FAQ's

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A mortgage broker is a licensed professional who acts as an intermediary between borrowers and lenders. They help you find and secure a home loan that best suits your needs from a variety of lenders. 

Unlike banks, which offer their own loan products, mortgage brokers have access to a wide range of loan products from multiple lenders. This allows them to find more competitive rates and terms tailored to your financial situation. 

Using a mortgage broker can save you time and effort. They offer expert advice, have access to a broader range of products, and can often negotiate better rates on your behalf. Brokers can also assist with paperwork and streamline the loan application process. 

The steps typically include:

• Assessing your financial situation and borrowing capacity.
• Comparing different loan options.
• Submitting an application.
• Gaining pre-approval.
• Finding a property.
• Formal loan approval.
• Settlement.

In Australia, lenders generally require a deposit of at least 20% of the property’s purchase price. However, some lenders may accept lower deposits, potentially as low as 5%, especially for first home buyers. 

LMI is insurance that protects the lender in case you default on your loan. It is typically required if your deposit is less than 20% of the property’s value. The cost of LMI can be added to your loan amount. 

Common types include:

• Variable Rate Loans: Interest rates can fluctuate with market conditions.
• Fixed Rate Loans: Interest rates remain constant for a set period.
• Split Loans: Part fixed and part variable rates.
• Interest-Only Loans: Payments cover only the interest for a specified period.
• Line of Credit: Flexible access to funds up to a certain limit.

Interest rates are influenced by factors such as the Reserve Bank of Australia’s cash rate, economic conditions, and your personal credit profile. Brokers can help you find competitive rates among various lenders. 

A comparison rate includes both the interest rate and most fees and charges related to the loan, giving you a more accurate cost comparison between different loans.  

Typically, you’ll need:

• Proof of identity.
• Proof of income (pay slips, tax returns).
• Details of current debts and expenses.
• Evidence of savings and deposit.
• Contract of sale (for property purchase)..  

The approval process can vary but generally takes 1-5 days for pre-approval and another 1-5 days for full approval after you’ve found a property.   

A pre-approval is a lender's conditional agreement to lend you a certain amount of money, based on your financial circumstances. It helps you understand your budget and shows sellers you’re a serious buyer. 

Refinancing involves replacing your existing home loan with a new one, potentially with different terms. You might consider refinancing to secure a lower interest rate, reduce monthly payments, or access equity. 

Costs can include exit fees from your current loan, application fees for the new loan, and potential LMI if the new loan is over 80% of the property’s value. Brokers can help you weigh these costs against the benefits of refinancing. 

Yes, but changes in your financial situation can affect your borrowing capacity. It’s best to consult with your broker to understand your options and whether refinancing is beneficial for you. 

There are several schemes such as the First Home Owner Grant (FHOG), First Home Loan Deposit Scheme (FHLDS), and stamp duty concessions. Eligibility varies by state and territory. 

Your borrowing capacity depends on your income, expenses, credit history, and the size of your deposit. Mortgage brokers can help you assess your financial situation and determine a realistic borrowing limit.  

Key considerations include:

• Location and potential for capital growth.
• Rental yield and demand.
• Financing options and loan structure.
• Tax implications and benefits.

Interest rates can significantly impact your loan repayments and the overall cost of your investment. Understanding fixed and variable rate options and how rate changes can affect your cash flow is crucial. 

Yes, you can leverage the equity in your current property as a deposit for purchasing another property. This is known as equity release or using a line of credit.  

Strategies include:

• Making extra repayments.
• Increasing repayment frequency (e.g., bi-weekly instead of monthly).
• Using an offset account.
• Refinancing to a lower interest rate.

An offset account is a transaction account linked to your home loan. The balance in the offset account reduces the amount of interest you pay on your home loan. 

If you’re struggling to make payments, contact your lender or broker immediately. They can discuss options such as temporary payment arrangements, loan restructuring, or hardship assistance. 

Typical fees include:

• Application or establishment fees.
• Valuation fees.
• Legal and settlement fees.
• Ongoing monthly or annual fees.
• Discharge or exit fees if you pay off your loan early.

Many mortgage brokers do not charge borrowers directly as they receive commissions from lenders. However, some brokers may charge a fee for their services. It’s important to discuss this upfront. 

Stamp duty is a state or territory government tax on property purchases. The amount varies based on the property’s value and location, and some concessions may be available for first home buyers. 

Yes, mortgage brokers must be licensed by the Australian Securities and Investments Commission (ASIC) and comply with the National Consumer Credit Protection Act. They must also be a member of an external dispute resolution scheme 

A credit score is a numerical representation of your creditworthiness. Lenders use it to assess your risk as a borrower. A higher score can improve your chances of loan approval and access to better interest rates. 

Always work with licensed professionals and verify their credentials. Be wary of offers that seem too good to be true, and never provide personal information or payments to unverified sources.