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Expert Advice Will Get You The Best Home Loan

inheriting a home

The easiest way to apply for a mortgage is with your existing bank, but it will probably not be your best home loan. However, shopping around for a better deal may not end well unless you get expert advice from a mortgage broker due to the volume of mortgage products and qualification requirements.

There’s the deposit, aka down payment amount, to consider, the mortgage interest rate, and also, there may be a need for mortgage insurance. Understandably, you might be a little overwhelmed by what you need to know to find the best mortgage for your requirements.

Don’t worry; you’re not alone; first home buyers can end up with the wrong home loan when they fail to use a home loan adviser aka mortgage broker. Additionally, homeowners keen to invest in property can end up with the wrong loan. If you’re sitting on the fence about how you will find a home loan, consider these five reasons why you should work with a home loan broker.

Get The Right Home Loan

Homeowners and first-home buyers are not in tune with market conditions like mortgage brokers. When you work with a highly experienced home loan advisor, you get their knowledge of the property market and an in-depth understanding of what aspects of mortgages are relevant to your requirements so you get the best mortgage deal.

What makes up a home loan?

  • Deposit (down payment)
  • Loan amount
  • Interest rate
  • Loan term
  • Fees
  • Repayment terms

The deposit is the amount the borrower provides towards the home purchase. As it is usually a percentage of the loan amount, this is where a good mortgage broker’s advice is invaluable. For example, a broker will let you know the higher the down payment, the lower the loan amount and monthly payments. Or you can borrow more with a higher deposit if you can afford the monthly repayments.

Your debt-to-income ratio (DTI) is used as the loan-to-value (LVR) in calculating your home loan affordability. Property investors know their DTI and LVR before purchasing more rental properties. However, homeowners and first-home buyers are not, and this is where a home loan advisor is valuable to them.

To win their business, lenders will offer better rates to brokers with large customer bases. Even when lower interest rates are not on the table, brokers can usually get you reduced fees or other favourable payment terms that may not be available to individual borrowers.

Therefore, securing the right loan is not limited to getting a low-interest rate. The loan term, type of loan, and the borrower’s credit score are also key considerations for borrowers getting the right home loan.

Credit Score Financial Considerations

Different financial situations may mean different home loan agreements. For example, if you’re working as a doctor, your finances would not look alike to someone who works at a typical corporate job. Typically, the home loans for doctors may be different as well.

Therefore your occupation and finances determine what type of mortgage products are available. If your financial profile isn’t quite like the general population, your loan application may require a different approach, which an expert home loan broker can help you with.

A mortgage broker can be invaluable if you are in a tricky situation or have a problematic employment history when securing a home loan. For example, you may be self-employed, have a low credit score, or have recently changed jobs or careers, making obtaining a mortgage through traditional means challenging.

Brokers can help connect you with specialist lenders more willing to work with borrowers in non-traditional situations, increasing your chance of getting approved for a loan. By leveraging their knowledge and connections, mortgage brokers can help you overcome any issues standing in the way of homeownership and help you achieve your dream of owning a home.

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Mortgage Application Process

Qualifying for mortgages can be challenging in Australia.  Much bureaucracy is involved, which can easily lead to a rejected loan application if you lack the needed documentation. This can be frustrating and even devastating if it means losing the chance to own your dream home.

If you’d like to play it safe, consider enlisting the help of a home loan broker, as they can help a lot with making sure that your mortgage gets approved. They’re also much more willing to advise on whether you can afford a house with your current financial situation and work on a solution that will allow you to get a suitable mortgage despite any limitations holding you back.

Working with a home loan advisor or broker for your mortgage is one of the best investments you can make, especially if you’re a new homeowner. They can help you qualify for the mortgage that fits your financial condition and guide you through the home loan process from start to finish.

Furthermore, home loan brokers work with many lenders. The loan advisors at the top of their game will have established relationships with first-tier (banks) and second-tier lenders, where they can negotiate better mortgage rates and terms on behalf of their clients.