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Selecting a Mortgage Broker
Selecting from the multitude of mortgage brokers and real estate agents who provide finance broking services can be risky, as mistakes can be made!!!
We highlight here some common mistakes that can be avoided by being informed as you tread carefully into one of the largest investments you are likely to ever make.
Selecting a Mortgage Broker
The Australian home loan market has moved strongly towards mortgage broker originated loans. This has resulted in large numbers of new players in the home loan market. However a mortgage broker should have experience and training in a range of lending products from various lenders, including broad knowledge of the finance industry. The broker who works for the subsidiary of a major lender may be more likely to promote their products. However, a mortgage broker from an independently owned business working for themselves will show you a range of products before justifying and recommending a product for your requirements.
The difference in commissions earned by an independent mortgage broker from the various lenders is minimal. Ensure that you get confirmation of the fees and charges that apply. Mortgage brokers are required to disclose commissions they receive from the lender and any application fees or valuation fees you may have to pay.
A mortgage broker should have experience in finance and property related sectors over a period of years. After all they are working at the intersection of these sectors. Long term experience is a definite plus...
Ability to Provide Personal Service
You should not be passed over to an inexperienced employee but should be able to deal with the same person over the long term. Most mortgage brokers are employed by large companies that spend big bucks advertising and the public responds indiscriminately, ending in wasting time all around. However the firms have to employ many people with a minimum of training and commercial knowledge to pursue these enquiries. Generally these employees have to meet sales targets to survive. So when you arrange to meet with a mortgage broker establish their background and how long they have been with the firm and in the industry.
Choosing a lender referred to you by the estate agent.
The agent is not familiar with your financial situation; the agent is interested in getting the property loan arranged quickly and the transaction completed so he can get his commission. Now, most agents are professional enough to take care of your best interest. However the loan may not have the best interest rates and conditions that you could have obtained if you had checked around or contacted Sydney Mortgage Plus. This is also true when looking for property insurance. Shop around before settlement or use a mortgage broker like myself to do the hard work. We organise general insurance through Allianz.
Refinancing your home with your present lender.
Loans have to be submitted to mortgage insurers by the lender even though you may not be required to pay any insurance premium. So in most situations you will be required by your present lender to put in a new application, with all supporting documents for the property loan. So the effort on your part to shop around and obtain the loan through a new lender may prove to be worthwhile. Always have all the documents ready when you go to make an application because any delay or hold ups associated could be costly if settlement dates are not met.
Check the break costs with your present lender or the loan documents before arranging mortgage refinancing.
Most lenders have mortgage discharge fees and charges. In addition, for fixed interest loans they have break costs based on the period of the loan that has not expired and the rate of reinvesting the funds. Some lenders will have break costs, which can be based on a % of the loan or say 3 months repayments.
Is the lowest interest rate the most important factor?
While interest rates are important, bear in mind other costs and fees like monthly administration fees, switch fees and application costs. Discounted home loans are good if the discounts are for the life of the loan, say below the standard variable rate of the lender. Short terms discount, say for a year, may end up being more expensive after the period of discount expires, as these contracts require you to stay with the lender for a minmum number of years after the discount period.
Signing mortgage documents without reading.
Make sure you obtain mortgage documents you are required to sign in advance so you can read through them or get professional assistance.
Disclaimer: The information contained herein is for the benefits of Sydney Mortgage plus Pty Ltd clients. However your future financial situation and interest rate movements can affect the strategy, therefore you must obtain independent financial advice. This company takes no responsibility or accepts liability for any adverse outcome as a result of using these methods. Terms, conditions, fees and charges apply to each of these loans, for further details contact Samuel Chacko.
Mortgage Broker providing low doc home loan, refinance home loan, new home loans, construction home loan, vacant land loan, first home owners grant, bridging finance for homes, car loans, commercial low doc loans, no doc commercial loans, business loan