The Importance of a Mortgage Broker
Getting into the market by securing your first home can be a thrilling, rollercoaster of a ride. There is so much to look forward to, but also so much to consider and organise.
The first thing you need to do is make sure you have someone in your finance corner to guide you through this exciting but daunting experience of arranging your first home loan.
An experienced mortgage broker will work closely with you to determine exactly how much you will need saved, when you need it by and what loan features will suit your first-home purchase. Having a good mortgage broker will make sure you get what you want and need in a loan, ensuring you don’t end up with something you didn’t want or paying extra for features you will never use.
At UNIQ Finance we have drawn on the combined experience of all our team to determine what works best (and what to avoid) to develop a process to ensure we always source the best solution for your individual requirements.
And this is never more important than the time when you are looking to buy your first home and take out your first home loan.
Navigating relevant issues such as the First Home Owner Grant, government stamp duty, genuine savings, mortgage insurance, repayments, loan serviceability and obtaining a pre-approval so you can confidently go shopping or to auction on the weekend are all important things that a buyer needs to understand.
First Home Owner Grant
The FHOG is a national scheme that is administered and funded by the relevant state, so what you get really depends on where you are in Australia. Typically it involves a one-off grant. In Victoria, you can receive $10,000 if you are building a new house valued up to $750,000 if you satisfy the eligibility criteria. It usually must also be your principal place of residence. This means you must intend to live in the home for at least 12 months. The State Revenue Office must be informed if your circumstances change.
Government stamp duty is the revenue levied by states for the ownership transfer of land and its capital improved value and is calculated based on the value of the property. It is paid by the purchaser and is payable to the State Revenue Office. Stamp duty reductions of up to 50 per cent are available for first-time buyers for properties valued at $600,000 or less.
Genuine Savings is a term used by the banks when working out if the funds you have put together for the deposit have genuinely been saved over a period of time. This shows the capacity of the borrower to meet the loan repayments.
This is an insurance policy where the borrower pays a one-off premium. The policy is to compensate the lender in the event of default on the mortgage.
This is the method a lender uses to determine if the borrower has the ability to service or meet the loan repayments calculated by the income and expenses they will have at the time of the loan being taken out.
This is where you make an application to a lender and they make an evaluation on whether the borrower qualifies for a loan, subject to satisfactory property and valuation. This doesn’t constitute a formal loan offer but gives some confidence to the potential borrower when they are out in the market looking at property.
Given the complexity mentioned above, you can quickly see that there is a lot to take in, so your mortgage broker’s eye for detail should help clients reach their financial goals.
If I wanted to summarise the main steps, it would be: Do your research; Align yourself with an experienced mortgage broking firm; and remember that no two mortgage brokers are created equal.
Words: Bryce Deledio