly payments for as long as the accumulated amount in your account is sufficient to cover it temporarily.

Parental Leave : Allows you to reduce monthly payments by as much as 50% although there are conditions to be applied.

Mortgage offset : Links your transaction account with your mortgage, allowing you to lower down your mortgage for every dollar in the account.

Income to loan account: When your income is directly deposited into your loan account, you save on interest from your mortgage and at the same time be able to access your cash or pay bills through automatic transfer accounts.

Consolidation of accounts : One account for all your transactions, savings, and credits to save on mortgage interests as well as still having access to your funds.

Refix: Permits you to change your fixed loan rate after the period of your previous fixed rate is finished.

Long term expenses : Give priority over the preferred features of your loan and compute the costs you will incur in the long run. Maximizing the features of the loan that you will choose can make you save more in expenses and interest rates. Your loan will all depend on how you handle your finances and lifestyle that will affect your ability to pay off your loan.

Word of Advice: Mortgage literally means an agreement until death, with the root word mort from the French meaning death. Since a mortgage is used to guarantee to repay a loan for a property, take the time to review its terms and conditions or end up paying for it till the end.