Tag Archives: mortgage brokers

You've heard this a few million times, "If it sounds too good to be true. it's usually is." In the past several years the Mortgage broker released "Magic Mortgages" with "1%" interest rates. These loans were designed for only about 7% of the population, however, some unscrupulous brokers decided to market this to the entire borrowing universe. For that elusive 7%, I can safely say that it's about that many people who truly understand how these loans actually work.

From my own perspective, some of them seem less honest than others, although I have trouble calling any of them particularly fair. The usual suspects you're likely to be familiar with include:

  • No application fee
  • Apply now! For a limited time our variable rate is a low x.xx%
  • Big savings on the Big 4 standard variable rate
  • No fees
  • Low comparison rate
  • Free holidays, plasma or other gimmicks

Let's just take a quick look at a couple of them in detail.

The Option Arm or "Pick-a-Pay" loan works similar to this:

Each month the customer can pick or choose from four different payment options. The first (and most dangerous) is the deferred interest or minimum payment option. This is essentially saying that you may pay only a portion of the interest and defer the remaining, with nothing going to principal. The problem with this loan is the mortgage brokers and customers who fool themselves into thinking this is the best practice. This loan is currently being offered on public access television in the form of poorly produced infomercials. Click here !

Another problem the consumer has is the way these loans are advertised in print, most times without a published APR (annual percentage rate). Not only is this misleading and deceptive practice, it's also against the compliance regulations of the Dept of Banking & Insurance.

The other three options include:

Interest Only, Full Principal & Interest and an accelerated payment designed to lower the term on your mortgage. Interest only, when used correctly can be a decent option for most borrowers. Typically the max period for interest only is 10 years and it is not recommended that you defer principal for that entire period. It is however acceptable to increase occasional cash flow by carefully choosing when not to pay principal.

The last two options:

Full Principal & Interest and accelerated payments is where the "magic" really dissolves. Full P&I payments are based on a fully indexed rate (currently averaging 8%) therefore a far cry from the 1% starting rate. That's right, I said starting rate. This loan will continue to increase in rate since the entire loan is an adjustable rate mortgage. The accelerated payment for most persons is not really an option since you are essentially doubling the Full P&I payment to pay off your loan in half the time.

These loans do, despite all I've pointed out have their rightful place in the lending world. Mortgage brokers Melbourne use these loan to secure second homes and Investment properties. When properly managed these loans can help maximise profits and counter lost rent revenues through vacancies. Even on an owner occupied property, these loans can be very effective, but the underlying theme here is caution.

To conclude:

To "operate" this loan read the entire instruction manual before starting. That way, you fully understand the benefits and any potential downside.

Mortgage brokers Melbourne goal is to help guide you towards the right financial decisions for your family. Get more information and visit this site : mortgagebroker247.com.au

shutterstock_165526292Taking your time to investigate and also determine the right and best mortgage broker for your can spare you lots of money every month. However, it takes quite a lot to find one. To assist you in the search for the very best deals for you, Outlined here is a guide on how you can get the best mortgage deals around.

Step 1: Decide on the kind of mortgage that you want for yourself.

There are quite a lot of things you should decide when trying to get a mortgage for yourself. Firstly, you have to decide on whether you need an interest-only credit or repayment. You should understand that if you picked interest- only, then you will require another plan to settle your debt because your payments will only get to cover the interest cost. To better understand these you need a mortgage broker Melbourne.

On the other hand, repayment mortgage costs more every month, and you also get to settle the original debt through that. Therefore going for a repayment should always be a good idea except you have a better option.

There are also other decisions that you will need to make which includes deciding whether you are choosing a fixed or variable rate mortgage and other minor decisions.

Step 2: have a rough estimate of what you could get

Whatever your decision on choosing either a variable or fixed mortgage, you should begin to look at the rates that you can likely get. This’ll be based on the amount of both your deposit, as well as the property’s worth.

You should note this critical thing that you should “Never go to the bank for a shoddy deal.” This is because your existing bank will present you with only a tiny collection of deals, and not give you so many alternatives. It is also not likely that you will get the best one through this means.

Step 3: Communicate with a mortgage broker

Talking with a mortgage broker is always a good idea. They help you to comb the market and get the best mortgage deal for you. By making use of one, you can quickly cover a huge swing of lenders, and also get additional influence with them to make your acceptance comfortable, and added protection in case things don’t go your way. Looking for a broker to discuss with? visit www.mortgagebroker247.com.au

They can advise you on how to buy mortgages and also about other federal mortgage schemes if you’re eligible. However, you should inform your broker beforehand if that is exactly what you’re looking for.

Also, mortgage brokers are quite resourceful because they have a vast knowledge of the important details about lenders’ criteria. Therefore they will know in case the bank that you have your mind on doesn’t lend on other properties apart from shops. And they'll be able to suggest another lender that can do it.

Most dismiss mortgage broker Melbourne services because they believe it’s a waste of time and energy but in reality they can be excellent services. If you are in two-minds about buying a home and searching for a mortgage you need to talk to a broker. Mortgage brokers are professionals and they can help you in all sorts of way but why should you talk to them? The following are a few factors you may want to consider.

A Mortgage Broker Can Save You Time

The first reason why you should talk to a mortgage broker when buying a home is simply because of the amount of time you can save. Now have you ever tried looking for a mortgage online? It isn’t easy and despite the fact there are a lot of options available, it’s no easy task. You can shop around as much as you like but it takes a lot of time and in the end you can give up. When you go through a broker it essentially saves you time since they are the ones to find the mortgage for you.

