Using a good mortgage broker in Australia can be an efficient way to analyze many home loans and get the right deal quickly.
There’s a lot of mind-numbing paperwork, and you’ll want the best deals negotiated on your behalf. It sounds easy, but it isn’t.
Presently, the mortgage market has become more cutthroat. So you don’t need to deal directly with financial firms. Yes, you don’t, especially when taking a home loan. There’s another alternative – the broker.
But getting the best broker isn’t easy. Who can you trust? Will a broker give us the perfect home loan deal? Are brokers simply in it for the fee?
To get the answers you need, you must ask the broker some questions during your initial consultation.
Are you a licensed mortgage broker in Australia?
You need a licensed mortgage broker to give you advice on lending. So always ensure your broker operates lawfully. If you doubt his or her eligibility, check the ASIC register.
What type of mortgage is best for me?
You want a mortgage right? Well, first you need to know which mortgage is perfect for you and which isn’t. It’s not rocket science, but it’s not ‘ABC’ too. There are fixed-rate mortgages, tracker mortgages or even a discount mortgage. A professional will undoubtedly have a great time explaining your options to you. Also, you’ll know which one suits you to a tee.
A mortgage involves a lot of intricacies, and some mortgage options will take more than some mouthing off. A broker will help you understand those and pick the right deals, so you don’t get marooned. Further, the loans you qualify for and how your finances will be affected, make for an interesting discussion.
Just how much can I afford to borrow?
This question hit many points at once. Most times what you’re allowed to borrow is roughly five times what your annual income will allow. There are catches though; it’s dependent on who your brokers are and the circumstances that surround your finances. Your broker will explain the amount you’ll need, including the rates or additional costs.
A detailed view and opinion of a mortgage broker in Australia help you decide the specific lenders to borrow from and key information involved in buying a home.
How much would I need to put down for a home?
Mortgages are always geared towards owning a home. To that end, you’ll need to make a down payment. A good broker should aim to get the best terms, rates, and conditions for you. You’ll be advised to put up a large amount of down payment to smooth things over.
That’s not to say it can’t below, but at least 20 percent of the buying price should count for something. The conditions previously listed are also affected by the down payment you make. You’ll be well advised by a mortgage broker in Australia to avoid extra sums. More information won’t hurt, especially if you need to save costs.
What is the interest rate?
Interest rates make for contentious issues, and you should look to get it out of the way immediately. It’s one of the first questions you should ask alongside the Annual Percentage Rate (APR) for the loan. The interest rate quote helps you compare with what’s available elsewhere in the industry.
Also, the calculation may seem a bit difficult, and you’ll want to understand what you’re paying and why. The mortgage fees often come with related fees that are in line with the terms of the loan. Part of the interest rate is determining whether they’re adjustable or not.
How many points will the interest rate include?
A point is usually 1 percent of the total mortgage amount. You’ll be paying a low-interest rate should you be able to spend more points. Also, your points are tax-deductible and not centered on the number of points you make. This question is crucial because it helps you learn what benefits accrue when you buy more or fewer points. The quotes you receive will help you make a decision.
What are the required costs or fees?
Some fees and costs stretch as far as third-party vendors. Being aware of them means you won’t be caught off guard. Information is also vital here because the fact is you’ll have to cover some fees. They include but not limited to a Credit report, Appraisal, a Recording fee, Taxes, and Inspection fees. A mortgage broker will give you a detailed estimate of the costs linked with your loan.
Our loan rate locks on offer?
Interest rates have a penchant for swinging like a pendulum so you’ll be within your rights to ask this question. In the long term, locking in an interest rate, especially a low one, is an advantage. Once you sense that the interest rates are going higher, it’s time to lock that loan. What better way to know what to ask? Some mortgage brokers and lenders won’t state their rates until you commit.
Further, they’ll try to offer the minimum interest rates that’ll last for a short term. By now, you can guess they’ll charge you higher interest rates for the long term. Also, ask how long it will be in the lock and whether it attracts any fee.
What fees do your services attract and when?
You should ask your mortgage broker in Australia what his fee or commission is. Or if he receives both for work done. You shouldn’t be charged for what you don’t understand, so it’s best you layout things first. The payment structure helps you understand the charges. Also, you get to learn when you have to make such payments to the broker.
Can you put it in writing?
Ultimately, it’s vital that you document everything. So ask your broker to give you written details of the arranged loan type. Also, it should include the interest rate terms and any fees.
There you go! These questions will come in handy any time you need a mortgage, and you have to negotiate with a broker or lender.