The terms and conditions of a loan may be just as important to certain borrowers as the interest rate.
When looking for home loan that offers the best interest rate, many people will enlist the services of a mortgage broker.
However, obtaining a loan with a better interest rate is only one side of the story. The terms and conditions that go with the loan can also be very important.
A mortgage broker such as Illawarra Home Loans also has the ability to source loan products from a large panel of lenders which can best suit their client’s specific needs.
Loan Agreements are complex documents and there are numerous terms and conditions which compose the loan contract.
As well as the interest clause there are also a number of other clauses which comprise the terms and conditions of the loan.
These terms and conditions include items such as the default interest clause. This is the interest rate payable on amounts which are not paid when they fall due.
The Prepayment clause can be important to certain borrowers as it allows them to repay the loan early thus making the loan more flexible.
Another condition of a Loan Agreement is whether it is repayable on demand or is only repayable at the end of a fixed term.
There are certain ‘Events of Default’ (events that brings the borrower into default) which can vary depending on the type of loan being entered into.
A Cross Default is a default on any other facilities provided by the lender to the borrower which will automatically cause a default under the Loan Agreement.
The ‘Breach of the Loan Agreement’ is whether any breach of a term of the Loan Agreement will automatically cause a default.
The ‘Non-Payment’ clause is whether the non-payment of either interest or capital automatically triggers a default. There should be a provision which includes a grace period to cover administrative difficulties.
The insolvency clause covers whether the borrower going into insolvency is an event of default.
In addition to the terms and conditions, several different types of fees can be involved in taking on a new mortgage or working with a new lender.
These can include items such as origination fees, application fees, and appraisal fees.
In some cases, Illawarra Home Loans may be able to get lenders to waive some of these fees which can potentially save their clients thousands of dollars.
An experienced broker such as Illawarra Home Loans is able to effectively negotiate the terms and conditions with credit providers on your behalf.
With over 30 years experience in the finance industry, Illawarra Home Loans have regular contact with a wide variety of lenders and will avoid certain lenders with onerous payment terms buried in their mortgage contracts.
Illawarra Home Loans has established a reputation as one of Australia’s most trusted mortgage brokers.
For competent advice and friendly service contact Illawarra Home Loans on 02 4226 5555 or visit their website at www.ihl.com.au.
(Illawarra Home Loans is a sister company of PCL Money)
Please note that the above is general financial information only and is not intended as personal financial advice for which you should contact a licensed financial professional.