10 questions to ask your Mortgage Broker

You’ve saved your deposit and you’re ready to start looking at properties, but have you considered all the details? Here are 10 questions to which you need answers.

Q1 - How do I choose the right Mortgage Broker?

Look for a Mortgage Broker who’s a member of a respected industry body, such as the Finance Brokers Association of Australia (FBAA) or the Mortgage & Finance Association of Australia (MFAA). Members of these professional bodies must hold diploma standard qualifications and maintain continuing professional development. Should anything go wrong, your complaint may be investigated by the professional body at a tribunal.

Q2 - How many properties should I look at before buying?

A good rule of thumb is to inspect at least 15 properties to get a feel for the market and also to check RP Data reports on sale prices.

Q3 - How much deposit do I need?

The larger your deposit, the better. Most residential real estate markets in Australia will require at least 5% to 10% deposit and sometimes 20%.

Q4 - What if I’ve just found the perfect property, but haven’t finished saving the deposit?

You may be able to apply for a deposit guarantee (for up to 48 months). This is a second loan that covers the deposit.

Q5 - Am I eligible for any grants?

Ask your Mortgage Broker if you are eligible for the First Home Owners’ Grant. The answer will depend on the value of the property, whether you are purchasing it with help from your parents, whether and how long you intend to live in the property, whether it is the first property you have purchased and more.

Q6 - Do I have to pay stamp duty?

Yes, and there are two kinds. There’s stamp duty on the mortgage itself and on the property. You may be eligible for a rebate on the second type, so be sure to ask.

Q7 - What other costs should I allow for?

You need to have the property inspected for structural problems and pests before the purchase and you may need a solicitor or a conveyancer – a specialist property lawyer. Then there is the cost of actually moving out of one property and into another – allow for removalists, cleaning and any new furniture and fixtures the new property requires.

Q8 - Can I negotiate the fees of a solicitor or conveyancer?

Of course and just as you will when choosing the right Mortgage Broker, you may want to shop around, meeting with two or more such providers.

Q9 - Do I need mortgage insurance?

Most lenders will require you to pay mortgage insurance if you are borrowing more than 80% of the property’s value.

Q10 - What other insurance will I need?

Check with your Mortgage Broker to ascertain when you become liable for building insurance. You may also want to think about income protection insurance in case you become ill and can’t work.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.