It can be easy to become accustomed to your property debt, but too many investors become complacent and aren’t making the most of their money.
Blogger: Warren Dworcan, managing director, Rate Detective Finance
Investing in property can put you on the right path to financial independence but done wrong and it can set you back significantly. I have put together a list of mortgage mistakes we see on a regular basis which can be easily avoided:
1.Taking advice from unqualified people
Would you trust the advice of someone who watches medical drama about your health? Most likely the answer is no, you would see an expert. The same applies to your home loan. You should seek the knowledge of a broker. They have an in-depth understanding of the market and can find the mortgage that is not only right for you now but also in the future.
2. Too many loan enquiries
Shopping around should be part of the finance process but what you may not know is that every time you do so a note is made in your credit file. Too many and banks may think you are desperate and therefore a risk.
3. Staying with the one lender
The old adage of not putting all your eggs in one basket also rings true for property finance. While it may appear to make sense to keep all your loans with one lender, cross-collateralisation can have severe consequences for your strategy. You are essentially giving the lender control over your portfolio and restricting future purchases by not being able to access equity from your individual properties.
4. Focusing only on interest rate
Many investors search for finance purely by rate and not what is most suitable. A low rate may look more affordable but if you include the fees and ongoing costs it may well end up more expensive in the long run. Different products have a range of features, some of which may be advantageous and result in savings.
5. Not reviewing regularly
Once you have finance it shouldn’t be one of those things you set and forget about. A mortgage is a long-term commitment and not only are new products constantly being entered into the market but your circumstances may change. If you want to save or make your repayments more flexible it is suggested you speak to a mortgage broker every couple of years to discuss refinancing.
About the Blogger
Warren Dworcan is the Managing Director of Rate Detective Finance, which provides information to consumers about home loans, credit cards, personal loans and personal insurance.
Successfully assisting thousands of Australians with loan enquiries in excess of more than $1 billion, Warren alongside his highly qualified and dedicated staff are equipped to deal with all aspects and complexities associated with the mortgage market.
Over the last two years Warren has been dedicated to growing the business into becoming one of the leading independent brokerages in Australia.
Recently recognised as one of the top brokers in Australia, Warren was awarded the coveted Australian Broker of the Year award in both 2012 and 2013 at the Australian Broking Awards in Sydney.