Choosing the Right Home Loan

With so many home loan products available, it’s often difficult to choose the best one. While mortgage brokers can help, there are several steps you can take yourself to ensure you get a good product.

As the lending industry has evolved, borrowers have had to deal with more complexity. Lenders now offer all sorts of home loans, many of which come with additional features bolted on. You also need to choose between different loan types. Options range from variable and fixed-rate loans to introductory and interest-only loans.

Borrowers need to understand what all of these terms mean so they can find the loans that best suit them.

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Get Started ### The Things You Should Consider

Many new borrowers make the mistake of only looking at the interest rate when applying for a home loan. While this rate is obviously important, there’s much more to consider when searching for a loan.

For example, loans with low interest rates might have high fees attached. Conversely, you may pay more interest for a loan with a lot of added features. This makes finding the right loan a balancing act. You need to set priorities and align your goals with the loan features.

Your loan must meet your personal needs, so figure out the structure before you start looking at lenders and rates.

Furthermore, your deposit will help to determine the type of home loan lenders offer you. You may pay Lender’s Mortgage Insurance (LMI) if your deposit is less than 20% of the home’s value. Some lenders waive LMI, but you may have to pay steeper fees or a higher interest rate in return.

Use your deposit as your starting point, then sift through the available loans to find a structure that suits you.

The Key Features

We mentioned loan features before, so let’s expand on that here. You must remember that not all home loan features will meet your needs. For example, there’s no point in having an offset account if you don’t have enough money saved to take full advantage of it.

Having said that, there are some loan features that most people can take advantage of. They include:The option to make early repayments

The option to make repayments through multiple channels. For example, many loans allow you to repay via the internet, telephone or using an ATM

Loan portability, allowing you to move your loan if you move house

The option to re-fix your interest rate so you can take advantage of the national interest rate.

Ultimately, the key features of the loan will depend on your circumstances. Speak to a home loan consultant to find out about the features that could benefit you.

Choosing a Lender

An attractive loan package may mean very little if you have an unresponsive lender. The service you receive must match the loan features.

Research any lender you consider before applying for a loan. Listen to people who’ve worked with the lender before and check the lender’s website to find out more.

You need to find a lender that communicates well after settlement and during the application period. For example, it’s worth finding out if the lender has customer service personnel in branches, or if you have to contact a call centre when you need help.

Loan Transparency

The best way to deal with the complexities of a home loan is to make it as transparent as possible. Learn about the loan and everything attached to it, rather than just looking at the interest rate.

The good news is that lenders must answer any questions you have about the loan. In addition to the fees that you know you have to pay, ask about any that you’ll probably have to pay. For example, many people refinance their loans at some point, which can involve multiple fees. Ask about all these fees, rather than focusing on one. Some lenders limit their explanations if you only ask about one term.

A few lenders waive their application fees to tempt customers. While this may seem attractive at first, ask about any hidden fees that might cover the cost that waiving the application fee places on the lender.

Despite this, you can find loans with good rates and low fees that also offer the flexibility you need later on. You just need to ask the right questions or work with a home loan consultant who can ask them for you.

How much can I save by refinancing?

Use UNO's calculator to estimate your savings.

Calculate Savings ### Using Comparison Rates

The government introduced comparison rates to offer consumers a more accurate idea of the cost of their home loans. The comparison rate pulls the loan interest rate and fees together, creating a percentage figure that’s often higher than the interest rate alone.

This makes them useful for understanding how much a loan will cost. For example, you may find that a loan with a high rate actually costs less than one with a low rate, once you take the other fees into account.

Unfortunately, comparison rates are not perfect. The calculation used for comparison rates is a set figure and loan term, which is unlikely to match your particular scenario.

This means the comparison rate alone isn’t enough to tell you what you’re getting. You need to understand every aspect of the loan’s structure.

Can a Mortgage Broker Help?

