What is a mortgage broker?
A mortgage broker is a third party that assists in the financing of your property. In most cases you do not pay anything to a mortgage broker; these services are typically free of charge to the borrower.
What does a mortgage broker do?
Mortgage brokers do all the running around. They find you the most appropriate mortgage they have from a panel of Lenders for your situation and explain each and every loan you receive approval for in plain English.
What can Select A Mortgage do for Me?
More and more Australians are using Mortgage Brokers to guide them through the home loan maze. In the United States of America it is estimated that 70% of loans are introduced through mortgage brokers.
- The first reason for this is that Select A Mortgage will save you money by advising you of the most competitive rates and loan features we have from a large Panel of Lenders which may suit you.
- Secondly, we save you time by bringing the major lenders to you at once, instead of you having to go from bank to bank trying to make sense of it all.
- Thirdly, we explain the loan to you in plain English, so you know you are getting a good home loan.
- Fourthly, we can guide you away from the many potential traps in borrowing money.
- Finally, using a Mortgage Broker is a totally free service, there are no additional charges to your loan at all.
What kind of organisation is Select A Mortgage?
Select A Mortgage is a Mortgage Brokerage. Also called Mortgage Introducers or Mortgage Originators. We bring together a variety of loans from a wide cross-section of lenders and assist you through the process of choosing and applying for a home loan. We do not lend money ourselves, which means we work to look out for your best interests. Mortgages are what we know best, so take advantage of our expertise. After all, its free.
How do I know Select A Mortgage will provide a High Quality service?
Select A Mortgage is a full member of the Mortgage Industry Association of Australia. This means we must adhere to a stringent Code of Ethics:
- To Act with Honesty and Integrity at all times
- To Comply with all the Laws and Regulations relating to the Mortgage Industry
- To Maintain Confidentiality in all Dealings
Which lenders does Select A Mortgage represent?
Select A Mortgage represents lenders who have consistently competitive loan products. Also, we select our lenders to ensure we have a wide number of lender types – banks, credit unions, mortgage managers, building societies – to ensure that you will get a great deal. Why would you go anywhere else? To check out our lenders click here.
Why don't I just go direct to my bank?
When you go straight to the lender you may only receive advice on their standard product line. It is in our interest to advise you of all products, and all available discounts. This gives you the greatest amount of flexibility to meet your needs. By providing this service we hope you will come back to us when need further help, maybe to purchase a second or third property.
We are experts in mortgages and can teach you mortgage minimisation techniques that can save you thousands of dollars and require no extra repayments.
Each bank has one of each type of loan (i.e., honeymoon, standard variable, line of credit, etc.). Knowing what type of loan you need is only half the battle, we assist you in choosing which lender has an appropriate loan with competitive rates and conditions.
I have a good relationship with my bank manager, what more can you do for me than he could?
Individual bank managers do not have the power they did in the past. Assessment of loans is centralised and is simply a numbers game. We know the different discounts each bank is able to give depending on your situation. Also, the banks view us as one big customer because of the large amount of loans we put through them every month and they compete for our business. This means we sometimes have access to discounts and special offers which an individual bank manager can't offer.
How do I know I am getting the best loan?
Different lenders pay us different commissions. The individual broker that is assigned to assist you with your loan will inform you of the commission that we will paid depending on which loan you decide upon. We do this so you know that you are getting the best loan we have available, and not the loan that pays us the most.
How can using Select A Mortgage be free?
As we all know, banks have been drastically cutting staff numbers and closing branches. To cut costs the banks have been forced to outsource their sales force. It is much cheaper to pay us as on a performance basis than to pay a bank manager and keep a branch open. Also, we represent some less well known, but reputable and inexpensive lenders who do not have huge advertising budgets like the banks. We help them keep their costs down.
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Does Select A Mortgage ensure my confidentiality?
Select A Mortgage is governed by the Privacy Act 1988 which enforces the privacy of personal financial information. Your financial, contact or other personal details can only be conveyed to another organisation or individuals outside Select A Mortgage with your express permission.
Should I have a fixed or variable rate?
There are advantages and disadvantages to both. A fixed rate means that even if the Reserve Bank lifts interest rates, your repayments will remain the same for the fixed period of the loan. The opposite is also true, though, that if the Reserve Bank lowers interest rates, your repayments will not decrease. Fixed rates are often helpful for budgeting, as you know what you will have to pay. The disadvantages are that fixed rates often limit or even prohibit additional repayments. The advantage of variable rates is that you can make additional repayments as you wish to pay your loan off sooner.
How does negative gearing work?
Negative gearing is a tax minimization strategy where you have a net tax loss due to receiving less rental income from your investment property than the costs of maintaining that property. This nett tax loss is offset against your salary income, so you pay less tax on your income. Thus, whilst your property is generally increasing in value over time, you are reducing your taxable income.
How does a 100% Offset Loan work?
This type of loan allows you to deposit all of your income into a savings account linked to your home loan account, reducing the amount of interest you pay, and you access the savings account to pay for your living expenses. The longer you leave the money in the savings account without drawing on it, the less interest you pay. The downside is that many lenders charge additional fees or higher interest rates for offset loans.
Should I go for the discount variable rate for the first year?
Generally speaking, taking out a discount variable rate for the first year does not work out the best in the longer term. Often they mean higher interest rates when the discount period is over, and often involve extra charges if you try and change the loan later on. What saves you money now, will probably cost you money later.
What is a Line of Credit?
A line of credit is more like a personal loan secured against your property. The revolving line of credit allows you to draw down to the prearranged credit limit as you require (usually about 80% of the value of your property). This can be great for property investors who can use the one loan to buy and sell property without having to keep re-applying for home loans.
What is a Redraw Facility?
If you have been making extra repayments above the minimum, a redraw facility would allow you to draw on that extra money if you wished, for a holiday or to buy a car for example. This can be a good way of saving, because the extra money that is paid into the home loan is reducing the interest you will have to pay for as long as you leave it in the loan.
Why should I want a Portable Loan?
This allows you to take your loan with you when you sell your property. This means you don’t have to pay new establishment fees and other costs when you buy your new property. This should be considered when you do not intend to stay in your new home for good.
What deposit do I need?
Most Lenders require that you save a minimum of 5% of the purchase price over a 6 month period,as a deposit. We have some lenders who will go as low as 3%. In addition to the deposit your will need to have enough money to cover, stamp duty and other establishment costs. In recent times we have some lenders who will lend 100% of the Purchase Price but require that you have sufficient funds to cover all other costs.
The bigger your deposit the better – If you can make it as large as 20% of the value of the home you want then you will avoid paying a Mortgage Insurance Premium . If you are trying to borrow more than 80% of the value of a property then the lender will probably take out mortgage insurance (which protects them, not you). The premium for Mortgage Insurance can be fairly expensive for you, the borrower.
Can I get a loan if I have bad credit?
Select A Mortgage will do their best to get you a loan irrespective of your credit history. It is important that you notify us of any past credit problems, however, as they will be revealed as the loan process occurs. Also, we have access to 'second-chance loans', for people who have had problems in the past.
What is Mortgage Insurance?
Lender's Mortgage Insurance (LMI) insures the Lender against financial loss if, following the default of a borrower, the sale of the security property does not fully clear the loan. LMI does not provide insurance to the borrower. The premium for LMI increases on a sliding scale based on the loan amount and the Loan to Value Ratio (LVR). The LVR is the ratio between the value of the property and the loan amount. ie a loan of $90,000 on a property worth $100,000 has a LVR of 90% . The higher the LVR the higher the premium. |
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