There’s a lot of benefits to using a mortgage broker and they can certainly help you speed up the process of property buying and your financial goals.
A good mortgage broker can assist you in choosing the right home loan for your current and future needs as well as answering all your questions.
Here’s some of the common questions we get asked here at Focus:
1. How will I know what loan is best suited to my situation?
When choosing a home loan, it's important to work out the features you need from your loan and how much it will cost you in fees. Do you need an offset account that can reduce the amount of interest you pay? Do you need a redraw facility in case you need to withdraw funds? A Mortgage broker can work with you to find the best loan for your situation.
2. How much of a deposit do I really need for a loan?
Generally it’s no longer possible to get a loan for the whole of a property’s purchase price. Most lenders will want you to put down at least 5% of the purchase price of the property. The rest - generally up to 95% - may be financed using a home loan. There are other solutions such as using equity from another home you own or even using your parent’s equity as security.
3. What impact will my credit cards have on my loan borrowing capacity?
We all get sent letters to increase our credit card limits and some even occur automatically. However these can have a big impact on your borrowing power.
For example a limit of $10,000 on a credit card can reduce your borrowing limit by up to $30,000, even with a good income and savings.
4. What fees will I need to pay with a home loan?
There may be a range of fees charged by your lender such as application, valuation and settlement fees. It’s important to ask your mortgage broker about these fees, especially if you are refinancing to see if it’s worth the switch.
5. What information do I need to give to get my loan?
A mortgage pre approval can be useful as an estimate of how much you can afford to spend on purchasing a home. Your mortgage broker will need a full disclosure of all your finances and history to be able to put you forward to a lender such as proof of income, your last 2 years tax returns, proof of asset ownership, your credit file (although your mortgage broker can access this on behalf of you), proof of employment (pay slips etc), bank statements and Id proof such as drivers licence and address.
6. Can I change my loan and interest rate at a later stage?
This depends on the loan product you have chosen. The time to lock in an interest rate on your loan depends completely on your personal circumstances and we work with our clients on this process.
7. What is Lenders Mortgage Insurance?
When lenders agree to a loan for a client, there is a small risk that they won't get the money back if repayments are not met. Although the house is used as security, if property values decline that security may not be enough to cover the outstanding loan when the lender comes to sell it.
This type of insurance protects the lender – not the borrower – in the event that you, the borrower can’t meet the loan repayments.
Please note Lenders Mortgage Insurance is not Mortgage Protection Insurance. Mortgage Protection Insurance insures the borrowers and can cover mortgage repayments in the event of unanticipated circumstances such as unemployment, injury, illness or death.
Communication is key when it comes to getting the best out of your mortgage broker.
Make sure you ask a lot of questions and tell your broker exactly what you are looking to achieve so that he or she can offer the best advice for you.
If you are thinking about buying a property, or refinancing speak to us at Focus Wealth today. Contact us today or call 6162 6577.