Mortgaging your property through a professional mortgage broker in Australia can help you get a competitive interest rate than a bank. A mortgage broker can apply their expertise, including knowledge of legal issues, to smoothen your property buying process in Australia.
According to the New York (USA)-based Statista, mortgage brokers in Australia are playing the most dominant role in property matters. In 2022, Australia’s ten largest mortgage lenders comprised over 92 percent of the mortgage market.
The Commonwealth Bank of Australia and Westpac Banking Corporation were leading mortgage providers by the value of gross mortgage lending. They accounted for roughly 26 and 22 percent of gross mortgage lending.
Here are the key benefits of hiring a mortgage broker
- Getting home and investment loans
- Refinancing a loan
- Leasing and property purchase
- Explain your latest position in the property market in Australia
- Give you consultancy on when to invest in property.
These factors are extremely crucial for your property investment. However, it’s essential to ask some questions before selecting a property broker:
You are making a major financial decision when considering buying a property. Buying a property involves signing legal documents. Unless your mortgage broker is honest, reputed, and reliable with the required expertise on legal documents, you may run the risk of hiring an inexperienced mortgage broker who may not help you understand the nitty-gritty of property matters.
6 Questions to Ask Your Mortgage Broker Before Signing Any Document
Check Profile of Mortgage Broking Firm: Buying property is a sensitive issue, and you do not often own a property. If the mortgage broking firm is not into the business sufficiently long, it may not have the expertise and knowledge of mortgaging matters and their legalities. This background check can put you on the safer side.
Ascertain if Mortgage Broker has its Loan Products: Established mortgage broking firms often have their loan products. If they have loan products, they might discourage you from institutional borrowing like from a commercial bank. Their loan products are okay, but you must look at the comparative terms vis-à-vis a bank. You may go for it if they don’t have any hidden charges and offer you more benefits than a bank. But it is always advisable to borrow from a bank.
Check if Broking Firm was Engaged in Litigations: If your broker handling your home mortgage case was earlier engaged in property-related litigations or court cases, you should not opt for such a firm. The litigation-involvement track record can help you greatly as such involvements prove the mortgage broker is not legally sound. You can easily check it by asking for a certificate about non-involvement in litigation. If the firm issues it, it is not engaged in court cases. If the firm does not issue this officially, the mortgage broking firm might have been involved in litigations earlier.
Question about Service Fee and % of Commission: The property mortgage market fee and commission in Australia is quite competitive. Since the commercial banks loaning you for a home or property pays commission to the mortgage broker, the firm should not charge a service fee. Usually, they provide free consultancy services and allow you to get a bank loan if they are not lenders. If they are charging fees or high commissions, just leave such a mortgage broking firm and opt for the one that does not charge service fees.
Question About Time Frame of Availing Mortgage Loan: A commercial lending bank settles the loan applications very quickly if all the documents are in order and the mortgage broking firm is of reputation. You should ask about the time frame of the mortgage loan. A reputed mortgage broker Melbourne will stick to the stipulated time frame, but a new firm or a novice entity may take longer. This is the reason time-frame ascertainment is very important.
How Many Cases You Handle in a Year: This question is important as a firm with a good reputation will handle many mortgage cases. But a firm not known in the mortgage market may not get many clients in a year.
A report from the Reserve Bank of Australia says that mortgages with offset accounts (an at-call deposit account directly linked to the mortgage loan) currently comprise around 40% of mortgages in Australia. Funds deposited into an offset account reduce the effective outstanding loan balance and the interest payable on the loan. Mortgages with redraw facilities make up around 70% of Australia’s total number of home mortgages. This report proves the importance of mortgage homes and the importance of mortgage brokers in handling your case.