Mortgage brokers can help you to sift through the information if you’re unsure about what you’re looking at. Brokers also have access to many loan products and can offer specific advice for your personal situation.

However, you must choose the right broker. Be wary of any brokers who work with a small number of loan companies, as this means they don’t offer the variety you need to find the best home loan.

Also, check that the broker has registered with the Australian Securities and Investments Commission.

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What our customers are saying

June 21, 2024
I only have praise from my Uno experience! I was a broker sceptic, having done all of the hard work myself for my first two property purchases and sale. I'm now a proud broker advocate having used UNO (Karis Churchill) for two refinances and purchase. The value add Karis brought cannot be underrated! Not only has Karis got me the best rate, with a bonus cash back (nearly unheard of in this climate), she has done it with the least back-a-forth and with the least administrative burden on me (the thing that can deters people from refinancing to begin with). Karis is always on top of everything. Karis knows her stuff. She is the most responsive of any professional service provider I've ever used (my banker never text with an update at 7pm on a Sunday) without being overbearing. You know she's got your back and in my experience the value speaks for itself. Thank you to the whole UNO team, thank you especially to Karis.
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Leanda Cawdry
June 8, 2024
Very pleased with the outcome of this process, Michael Parsons and his team at UNO were helpful, communicative, and took all the stress out of the process of finding me a refinance deal that met my needs. Would definitely recommend Michael and UNO, and I already have!
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Glen Matthews
May 29, 2024
Regarding UNO Home Loan services. I had great experience with uno home loans, Michael parsons was my broker for UNO Home Loans we had excellent communication throughout the whole home loan application. If I had any questions on home loan application which were many were answered in great detail. He had the time to assist me in filling out endless application forms at anytime through the day or night which made the application process stress free. So I would strongly recommend Michael parsons from UNO Home Loans to try his services you will not be disappointed. Thanks to Michael parsons I have the lowest home loan interest rate I could ever hope for which I particularly ask for. It’s was a pleasure working with him. And will be using his services in the near future.
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Gillian Anderson
May 28, 2024
Thank you to Michael and UNO for their help in securing our home loan. I like the way they break everything down in simple terms to ensure that you can make the right decision. Michael was polite and very patient to help us get things across the line. We are now sitting in our first home away from rental circus. Can't recommend them enough. Thanks Michael and thanks UNO
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Andy Song
May 17, 2024
Amy has been absolutely wonderful as a broker. I would not hesitate one bit in recommending her services.
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Troy H
May 13, 2024
Scott Wilkinson did a great job as my broker. He was very patient and always happy to answer my numerous questions throughout the considerable period of time that it took to secure a suitable property. Would certainly recommend Scott and the team at UNO for anyone seeking a broker.
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Elvin Singh
May 10, 2024
First time I have used a Broker and I must say Andrew Wyers and his team were amazing to work with and handled my refinance from a Big4 bank. He was able to understand my needs and find a lender that will be able to help me grow my investment portfolio. Andrew and his team kept me updated as part of my refinance journey and made the process super easy and I was able to refi to new lender in under 2 weeks. Would highly recommend Andrew.
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Nadine Steffens
April 19, 2024
Scott and the team at Uno are absolutely 💯 amazing. I don't think I could have done my loan on my own. They are highly motivated and I do recommend them.
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April 16, 2024
Dealing with Scott Wilkinson was an absolute delight. Scott is tenacious, hard working and readily available. He made a very stressful process for me and my partner smooth sailing. Would highly recommend.
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Liam Sugiono
April 15, 2024
Amy and her team were efficient and knowledgeable as our broker. They were easily contactable and ensured all our needs were met.
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Mike Vincent
April 10, 2024
Andrew is the best broker I have worked with and one of the few people who understands the investment journey from both a personal and professional standpoint. Andrew is an asset to anyone from a first home buyer to a seasoned investor.
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Yu Su
April 9, 2024
Amy was very help and quick respond when I have questions. Really recommended.
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