Our experience with the broker was positive from start to finish. It was our first time applying for home loan, so there were many things that we did not know about, but our broker was very patient and spoke in a language we understood. We were constantly being informed of what was going on. Very happy with the service here.
My broker was excellent, he made the whole loan process very simple and liaised with all the banks until he had found the top three that fit my criteria. I then chose the loan of the one I felt was my best choice. He was always contactable, and always patiently explained the situation to me. I would have no hesitation in recommending his services to my friends and associates.
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There is a broad range of loan products and features in the marketplace that may seem overwhelming to you. A mortgage broker will be able to:
The industry of mortgage broking is changing. In early 2010, the National Consumer Credit Protection Act, was established to protect borrowers and ensure ethical and professional standards in the finance industry
A key protection for consumers under the NCCP, are the responsible lending obligations on mortgage brokers. The objective of these obligations is to ensure that the credit contract or lease is ‘not unsuitable’ for you, the consumer.
An Option Finance Mortgage Broker charges the borrower nothing for their service, as brokers are paid a commission by the lender when the mortgage is settled.
Mortgage brokers and banks each have their own unique benefits and disadvantages. If you already fall within the traditional view of a “good borrower,” a bank can give you a good loan if you know what to ask for. This is especially true if you are already a customer of the bank itself. If you fall under the traditional “good borrower” category, you should have established credit with an identifiable pattern of paying off debts. Existing credit in good standing with the lender will greatly boost your chances of being granted more credit.
If you don’t fit the mould for a traditional “good borrower”, or you aren’t very knowledgeable in loans and don’t know what a good mortgage looks like, and don’t have time to compare loans, a broker will probably work very well for you. Brokers can also be a great choice if you happen to prefer a more personalised approach to your banking services. They can act as a go-between, sorting out issues between you and your lender directly.
When you submit a home loan application, you will be asked if you want to lock in your mortgage rate or float the rate.
If you choose to lock the rate, you are guaranteeing yourself a certain interest rate on your mortgage. So if the lender says you can lock in an interest rate of 5% on your mortgage today, and you’re happy with that, they can lock it in for you.
This ensures that your rate will not change, even if mortgage rates spike higher over the days and weeks after you lock.
At the same time, this means you won’t be able to take advantage of a lower mortgage rate, assuming they drop even lower as your loan closing date approaches.
Conversely, if you choose to float your rate, you’re essentially telling the lender that you don’t like where rates are at, and want to wait for better.
Or it could just be that your loan approval is still a month away, and you don’t want to lock prematurely and have to pay to extend your lock if it takes longer than anticipated to close.
Either way, your mortgage rate is subject to change until it is locked, so you’re taking a risk, whether calculated or not.
The idea behind comparison rates was to help borrowers understand how any fees or charges would impact an interest rate to help compare loans from different lenders by revealing the true cost of a loan.. Comparison rates are a handy tool but you need to understand how to use it and its limitations.
Remember, that just because a home loan has a low interest rate, it does not necessarily mean you will end up paying less overall. The comparison rate gives a more realistic view but just be careful of solely using it to help you decide which loan is the best one for you. Speak with your lender about their comparison rates to ensure you are getting the best deal for you.