Becoming A First Time Home Buyer – 5 Ways A Mortgage Broker Can Help
Are you considering your first home purchase in Melbourne? This is a great time in your life. Keep it this way. Make sure to preserve the positive emotions and evade confusion and loss of money. Make use of Melbourne mortgage brokers, home loan brokers in Melbourne, or finance brokers from Melbourne. They are highly experienced and educated having to complete a Certificate IV in Finance and Mortgage Broking to become licenced, so here are the five ways in which these can help.
1.Help You Prepare
Buying your first home is not a simple thing. Before diving into the financial products, interest rates, and array of financial institutions you need to be prepped. You can start by reading some free online articles on the subject. This is just to get you into the lingo.
Then you will need to determine the parameters of your first home (neighborhood, size, floors, bedrooms, bathrooms, garden, etc.) and the parameters of your home financing can you put up with (initial payments, monthly payments, insurance, interest, etc.)? There is a fine crossing point between what you want and what you will be approved for (or in other words – what you can afford).
An important task in the preparation phase is finding this right crossing point between the home of your dreams and the home which you can afford. Using the help of a professional mortgage broker for this is invaluable. Though compromises will always be necessary, your broker can help you work around many obstacles until your reach just the right mix.
All lenders will require that you submit a deposit for your first home. This deposit is your initial contribution to your home purchase (and of course it reduces the risk for the lender). But how can you save for your deposit? How much do you need?
Again your mortgage broker can help you determine this. They can support you with drafting the plan for your home purchase. Together you can break up the seemingly huge deposit necessary into smaller chunks, which can fit easily into your monthly budget. When you have a goal and a plan to achieve it, it is much easier to get to where you want to go.
2.Have A Pro On Your Side
Sure. Some of you are great financiers. You may also be strong and firm negotiators. You may take the time to study all financial products on the market. However, facing the bank alone is not a good idea.
Believe me, you do not want to face the legal department experts, the financial department experts, the risk department experts, and the sales department experts of the bank alone.
Mortgage brokers are exactly the external support needed when it comes to home buyers. They know the market. The market knows them. They are competent. They are great negotiators. They know all possible scenarios. They usually have a backup plan up their sleeve for you. Just in case.
They will guide you through all the credit and mortgage contracts. They will explain the “small print”. They will support you during the mortgage procedure. They will explain in simple words complex financial terminology. They can even negotiate on your behalf.
You really need someone like this on your side. Do not face the wolf pack alone.
3.Professional Advice
Do you know how an LMI (lenders mortgage insurance) Calculator works and what it shows? Provided you are not a Master in Finance you may need some professional advice. At the very least, you will need this for your first home purchase.
Someone needs to help you understand what you will be paying each month. Someone needs to help you evaluate the interest rate risk. Someone needs to explain why you need a guarantor home loan and who to choose as a guarantor.
Someone needs to provide you with a solution for potential future decreases or loss of income. Actually, someone needs to guide you and provide answers to questions that you will not even think about.
Financial and mortgage brokers are licensed to do all of the above. Sure, you may ask to see their license or do a quiet personal check on them. You can do this online using the ASIC (the abbreviation stands for Australian Securities and Investment Commission) online register for financial advisers.
The license of your financial advisor is a guarantee that the latter has the adequate education, training, and professional qualification necessary to provide you with financial advice. Once you do the check, you are sure that you can rely on competent professional advice for your first home purchase.
4.Shopping Around
There exists a multitude of lenders for home buyers. Virtually any financial institution is keen on providing you with the necessary finance secured against your new home. Multiply their number by ten and you will have a rough idea of the number of financial products targeted at home buyers.
This of course is nice to hear. The competition for you is strong. But which one should you choose? Which one is the best for your needs? Which one carries the lowest risk? Is it possible to secure a no-deposit home loan? Which first-time homebuyer product is the cheapest?
While true, that most loan and mortgage brokers work with a limited selection of financial institutions (working with all will be logistically challenging), these still are much more than you can survey on your own. By providing you with a choice, the mortgage broker is helping you filter down to the best new home funding product for you.
5.Usually Free
The services of mortgage brokers are usually free for their clients. The brokers earn their living from commissions paid to them by the lenders. Hence further to saving money on your first home purchase, the services of the mortgage brokers come for free. What more can a person ask for? Having said that, it is not rude to inquire about any commission owed by you and what you will receive in exchange. Clear this matter and be on your way to your new home.
