A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. A mortgage broker arranges a home loan for a property buyer by acting as a go-between for them and the lender. They can discuss your home loan needs and goals, find home loan options to suit your situation and assist you with the application process.
A mortgage broker is able to assist throughout your home buying process, by providing you with pre-approval to get an understanding of your borrowing capacity and assisting you throughout your application process when you have found your home.
The mortgage Broker:
Lenders pay the broker a fee or commission for selling their products, so you don’t have to pay the broker anything.
Using a mortgage broker can help you take the time and hassle out of shopping around for the right home loan. A mortgage broker is able to help you in your home loan journey by guiding you through the entire process with professional advice.
A variable rate home loan is a home loan with an interest rate that may change over time. If you choose a variable rate home loan, you may be able to take advantage of any interest rate reduction over your loan’s term. If your rate lower, it means you pay less interest on the home loan balance.
On the other hand, you may also find that your rate rises, which would involve paying a higher interest rate and regular repayment amount than at the start of your loan term.
A fixed-rate home loan simply means that the interest rate remains the same throughout the fixed rate term of the loan and set repayments that won’t change during the fixed term .It will give you peace of mind when interest rate increase by lender when RBI rises the cash rate.
The borrower only pays the actual interest on the loan for a specific time (usually between one and five years).
This form of repayment is often used by property investors to maximise cash flow and tax benefits. During the term of the interest only period, the size of the loan is not reduced.
A loan in which both the principal and the interest are repaid together on a regular basis.
You may need to pay break costs if you decided to close a fixed rate home loan account before the fixed rate term has ended. By paying your home loan down completely before the end of the fixed term, or switching to a variable rate or making more than the maximum amount in extra weekly, fortnightly or monthly repayments are all things that could incur break costs.
Break costs vary depending on the remaining term and balance on your loan.
The loan to value ratio is the amount you’re borrowing, represented as a percentage of the value of the property you’re buying. The bigger your deposit, the lower the LVR will be.
The LVR is calculated by dividing the loan amount by the purchase price or valuation of the property you’re buying, expressed as a percentage.
For example, let’s say that you’d like to borrow $280,000 and the property price is $400,000 (assume lender valuation is same as property value).
The LVR of the home loan would be calculated like this:
($280 000 loan ÷ $400,000 property value) x 100 = 70% LVR
(Note that a lender will value a property and decide how much it is prepared to loan you based on its own valuation, not the advertised purchase price, which may be different.)
LMI is to protect the lender in the event of default of your home loan from financial loss, financial loss happens when the proceeds from the sale of your home are not enough to cover the outstanding amount you owe to your lender.
So lender cover their financial loss from LMI provider.
If your deposit less than 20% of the property values then LMI is required, you’ll have to pay one-off, non-refundable insurance premium. But it’s important to remember that LMI doesn’t provide you with any protection even though you pay for it – it’s there for your lender’s protection.
State and government charges which may include transfer of land stamp duty, mortgage stamp duty, and transfer and mortgage registration fees.
A government tax on the purchase of land or property, payable by the buyer. Stamp duty varies from state to state, and first homeowners may be eligible for concessions in some states.
An initial approval by a lender which is typically always subject to a property valuation and may also be subject to other factors such as mortgage insurance or the submission of further documentation. In many cases a lender will issue conditional approval which is valid for a 3-month period.
Unconditional approval is given when the loan has been approved by both the mortgage insurer and the lender. In order for unconditional approval to be granted, the buyer needs to have made a formal written offer on a property or piece of land, which has thereafter been valued by the lender.
A certificate of currency is a document issued by your insurance provider that confirms your insurance policy is effective and valid. It usually specifies the condition of the insurance, including the policy type that you hold, the premium paid as well as the policy expiration date (length of cover).
When applying for a home loan, lenders require you to supply a certificate of currency to demonstrate that you have insured your property. This is done to protect the lender in the event that property is damaged by an unexpected event
Credit Representative Number 545482 is authorised under Australian Credit Licence 382 324 (ABN 59 662 493 889).
Your complete financial situation will need to be assessed before acceptance of any offer or product.
