- Enticing honeymoon rates that revert to high interest rate after 12 months. Even though you may save a little in the first year, it could win up cost you thousands of dollars for the remaining term of your loan.
- Selecting a lender that does not provide the convenience of internet banking or ATM availability. This should come as standard with every loan; you may not need internet banking or ATM access right now, but it’s important to consider the features you may need in the future.
- Complicated fix rate rules. Most lenders allow you to pay up to a certain amount into your fixed rate loan. It is important to know that in most cases this is per 'fixed year' and not per 'calendar year' – meaning paying extra may incur penalties.
- Selecting a small lender that offers slightly lower rates, but that charges high transaction and account keeping fees. The cost of the transaction fees may outweigh the savings, so make sure you compare apples with apples.
- Delayed processing. If applying through a small lender, ensure that your regular repayments get credited to your account immediately and not after a few days. You lose money for every day that the processing is delayed,and I have seen this take up to three days in some cases.
Collections: Buying a home