What questions can I ask a mortgage broker

If there has ever been a time to revisit your home loan then now could be perfect. 

Looking at ways to save has never been more important and your home loan could offer you a much needed savings boost. 

So what should I be asking my mortgage broker? Let’s explore. 

Am I getting the best interest rate available?

Chances are if you’ve had your loan for a while, then you’re probably not getting the best rate available. 

In today’s market, you can expect to be getting interest rates around 2.3% – 3%  per cent. 

Even a small change can save you around $50 a week, so it’s worth looking at. 

When it comes to researching the interest rates available, a good mortgage broker will be able to explain to you what the comparison rate is, which provides a more accurate platform to measure more than one loan product against another.

Sometimes low interest rates can cost you more in the long run if there are extra fees involved in the loan, so pay attention to the associated fees. 

A Comparison Rate is a way of comparing home loans, by taking into account the fees and charges you may incur over the life of the loan, as well as the interest rates themselves.

Your mortgage broker can also take you through the options of variable and fixed interest rates and save you the heartache of hours of research. 

Should I take advantage of a mortgage break?

This really depends on your current situation. Your mortgage broker will be able to sit with you and understand what financial difficulty you are currently experiencing. 

Perhaps a mortgage break is what is absolutely needed. But perhaps seeking a smaller interest rate, refinancing or consolidating your debt will give you the savings boost you need. 

Remember that taking a mortgage break doesn’t mean you get off scot-free. The interest during the pause period will still accrue and there will be a time when you will have to start paying that back. 

So perhaps discuss the post-plan of attack with your broker as well so you know exactly what you’re in for. 

How much does it cost for your advice?

Often it is nothing at all. In Australia, many mortgage brokers offer home loan advice without charging them a cent. 

Your mortgage broker will get paid on a commission basis by the banks and lenders who provide the home loans. 

Also, for as long as the borrower keeps their mortgage with a bank, the broker that arranged the loan will keep receiving a smaller ongoing commission, known as a “trail commission”. 

I’m ready to purchase a home or refinance, now what?

Set up a meeting with your mortgage broker and feel free to ask lots of questions. 

Here are some questions you might like to consider asking in your meeting:

  • Do you offer loans from a range of different lenders?
  • Why did you recommend this loan to me?
  • What fees will I have to pay when taking out this loan?
  • What features (options) come with this loan? Can you show me how they work?
  • Can you show me a couple more options, including one with the lowest cost?
  • What is the threshold for lender’s mortgage insurance (LMI) and can I avoid paying it?
  • What information do I need to provide for the loan application?

Sunshine Coast Financial Solutions can help you clear the way for a simple and informed decision on the best home loan for you. Our quick and easy step by step approach takes the hassle out of the lending process, so please give us a call with any questions. 

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