Jan
When you’re in the market for a new mortgage or refinancing, there’s much more to consider than the interest rates on offer.
The first thing you need to decide is whether you’re going to approach your lender directly or use a mortgage broker.
We’ve drilled down 9 questions you need to ask if you choose to use a mortgage broker.
Know your broker
You’ll want to get a good idea of who your broker is, what experience they have and if they have helped people in a similar situation to yourself before.
Ask:
- How much experience do you have? – Ask who they’ve worked for and if they specialise in any certain kinds of loans. Have they been able to help many others like yourself?
Know the lenders
Ask:
- How many lenders do you use? And who are they?
You probably know that mortgage brokers organise loans through various lenders. You might not realise however, that different brokers work with different lenders.
Ask:
- Why did you choose those particular loans?
If you do engage the services of a broker, the time will come when that broker presents you with different home loan recommendations.
You should then ask the broker to justify the choices.
The broker should explain why those mortgage loans are best suited to your unique situation. The explanation should touch on several things:
- Interest rate
- Interest rate type
- Interest rate structure
- Loan features
- Loan fees
- Loan-to-value ratio, or LVR
Know the loans
Ask:
- What type of loans are available?
Reputable lenders will find out more about you before throwing out loan options.
Here’s a few to choose from – I’ll make sure to recommend the right loan for you based on your current situation
- > Fixed-Rate OR Variable-Rate Loans
- > Interest-Only Loans
- > Split Loans
Ask:
- What are the pros and cons of each loan?
You want to make sure you are well educated on which loan you will be taking out as it will likely stay with you for quite some time.
Ask:
- Which will suit me best and why?
Your broker should provide a detailed and personal explanation as to why they think a certain loan is right for you.
Cut to the chase.
Ask:
- What is the best rate you can offer me?
As the mortgage industry is extremely competitive, you have the opportunity to negotiate with your lender about the interest rate being offered.
Closing time.
Ask:
- How long will it take for my loan to be approved?
This is an important question to ask as it will not only give you a timeframe to work with, but it will also give the lender a deadline to ensure your application is not dragged out.
Ask:
- Will I need to pay Lenders Mortgage Insurance?
Lenders Mortgage Insurance has a purpose of protecting the lender in the situation where you are unable to meet repayments. Lenders Mortgage Insurance is designed to protect the lender not the client. This will help you identify if you’re working with a professional. This fee is paid by the client to protect the lender in case you become unable to make repayments on the loan you’ve taken out with them.
Most lenders will charge Lenders Mortgage Insurance if the Loan Value Ratio is over 80%, however, you should check with your lender as they may offer something different.
Once you have asked all these questions and made notes on the responses you can formulate a well educated decision on whether or not you should use a particular broker, which lenders are offering the best rates & features for your potential loan, which loans are available and what’s going to suit you best. You’ll also know what protection you need and a timeline for the loan to be approved.
Hopefully this has helped you so that when you take that call with your chosen mortgage broker you can be prepared to get the most out of it.
If you want any further information you can reach me on 0438 088 957
Or email me directly at danny@mmoney.com.au
