What to look out for in your mortgage agreement

Of course it’s considered good practice to read any agreement thoroughly before you sign it, and your home loan contract is no different. Even if you’re working with a broker who can help you understand the process and you’ve had the agreement read by an expert, you’d still do well to check the following points before signing against the dotted line.

1. The rate.
   The interest rate is undoubtedly one of the most significant aspects of your home loan, so it never hurts to make sure that the rate on the contract matches up with what has been agreed upon with the lender. Also, take the time to check if your rate is fixed or variable to avoid any nasty surprises in the unlikely scenario an error was missed.  
2. The amount.
   Any discrepancies in the amount your borrowing has the potential to cause you a lot of trouble when it comes to purchasing your new property, so it never hurts to ensure the numbers are accurate to your expectations. You should also be sure to check the total amount you’ll be paying over the life of the loan with interest taken into consideration.  
3. Repayment expectations.
   If you’re the type of borrower that would value the ability to repay your loan early if the opportunity arises, then you will want to make sure you’re aware of any additional fees that may arise from doing so. Some lenders will charge you early exit fees if you pay your loan off before the contract term has come to an end. Similarly, you should make sure you are aware of any charges associated with late repayments, as well as any penalties that you may incur. 
4. The loan term.
   The term of your loan will make a big difference in your repayments and the amount of interest you can expect to pay over the life of your loan. While you can always pay the loan off faster in the case of a longer loan term, as mentioned above, some lenders may penalise early repayments with additional fees or charges. 
5. The lender.
   Though you can expect to trust your broker to recommend only legitimate lenders, it never hurts to verify who you’re dealing with yourself. Checking your lender’s validity is simple – the ASIC professional registers will tell you all you need to know about the company you’re working with. 
6. The offer lapse date.
   No offer will last forever, and in the case of a mortgage agreement, you will typically have 30-40 days to review the offer before it need to be signed and returned to the lender.  If things are taking a little longer than expected, most lenders will allow you to extend this period, though asking for an extension works a great deal better when you make the request before the due date.
7. The special conditions.
   If your contract has any special conditions you must read and understand them thoroughly, as these may be non-typical and could sneak up on you in ways you aren’t expecting. Having a legal professional review the agreement will help protect you from any unfair additions to your contract. Still, even with this added layer of protection, you may come across something that is a deal-breaker for you.