Considerations Before You Make an Offer
Consideration should also be given to the most beneficial purchasing entity (company, trust, individual or joint names) for the property. If there are tax or asset protection considerations, you may also need to speak to an Accountant who specialises in such things to ensure you’re setting yourself up in the best possible way based on the purpose of your property acquisition.
Acquisition fees (stamp duty and registration costs) will also need to be factored in and consideration given to any state-based grants you may be eligible for if you’re a first home buyer. In addition, Lenders Mortgage Insurance (LMI) fees may also be applicable if you’re borrowing more than 80% of the purchase price of the property. Some lenders will allow you to add this (capitalise) to the loan and others may not depending on your individual circumstances and offers available in the market at the time.
Benefits of Hiring an Experienced Mortgage Broker
Hiring the services of an experienced mortgage broker who deals with property transactions day in day out can be a game changer for many reasons. Firstly, a good broker will assess your options based on your personal financial position. They will advise you of all costs likely to be incurred and will then will help you to obtain a fully vetted pre-approval so you can negotiate with confidence and help to secure your intended property at the lowest possible price. A trap some inexperienced people can fall into is assuming an online or preliminary pre-approval (not fully vetted by a lender) is sufficient. This can be costly and extremely stressful so best to do the hard yards up front to minimise the pain.
Secondly, they will connect you with the right people and guide you through the property maize to ensure you don’t make any costly errors or get caught up on any complicated jargon and acronyms used in the property and finance world. It’s important to fully understand all your options and a good broker will walk you through this process to ensure your overall strategy is purpose-built based on your circumstances.
Finally, and most importantly, an experienced mortgage broker will ensure your home loan is both competitive and suitable for your purposes. It could be as simple as structuring your loan on a partly fixed and variable basis (loan splitting), or ensuring you have redraw or an offset account, that could both alleviate unnecessary stress and save you valuable money over the term of your loan. Saving seemingly small amounts of money regularly over a long period (generally 30 years) can be extremely beneficial when you fully understand the value of compound interest. You can learn more about the power of compound interest by googling ‘ASIC Moneysmart compound interest explanation’.
How Do You Find an Experienced Mortgage Broker
Referrals, Recommendations & Testimonials
Getting positive testimonials, references or recommendations from a friend, family member or previous client about potential mortgage brokers can offer a great insight on how they will work with you. Great mortgage brokers act like partners in the home acquisition process. A great mortgage broker is one who develops great client relationships by actively listening to the needs of their clients and their primary objectives for buying. This enhances their abilities to discover the right options for every client depending on their personal circumstances and needs.
It is important to find a Mortgage Broker who has runs on the board. Like any industry, there can be a vast difference between a new or inexperienced Mortgage Broker and a well-established, experienced and successful Mortgage Broker. Industry, property and ideally business experience are extremely positive attributes to help you on your journey to improving your wealth through property if this is your goal. Do the homework upfront to find a good option for you and benefit for years to come.
Reputation & Qualifications
All Australian Mortgage Brokers must be a member of either the Finance Brokers Association of Australia (FBAA) or the Mortgage & Finance Association of Australia (MFAA). Ensure anyone you’re considering is a member of either one of these professional bodies. You can check your preferred mortgage broker’s reputation by referring to the FBAA or MFAA websites.
Additionally, fully registered and qualified mortgage brokers must maintain Professional Indemnity Insurance which provides clients with added protection and comfort.
Number of Lenders they have access to (Look for a large Lender Panel)
Importantly, a good Mortgage Broker will have access to a large lender panel. Brokers are generally only able to access lenders listed on their aggregator panel so ensure they have a broad range of lenders (some branded and some lesser known lenders who don’t have the overheads to cover = better rates) available as the general rule of thumb is that the greater the competition, the better deals that are on offer as they compete for your business.
Finding the best home loan is not only about the interest rates but also putting into consideration all the other aspects of it to find the right deal that is tailor-made for you. You should ensure that you pick the right mortgage broker to ensure you’re getting the most suitable home loan package based on your circumstances, at the best possible rate and structured in the right way to protect your assets whilst minimising taxation. Ensure that your mortgage broker is covered by an Australian credit licensee to ensure that they offer full disclosure and protection.