Need help with a home loan?

How using a mortgage broker works

Mortgage brokers have a wide range of financial institutions and products they can draw on when trying to find a suitable loan for their client. This means a Broker is able to give you a choice of lenders and options to choose from, so you can find one that best suits your individual needs without feeling you are limited to only one bank's products. Below is a guide of what your Broker should be able to do for you as part of the loan enquiry and application process.

• For residential loans, all of the Broker's services should be free. That is, the whole service of giving you information in relation to home loans, negotiating the loan on your behalf and handling the necessary paperwork through to approval.
• The broker service should include:
  • The right broker will take the time to really understand your entire finance situation.
  • Your broker should have a wide range of home loans from a wide variety of lenders to choose from.
• Check the qualifications and experience of your broker, even ask for references from previous borrowers. Are they an MIAA member?
• Confirm your broker is not just acting as an agent for one lender.
• Ensure your broker discloses all commission and payments received so you can judge if the particular loan they are recommending is influenced by how much the broker will be paid.
• Ask your broker to illustrate on their laptop how the loans they offer are researched and rated.
• Ask your broker how they comply with the Privacy Act to ensure the security of your personal and financial details.
• Your broker should have professional indemnity insurance.
• A good broker should be able to clarify the most complex offers in simple English.
  
  

Applying for a home loan

Borrowing money for your first property may seem like a complicated process so it helps to have someone on your side. Mortgagebrokersearch will connect you our experienced brokers have access to the lenders qualifying criteria, so they can help you work out which lenders are more likely to approve your application based on your situation and loan amount.

Criteria that banks look at when considering applications

All lenders look at different qualifying criteria. Some of the most important factors are:

What documentation will I need for the loan application?

You will be required to produce the following information to a lender to support your loan application.

In order to identify you, some of the following will need to be produced:

• Drivers licence
• Credit card
• Electricity or gas bill
• Medicare card
• Birth certificate
• Citizenship certificate
• Passport

The following confirmations are also required to value your asset base:

• Real estate investments
• Term deposits
• Shares/bonds
• Term insurance

Any liabilities will create an adverse effect on your borrowing capacity. Where ever possible eliminate as many liabilities you can afford to improve your borrowing capacity. Liabilities include:

• Credit cards
• Charge accounts
• Personal Loans
• Other loans

If you are self employed, you'll need:

• Last two year's financial figures
• Personal and Business Tax Returns
• Contract of sale/purchase for the property if available
• Other circumstances - additional information:
  • Vacant Land
  • Investment property - lease, rent appraisal or evidence of receipt of rental income
  • Re-financing - past 12 months statements for existing loan(s), copies of rate notices and insurance policy
  • Building - provide a copy of plan, specifications and builder's tender
    
    

Frequently Asked Questions (FAQ's)

Q. What kind of loan should I apply for?
A. Once you have all the required information the broker you are matched with will help you find the right loan. The main categories are:

Basic variable:
This is a basic mortgage with few features. Extra payments are allowed without penalty.

Fixed interest:
A mortgage where the interest rate is fixed for a pre-negotiated period. Your repayments will not change during this time and additional repayments may not be allowed or may incur a fee.

100% offset:
A system of mortgage minimisation. There is often a higher interest rate associated with this type of loan; however the benefits gained may outweigh the additional interest paid.

Equity:
A line of credit with an established limit. This is available to applicants who do not require mortgage insurance.

Combination of the above:
It is possible to have a combination of two or more features of these loans in the one loan product.


Q. Am I eligible for a professional package?
A. Your mortgage consultant you are matched with will assess if you are eligible for a professional package. A professional package is an industry term for discounts offered by major lenders to certain applicants. Previously, banks reserved these professional packages to a select few clients. Our brokers members have uncovered all major professional packages and we will determine if you are eligible for these packages.


Q.Do I need to pay mortgage insurance?
A.Mortgage insurance is a one off cost that must be met by the borrower if the lender is providing more than 80% of the value of the property. It will cover the lender in the case of your default. There are lenders who will lend over the funds requested to cover the mortgage insurance to approved applicants.


Q. I have past credit issues. Can I still get a loan?
A. Lenders have now developed loans called non-conforming loans for people with incidents in their credit histories, non residents, people with small deposits and mature aged borrowers.

Q. I plan to renovate my home. What should I be aware of?
A. Renovating a home often ends up costing more than you planned. In addition to the cost of materials and builders, you may need to spend money on development applications and enlist in the services of an architect.
Getting your finance right means being organised in more ways than one. The way you manage funds for a renovation can be different, depending on what you are trying to achieve. Talk to one of our building and construction loan mortgage specialists about the  different kinds of lending facilities to suit your situation.


Q. I am a senior citizen. Can you find me a broker who can arrange a reverse mortgage?
A. Yes, a Reverse mortgages offer retirees a great cash-flow solution by maximising the value in their home. Reverse mortgages operate the opposite way to a 'standard' home loan. Instead of the loan amount reducing as repayments are made, interest is applied to your loan, which is secured against the house. No repayments are required on a reverse mortgage until the borrower sells the home, dies or permanently moves out, with the total amount growing over time.
Dependent upon the lender and the product, borrowers can take out up to 50 per cent of the house's value as a lump sum or in the form of regular payments to create an income stream to supplement the aged pension, or a combination of both. Age restrictions do apply.