25 years of experience in the financial sector
Tips when choosing a mortgage broker
Purchasing a property involves several costs.
For example, if you're looking to buy an established home in Melbourne for $1,000,000 as your principal place of residence with a 20% deposit, you can anticipate the following costs:
Stamp Duty: $55,000
Conveyancing Cost: $1,500
Lender Fees: $0 to $800 (depending on the lender)
Total: $56,500 to $57,300
In the case of a refinance, you would primarily need to consider lender fees and mortgage registration costs. We estimate the "switching costs" to be around $800 to $1300. It's worth noting that certain lenders may offer cashback incentives of up to $4,000 to cover these expenses.
Lenders mortgage insurance
If your deposit is less than 20% or you have less than 20% equity in your home available to refinance, you'll also need to factor in Lenders Mortgage Insurance (LMI).
LMI costs can vary depending on factors such as the loan amount, lender, and purpose of the funds. However, it's important to be aware that LMI waivers are possible in certain circumstances (for example if a guarantee is provided on the mortgage).
Optimising your current mortgage
Refinancing your mortgage can offer numerous benefits and an experienced mortgage broker can play a vital role in assisting clients navigate this process. The primary reason to refinance your loan is for a lower interest rate and associated fees, which will in turn reduce your monthly repayment.
Refinancing also gives you the ability to access your home equity by borrowing additional funds for home improvements, debt consolidation or other financial needs.
Part of the refinance process includes determining how quickly you can repay your mortgage. A Mortgage broker should be able to assist you with a budget as well as determine the realistic timeframe in which your mortgage can be repaid. A good broker will have access to all the big lenders as well as other smaller lenders.
Keep in mind that some mortgage brokers have access to other professionals who can add value to your mortgage pathway. These include financial planners, accountants and solicitors.
Planning for home ownership
Planning for homeownership can be challenging but also very exciting! Mortgage brokers play a crucial role in helping you plan and budget and facilitate a smooth journey towards owning a home.
A very important part of planning for home ownership is your deposit. Speak to your broker who can determine the required deposit for a home. They can also provide you with information on government grants, 100% mortgages etc. Mortgage brokers should also be able to provide you with free property reports on prospective properties you are considering.
Choosing the right mortgage broker
We recommend reading Word of Mouth reviews to find out what actual clients think of a particular Mortgage Broker. You can easily post a job in minutes and receive free quotes from vetted experts. It’s always easier to deal with a broker you feel comfortable with, who communicates clearly and who understands your needs.
Do they have a wide range of lenders to choose from? A larger pool of lenders is a good signal that you’ll be able to get a more competitive rate. How long have they been in business? The more established they are, the more experience and knowledge they bring to the table when it comes to choosing the right loan products to suit your circumstances.
All mortgage brokers are required to act in your best interest. It can be an exciting experience buying or refinancing property when you have received good advice and amazing support along the way.
Written by:
Will Rademeyer
Will founded Mortgage Box in 2004. Since then, he has built an award-winning team that is passionate about assisting people with financial solutions. Mortgage Box assists clients country-wide.
Disclaimer: The information provided is general in nature and intended for informational purposes. It is highly advisable to consult with a mortgage professional or financial advisor who knows your individual circumstances.
