Using a Mortgage Broker

You have found the perfect home and are just itching to move in but when it comes to financing the deal you are a little confused. With so many banks and credit unions offering different fixed and variable rates, as well as ‘honeymoon’ periods and variations in fees you can’t even begin to consider where to start, especially when you know that the addition rates can have such a large impact on your mortgage repayments.

A mortgage broker can alleviate your confusion because they look at what selected banks have to offer and they compare these based on your circumstances and aid you in finding the best suitable home loan for you.

Simply put, the mortgage broker acts as a liaison between financial institutions and yourself. They identify your needs, find and compare suitable lenders, negotiate suitable deals and arrange all the legalities and paperwork on your behalf. In fact, the mortgage broker makes finding the best home loan on the market an easy task and the added bonus is you do not pay for the privilege, the bank does.

As a lender the mortgage broker provides you with expert advice tailored specifically to your requirements, they save you time and effort and get you timely results because of their close association with financial institutions. Therefore, it is important to find a mortgage broker that you feel comfortable with and that you believe will source out the best deal for you. To ensure you do exactly this ask the following questions –

1.Are you a member of the Mortgage Industry Association (MIA)?
The MIA is the governing body of this industry and guarantees you that this broker is legitimate.
           
2.What Financial Institutions do you deal with?
The more the merrier in this instance, as you are offered a greater choice of comparative home loans.

3.What is your methodology as a mortgage broker?
Knowing how your broker searches and compares home loans and mortgage rates will tell you a lot about them as a person as well as give you greater confidence in their professional aptitude.

Typically, home loans within Australia are offered at a fixed rate or a variable; however, some banks will allow you to combine the two.

The fixed rate mortgage is a set interest rate for a specific time-span of the loan, after the expiration of this period the borrower may elect to either re-fix the loan to the new interest rate or remain on a variable rate mortgage.

A variable rate mortgage is an interest rate that fluctuates according to the Australian economic climate and is adjusted by the Reserve Bank to make our nation competitive in the international market place. Usually, the variable loan comes with additional features like low introductory rates also termed ‘honeymoon’, which fixed loans do not offer.

The benefits of the fixed loan are you are able to budget and the risk of over expenditure is minimal whereas the variable rate can be stressful when the economy fluctuates and rates rise. Whatever your choice it is important to consider your circumstances and what is best for you at all times before signing a legally binding document.

Disclaimer:

No investment advice provided to you.
This web site is not designed for the purpose of providing personal financial or investment advice. Information provided does not take into account your particular investment objectives, financial situation or investment needs.

You should assess whether the information on this web site is appropriate to your particular investment objectives, financial situation and investment needs. You should do this before making an investment decision on the basis of the information on this web site. You can either make this assessment yourself or seek the assistance of any adviser.