Can Mortgage Brokers Help You Get the Best Deals on Home Loans?
Purchasing a home is one of the biggest and most important decisions you will ever make. Although this is a huge undertaking, many people do not consider how important choosing the right loan is. There are hundreds of different mortgage loans to choose from and numerous Australian lenders. This is why it is essential that you compare the different loans and their benefits.
How do You Analyse the Best Deals?
The first thing you must understand about mortgages is that interest rates can vary greatly from one lender to another. Interest rates are set by lenders, so they can vary greatly. If you have been house hunting, you have probably seen some amazing interest rates advertised. Before you accept an ultra low-interest rate, you should find out why the rate is so much lower than other lenders’ rates.
A low rate may only be available to those with really good credit reports or very high income. Because of this, you may not qualify for this ultra low-interest rate. Secondly, the loan may be a variable rate loan or be fixed for only a short period of time. If the loan is a variable rate loan, the interest rate can rise dramatically which can affect the affordability of the loan.
What Else Should be in the Mix?
Another factor to consider is the fees associated with the mortgage. These fees can end up costing hundreds, if not thousands of dollars. Mortgage lenders make money monthly off of the interest. However, they also make money on the initial fees charged to process the loan.
Unfortunately, many borrowers are caught by surprise as these fees may not be disclosed during the application process. These fees can include origination fees, application fees, bank fees, valuation fees and settlement fees. When you apply for a loan, you should ask about the standard fees charged and get an approximate dollar amount that will be due at the time of settlement. This will help avoid surprises at the time of settlement.
What Should I Look for in the Fine Print?
The third thing to consider when comparing mortgages, are any fees that may be charged after the loan settlement. These fees include fees charged annually, prepayment penalties, overpayment penalties and more. These fees are charged after the loan has settled as a way for the lender to increase their revenue. To help you avoid these fees, you should speak with the lender and verify that no additional fees will be charged after the loan settles. Finally, read the loan application agreement carefully to make sure there are no hidden fees listed in the fine print of the agreement.
The best way to protect yourself from extra fees and to ensure that you get a good interest rate is to use a professional mortgage broker. Mortgage brokers are familiar with the lenders in the area and can help you determine the best lender for your unique situation. Furthermore, a mortgage broker has the software needed to monitor and compare the different lenders in your area.