So, you've bought your first or 10th home and all's right with the world and your mortgage - or is it?
We don't want to burst your property bubble but it does (literally) pay to regularly check the health of your home loan.
We know, we know - you've spent months researching a property to purchase, you've finally done bought it, and now we're asking you to go back and recheck everything?
Nope, fear not!
Home loan checks come further down the track when yes, you've got nice and comfy and would actually prefer to "set and forget" your mortgage deets.
Read on to find out more.
Why should I do home loan health checks?
Easy!
It could save you money.
New and competitive lenders and mortgage deals are constantly occurring, meaning more opportunities for you to enjoy more cash in your pocket.
Then there are rising interest rate changes, which are now hiking upwards after a 10-year fall, while perhaps most importantly right now, a new prime minister and new political party are leading the country.
All of these points, including changes to your familial or other significant details, can have a big effect on your mortgage.
Finally, if you're on a fixed-rate or guarantor loan or are considering an equity loan, you may essentially be forced to reconsider your mortgage choices even if you're not up for it.
What questions should I ask about my home loan?
Excellent question!
Both first-home buyers and owner-occupier home owners, as well as investors, should ask themselves the following:
What home loan features, fees and charges work for me and my circumstances?
What home loan features, fees and charges would I like to change?
Based on your position and perspective, here are a few basic points to consider, some of which are helpful just to ask yourself first before talking to a lender.
I'm a first-home buyer
Have I been able to easily repay my mortgage including interest rates and fees?
If not, do I need to make changes to my overall budget?
In day-to-day reality, does my loan give me the features I need?
If not, what features can I do without?
Are my current interest rates, fees and charges reasonable, compared to what's on offer elsewhere?
Am I happy with my lender's service and if not, what needs to change?
Has my property's value increased or decreased and if so, what is its loan-to-value ratio (LVR)?
And finally, these personal questions aren't crucial, but for property newbies, they can be highly helpful.
What have I achieved and learned financially, and actually, since buying my property?
What are my real estate goals and ambitions for the next 12-24 months?
I'm an owner-occupier home owner
Can I afford higher repayments and if so, is this possible with my current loan and lender?
Should I (and can I) switch from variable to fixed-rates or vice versa, or could a split loan suit me?
What are my plans for my property in the next 12-24 months, especially renovations and changes?
Has my property's value increased or decreased and if so, what is its loan-to-value ratio (LVR)?
I'm an investor
What is the current capital growth and rental income of my property, and has it increased or decreased recently?
Have the property, its suburb and surrounding areas changed markedly in recent years and if so, how will this affect the above point?
Does the property need major renovations or changes in the next 12-24 months?
How will all these points affect my home loan?
You may also want to consider the following points:
Are my tenants easy to deal or not?
Are my tenants leaving the property in the short term?
Am I satisfied with my property manager and their fees and charges?
How often should I do home loan health checks?
This is another un-easy question!
But as a general rule of thumb - and especially with so many real estate and overall national changes occurring at the moment - we suggest a short, home health look-see every 12 months.
At the very least, you should do home loan health checks every five years.
As we mentioned earlier, you may have to do this anyway if your fixed-rate or a similar, one-off mortgage deal expires.
In the meantime, definitely keep an eye on the Reserve Bank of Australia's (RBA)'s monthly cash rate announcements, which occur on the first Tuesday of every month, bar January.
