Whether you’re a first time buyer, refinancing or downsizing your home, there’s more to consider when choosing the best mortgage lender than just the interest rate. A mortgage broker can help you to understand your options and guide you along your home buying journey.
Taking out a mortgage is the biggest financial commitment most Australians make, so it pays to get it right. Read this quick guide to find out why expert mortgage advice is important and what questions to ask your local mortgage broker in Maroochydore.
A mortgage broker is a professional whose role is to help home buyers and mortgage borrowers find the best deal on their new home loan. They have arrangements with a number of mortgage lenders, from large banks to online lenders, and will help to guide you through the process.
Your mortgage broker will consider your individual needs when recommending mortgages for first time buyers, borrowers with a low credit rating and other unusual circumstances. Mortgage brokers in Australia are required by law to act in the best interests of borrowers and will only recommend loan options they believe are right for you.
Talking to a mortgage broker will help you to narrow down your options, but not all brokers will offer the same advice. Here are some of the important questions to ask that will make sure you and your mortgage broker are on the same page.
The first thing to check for your peace of mind is that your broker is licensed to provide mortgage advice in Australia. A licensed broker must follow certain rules and regulations and is required to act in their clients’ best interests.
You can ask for details of their credit licence or contact a professional association such as the Finance Brokers Association of Australia (FBAA) or the Mortgage & Finance Association of Australia (MFAA) to see whether they are registered.
As well as being licensed, your mortgage adviser should ideally have extensive experience in the industry.
A broker who has helped clients with diverse needs and circumstances to secure home loans is more likely to make reliable recommendations for your own situation. Where they’ve worked is also important – knowing the lenders in Perth or Sydney might not translate when you’re looking for a mortgage broker in Maroochydore. Sometimes the home ground advantage can help more than you’d think.
Mortgage brokers have relationships with a decent number of lenders, but there’s no specific number to aim for. As a general rule, more is better.
A broker who works with a large panel of lenders will give you a broader range of options to choose from than one who only works with two or three providers. They are also less likely to be biased.
Your borrowing capacity for a mortgage depends on your income, outstanding debts, credit rating, family size and other factors such as self-employment.
A good mortgage adviser won’t only tell you how much you can borrow, but will also recommend how much you should borrow to avoid possible problems and financial stress in the future.
When you’re comparing mortgage interest rates, there’s more to consider than just the APR. A mortgage broker will help you to secure the best interest rate for your circumstances, which may also involve deciding between a fixed rate and variable rate home loan.
With a fixed rate home loan, you’ll pay a set amount of interest over a certain period. With a variable rate mortgage, your interest can rise or fall based on market conditions. Both options have their pros and cons, and your mortgage broker will advise on the best fit for your situation.
After narrowing down the options, your mortgage broker will recommend one or several loan options that best suit your needs and preferences.
They should explain how they came to these decisions and what the pros and cons of each mortgage option are so you can make a fully informed decision based on their recommendations.
You may simply be looking for the most affordable home loan available or you may want a loan with extra features, such as a redraw facility or offset account.
Your mortgage broker can explain what these features are and help you to decide whether they are advantageous or an unnecessary extra cost.
Besides the loan amount and interest rate, you will also be required to pay a deposit and other fees when you apply for a mortgage.
These may include an application fee, processing fees, property valuation fee, stamp duty and lenders mortgage insurance (LMI), depending on the loan. Your mortgage broker will explain all the costs involved and help you to make a comparison.
Most mortgage brokers do not charge borrowers for their services, instead being paid by lenders. Ask your broker whether there will be any charges involved before you use their services.
Your mortgage lender will request various documents when you apply for a home loan, including bank statements, pay slips or tax returns and evidence of expenses, assets and liabilities. Your broker can advise you about these requirements in advance so you’ll have more time to prepare.
When you contact our mortgage brokers in Maroochydore for help finding the right home loan or to refinance your mortgage, we’ll ask you to provide some basic details about your finances and how much you want to borrow. Your lending specialist will then compare all loan options from our panel of lenders to find the best match for your needs and circumstances.
If you’re happy with the loan, we’ll help you to get pre-approved with the lender and guide you through the mortgage contract and settlement so you’ll be ready to move in as quickly as possible.