First Home Buyers: 4 Important questions to ask your mortgage broker
When you’re about to borrow hundreds of thousands of dollars for your first mortgage, I’m sure you’ll have a list of questions you want answered.
We’ve answered your four most important questions here for you in readiness for your exciting new first home buyers journey.
1. Should I use a mortgage broker?
This is the first question you should be asking yourself. And the answer is yes.
Brokers can be valuable because they have access to a wide range of lenders and they may be able to get a better deal for you than if you went to a lender directly.
Plus they take the pressure off you having to do everything yourself and can sometimes help you get your line across the line if a lender says no initially.
2. What lenders have been explored and compared?
This is a big one as the interest you’ll be paying out on the life of your loan is worth a lot of money to a lender. Therefore, there is a competitive market out there to shop around for lenders offering the best deal.
You’ll want to make sure your mortgage broker has done this research for you so ask them who they’ve explored and why the option they recommend is the best one for your unique situation.
3. How should I structure my mortgage?
Structuring your mortgage correctly is the most important bit all all, this sets up your future goals, next property purchase and if you get this wrong it’s the bit that costs you in the long run. The key to this is the correct product, loans splits, loan term and rates.
Setting your repayments up over 20 years instead of 30 years for example could mean a saving of thousands of dollars on interest but still gives you the flexibility to peel these back if tough times come or you look to buy another property to allow you maximum borrowing capacity in the future.
Every little percentage point on your interest rate can really make a difference in the long run, so negotiate and set it up right from the start.
4. Any other tips for me?
Saving up enough money for a house deposit is another big task on the list when you’re a first home buyer.
But how much do you actually need to save? The figure relevant to you depends on a number of factors. In some scenarios applicants can borrow up to 95 per cent of their prospective property value leaving just 5 per cent for deposit plus purchase costs.