Applying for a mortgage can be a confusing process, which is why using an experienced mortgage broker is such a great idea.
However, to ensure that you receive the best possible home loan it’s important to first sit down with your broker and have a frank conversation. With the new year just around the corner, here are 5 important points to discuss with your mortgage broker in 2020:
- How will my current circumstances affect my mortgage application? A mortgage brokers job is to help you get the very best loan possible, but to do this they need to know everything there is to know about your current circumstances. Make sure you also tell your broker whether or not you are self-employed and if you’ve ever been rejected for a loan in the past. The more your broker knows about your circumstances, the better the advice they can offer.
- What kind of features should I be looking for in a mortgage? Mortgages include a variety of features and these can be really important depending on your future goals. For example, if you’re planning to do renovations then a redraw facility may be necessary. Or if you’re hoping to reduce the mortgage principal then you’ll need to make sure your mortgage allows for additional repayments.
- What is the maximum amount I should borrow? It’s important to know not just how much you could borrow, but also how much you should borrow. An experienced mortgage broker will be able to assess your circumstances, your current earning capacity and how much you have saved as a deposit, and then make a recommendation on the maximum amount they would recommend you borrow in order to avoid higher interest rates or paying extra for Lenders Mortgage Insurance.
- What will be the true overall cost of my mortgage? It’s important to remember that the true cost of your mortgage isn’t just the amount you initially borrowed – it’s the amount you end up paying back. This total amount can be impacted greatly by the length of the loan, the kinds of fees that your lender applies and whether or not you will be making interest-only repayments. Once your broker has calculated the true overall cost of the various mortgages available, then you’ll be able to make the best long-term decision.
- What are the various stages of mortgage approval? Some people have been caught out by the various stages of mortgage approval, so it’s important to discuss this with your broker. Generally, a ‘pre-approval’ can help you to know what price range you should be house-hunting in, but it’s not a guarantee and shouldn’t be used as a basis for making a formal offer on a property. A ‘conditional approval’ is more formal but is still conditional on what property you plan to purchase. ‘Full approval’ will only occur after a property has been signed off on by the lender.