A mortgage broker offers a free service that will source from a variety of financial institutions the best product to suit a client’s mortgage needs. Therefore, the difference is if you were to go to a bank they will only offer their own products. This means it can be over whelming to visit other banks to compare loan products. Using mortgage broker can save you considerable time and confusion as they do all the leg work on behalf of you.
After you have contacted your mortgage broker, they will assess your borrowing capacity based on your income and current expenses. This will determine how much you can borrow for a new mortgage. Every time a loan application is submitting to a financial institution a servicing calculator is included to support the client’s income for assessment.
Everyone’s mortgage needs are different. By contacting your broker they will assess your situation, then advise you of the requirements for your deposit. A rule of thumb is that if you are purchasing a property for the first time you will need a minimum of 5% of the value of the property (conditions apply). However, the more of a deposit you contribute will help reduce mortgage insurance, which is only of a benefit to the financial institution.
Having contacted your mortgage broker, they will determine from the information you have supplied to them what the best home loans is available. Once you have decided the one that suits your needs, the broker will start the application on your behalf.
Currently with historically low interest rates, a mortgage broker will generally suggest that part of your home loan should be fixed and part should be variable. This gives you the option of making additional repayments without being penalised. In many cases this will reduce the loan term of your mortgage meaning you will own your home quicker.
Yes, depending on whether your home loan is fixed, variable or a combination of both. If your home loan is entirely fixed you are limited over the period of the fixed term as to how much more you can repay (conditions apply). A variable home loan allows you to make extra repayments. If however, you have a combination home loan of both variable and fixed then any additional repayments should be made on the variable component.
Lenders mortgage insurance (LMI) is there for the protection of the financial institution, it is not there for your benefit. In Australia all home loans are mortgage insured, however the bigger the deposit you contribute to your purchase will reduce the need pay this.
Example: If you contribute 20% for the deposit then the bank will pay the mortgage insurance on your behalf, as you are deemed less of a risk to them. If your deposit is below 20% you will pay mortgage insurance. The premiums are calculated based on your contribution, and in many cases the LMI can be capitalised on to your mortgage loan amount avoiding you paying this upfront.
Most fees can be avoided depending on the loan product you have chosen. A lot of banks will offer a professional package to their clients that includes a discounted rate and no monthly or application costs (conditions apply). The bank’s annual package fee generally is absorbed for your benefit within the first few weeks of your mortgage operating. The only charges at the settlement of your loan are government initiated, that the bank collects on behalf of them. These are the registration and transfer fees. The registration fee is a flat cost and the transfer fee is calculated on the value of the property you are purchasing.
If you are a first home owner then you are entitled to stamp duty exemption (conditions apply). This will depend on the Australian State or Territory you are purchasing your property in. Some charge stamp duty but will give you a First Home Owners Grant back instead. However, if you are purchasing your next home then stamp duty will apply. This is calculated on the value of the property and if you contact your mortgage broker they can advise you of the amount to pay.
Yes, because generally it is easier for them to undertake the necessary searches of your new property saving you considerable time. They will then liaise between the bank to ensure a smooth settlement process. Employing a legal representative is an extremely wise decision, as along with the mortgage broker, will ensure that you are protected should anything go wrong unexpectedly with your purchase.
The Great Start Grant is offered by the Queensland State Government to people who are first home owners of $15,000 (with the maximum property value of $750,000 in Queensland). This can only be used to build a house or purchase a house and land package. In the other states or territory different first home owners grants apply, for information about your particular state please contact your mortgage broker.
By contacting your mortgage broker they will be able to advise you of the areas that the grant is available. Some regions will not only give the grant to first home buyers but to second time purchasers and investors.
Your mortgage broker will apply for any applicable grants on your behalf when lodging your home loan application. They aim to have the grants approved for either the settlement of a house and land package or after the first progress draw if you decide to build.
Generally from start to finish your loan should be approved within 14 days. This however, can take longer in some situations where a financial institution requests additional information from the client.
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