Did you know that 1 out of 3 Australians use a mortgage broker? Here are a few reasons why you should consider using a broker:
• Choice
• Convenience
• Professional advice
The mortgage broker is an expert in their field and offers the consumer extensive choices while balancing their financial interests and goals. Some brokers may offer to visit you at your home after hours, or on the weekend. This service may be convenient and suit your needs.
If you are just looking for a home loan, most mainstream brokers will not charge you any fees for their services. Even if you have had a troubled credit history or your financial situation is too unusual for mainstream lenders, you will find brokers who will assist you free of charge.
QUESTIONS TO ASK YOUR MORTGAGE BROKER
With the large and varied home loan options available it is important to ask your mortgage broker some specific questions regarding, which lender you will be using, the type of home loan they have selected and how much you will be paying, so you don’t get any nasty surprises when often it’s all too late.
General questions to ask…
What industry experience and qualifications does your mortgage broker have?
How do mortgage brokers get paid?
Suitability of loan questions to ask…
What percentage of the property value can I borrow?
Do I have to pay lenders mortgage insurance?
What are the types of home loans that are available?
Which home loan will suit my immediate and future needs?
Which home loans offer the best variable/fixed interest rate?
Home loan questions…
What is the current interest rate on the home loan?
Is it better to have a fixed or variable portion?
If I want to can I have a fixed and variable component?
What are my weekly/ fortnightly/monthly repayments?
Note: It is very important to find out from your mortgage broker how each lender calculates weekly or fortnightly repayments. Accelerated payments are calculated by dividing your monthly repayment by two for fortnightly and by four for weekly repayments. This method can save you a substantial amount of interest and can reduce your home loan term, but your repayments are higher than actual fortnightly or weekly repayments.
Are there various establishment, valuation or legal fees payable?
What about any ongoing monthly/annual fees?
If I want pre-approval, are there any upfront fees?
Does this lender have a good customer service reputation?
Does the lender provide Internet/ phone banking?
Do I incur any fees for discharging my home loan?
Can I make additional lump sum payments or increase my current repayments?
Are there any additional fees for these services, and if so, what are they?
Are there future costs involved if I discharge the loan, decide to change the loan products, want to increase my repayments or make a lump sum repayment?
Work your salary...
Ask your lender if you can pay your salary directly into your home loan or into an interest offset account with a redraw facility. This reduces your loan balance and the amount of interest you pay.Think about what a low rate of interest your salary is earning in your savings account and how it could be put to better use.
