Choosing a cheap no deposit home loan that won’t cost you more than other no deposit home loans is a simple as picking the one with the lowest interest rate right?
Well maybe.. but there are many other factors and costs that can come into play and contribute to additional costs.
- Application fee is not a huge expense but can make a difference.
- Ongoing fees and account keeping charges can add up over time and contribute additional cost to your home loan.
- Early repayment fees and deferred establishment fees can have a considerable impact if you ever need to exit or refinance the home loan early.
- Mortgage insurance and risk fees can have a huge impact on the cost of your no deposit or low deposit home loan. We have seen differences in this area that would mean your home loan repayments would have to be $192.00 per week less to break even in a 12 month period. Once you choose your home loan type, eg fixed or variable, and then shortlist the most competitive lenders always check the mortgage insurance or risk fee cost.
- Free offers, televisions, holidays etc. shop around to find out how much that "freebie" would cost you to purchase it outright and deduct that cost from the total cost of the loan compared to other no deposit home loans to see if it is really free.
There are many aspects of a home loan in addition to interest that could contribute to additional cost and makes real comparisons difficult or almost impossible.
It is always a good idea to take the time to be aware of all the costs that will be and that could be encountered when choosing a home loan, especially a no deposit home loan.
Finance brokers have software packages and access to a wide range of lenders which makes the comparative process easier and less time consuming.
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