Why choose a broker to organise your Home Loan
The Mortgage Broker has access to a large panel of lenders and will work diligently through your goals and objectives, recommending a choice of three lenders where possible. If you walk into a bank, they will only offer you their option because that is all they have. While a simple definition of a good mortgage is one with the lowest interest rate, mortgage brokers understand that what works for one individual may not work for another.
Fixed interest rates, for example, might provide peace of mind if interest rates rise, but they can create concern if rates decrease or if unanticipated circumstances force a change. No matter what your situation is, a mortgage broker can actively assist you in navigating your current situation and reaching your long-term financial goals.
Your First Meeting with a Broker
Your first meeting is your first point of contact with your broker when discussing your lending options. After all, getting a home loan might be difficult for a first-time buyer.
There are many brokers to choose from, and there is a lot to understand. However, there are some steps you may take to ensure that your appointment goes well. Ahead of your meeting, determining what your financial goals are and how much you want to borrow will help your broker to better compare your home loan options and assist you in understanding the fees, costs, and conditions associated with home loans and more importantly how much deposit you will need.
Which Lenders should you choose
With so many new lenders entering the market, deciding on a lender you’re comfortable with can be difficult. Fortunately, there are steps you can do to assist you in making the best decision and lowering your risk.
Trust your instincts and be on the lookout for signs or suggestions that things aren’t quite right. Speak with a mortgage broker who you know or who has been recommended by a friend. The Mortgage broker will have access to a wider variety and panel of lenders
Best Interest Duty for Clients
The law on a mortgage broker’s Best Interests Duty and Conflict Priority Rule is very brief, stating that “mortgage brokers must act in the best interests of the consumers in relation to the credit assistance that they provide” and that “mortgage brokers must give priority to the consumers’ interests when providing credit assistance.
For clients, this ensures that the role of mortgage brokers in matching borrowers with home loan providers, the products offered by lenders, why and why not particular loans are recommended. All of the features associated with different loans are disclosed, with the borrower’s interests prioritised.
When is the Best time to refinance
Refinancing your mortgage entails assessing your present loan and possibly switching to a lender who can better suit your current needs, wants, and circumstances. You may be able to consolidate your bills or pay off your home faster by refinancing. Another popular reason borrowers refinance is to gain access to equity, which is the amount you’d obtain if you sold your house after paying off any connected loans, such as a mortgage on the property, and any other charges.
You may be able to access equity in the property without having to sell it, for example, to make home modifications or acquire an investment property, depending on that amount. Refinancing, on the other hand, is not for everyone. Your broker will need to examine your needs and objectives, as well as your present financial condition, before you begin a refinance application.
Should I choose a fixed or variable rate
Borrowers can choose between fixed-rate loans that retain the same interest rate over a set period of time and variable-rate loans that charge interest based on market rate variations when buying a home, refinancing, or just renegotiating with their present lender. Fixed-rate loans normally come with a few limitations: borrowers may be limited to making maximum payments throughout the fixed term, and paying off the loan early, selling the home, or moving to variable interest during the fixed rate period may result in substantial break costs. However, locking in the interest rate on your home loan can offer stability.
In addition, borrowers should consider the possibility of arranging a ‘split’ loan. This option allows you to split your loan between fixed and variable rates – either 50/50 or at some other ratio. This can allow you to ‘lock in’ a fixed interest rate for up to 5 years on a portion of your loan, while the remainder is on a variable rate which may give you more flexibility when interest rates change and potentially minimise the risks associated with interest rate movements.