You May Not Have To Pay a Fee

Strangely most brokers are paid by the lender or bank in which their clients receive a mortgage which means you don’t have to pay anything. This is actually an amazing idea because you aren’t losing any money. You can use mortgage broker Melbourne services but don’t have to put in a cent which can make you feel better and at ease slightly. There is a big misconception that broker services are going to cost a fortune but in reality mortgage broker fees aren’t paid by you.

Brokers Rely On Their Reputation – They Don’t Play Games

There are a lot of misconceptions surrounding mortgage brokers at the moment but the truth is that most rely on repeat business. They cannot afford to mess around customers because no one will ever them again. Word spreads fast and if they don’t offer the best services then they won’t be in business for very long. A mortgage broker does rely on their reputation and that means they don’t mess you around by playing games; their sole focus is finding the best rates so their clients are fully happy.

Talking You through the Process

Obtaining a mortgage can often be a long drawn-out affair and it can be a very confusing and anxious time. When you look at a mortgage broker Melbourne you know you don’t have to worry.  The broker is there every step of the way and will talk you through what each step involves so that you can be fully aware of what will happen and if you ever need some help, they are there to help.

Speak To a Broker

When you’re buying a home you can easily get a little lost and confused. However this is an important decision and one which shouldn’t be taken lightly. It’s crucial to consider talking to a mortgage broker so that you can get the help and support you need whenever you need it.

Visit http://www.mortgagebroker247.com.au/ for more informations and help.

When thinking about purchasing a property, whether it is your first or fifth time, a mortgage calculator is one of the most important tools you can have to hand.

Mortgage brokers use these tools to calculate loan amounts, interest rates offered by each lender and the length of the loan term. Once you have all of the information, it will calculate exactly how many your repayments will be monthly, annually and throughout the entire term of your loan.

You should also take into account if your fixed rate changes during your mortgage term, this will need to also be calculated as rates and payments may change and you don’t want to be left in the dark.

Another benefit of using the mortgage calculator is to compare lenders rates. Say you are offered an interest rate of 4% from one lender but 3.8% from a second and 3.75% from a third, you can calculate how much of a saving you can make over your complete loan term with just a few easy steps.

The mortgage calculator, in effect, becomes your price comparison website – where you can compare mortgage terms and interest rates from the comfort of your own home. You will be able to see which lender is the most affordable for you and how much money they can save you per month or annually.

For example: A required mortgage of $500,000 over 25 years at a 4% interest rate with one lender equals a monthly repayment of $2,667.16. Now compare the same terms with an interest rate of 3.75% and your monthly repayments reduce to $2,597.15. A saving of $ 70.01 per month, $840.12 per year and a huge $21,003.00 during the entire 25-year term! All from changing the figure on the mortgage calculator which takes about one second. It has now saved you over $21,000.00. Think of the holiday of a lifetime or home improvements you could make with that extra bonus!

Many underestimate the power of the mortgage calculator – while it may not answer all your in-depth questions like your mortgage broker can, it certainly allows you to keep an eye on your money from the very beginning. You will end up going into the mortgage with factual information, knowing exactly how much you can afford to spend each month. This information will allow you to budget for other household bills, such as utilities, taxes, groceries and credit cards.

Obviously as your loan term continues, you may need to refinance or your terms may change - you may even decide to change lenders half way through. This cannot be taken into account with a calculator, a mortgage broker can navigate you through these areas, but it does get you off to a good, solid start.

Mortgage Calculator

Some mortgage calculators also calculate the differences between principle and interest only mortgages and repayment figures; this is a helpful tool as well, giving you greater insight into the difference in monthly and annual payments. With principle and interest only payments bear in mind there will be a final balance to pay when your term completes.

If you need some assistance working out long term mortgage payments, mortgage broker Melbourne can help. You can contact them via http://themortgagereports.com/20857/mortgage-calculator-find-your-home-price

One of the most important questions to ask yourself when applying for a mortgage is: Is your credit worthy? All lenders and mortgage brokers use information lodged on a credit reference database to check if you are high or low risk for credit. If your credit history is less than perfect – it is better to be upfront about it straight away, the mortgage brokers may have alternative financial options. Also, all mainstream lenders don’t score in the same way, what is acceptable to one, may not be to another – being honest about your situation ensures that no time is wasted pursuing an option which will just fall flat at the final stages.

It’s a good idea to check your credit report annually, that way any anomalies can be dealt with immediately and won’t affect your credit worthiness long term. You can apply for a copy of your credit report for free if you can afford to wait 10 days. Fast track options are also available for a fee.

Credit reports hold such details as your full name, date of birth, current and previous addresses and any employment details. If you reside with a partner and have applied for credit with them before, their name and details will also appear on your report.

When you approach a mortgage broker and application is made for your credit file, they will be looking for any “red flags” on which the lender could reject your application for a loan.
These include any defaults which are still outstanding and haven’t been repaid, any bankruptcies, court judgements, debt agreements or personal insolvency agreements in your name.

They also look at your information repayment history, if you have had financial issues in the past but have worked hard to rectify the situation and repaid any outstanding debts it’s likely to go in your favour. This is especially true if you have demonstrated regular payments and had no further issues since.visit this page for more updates.

So what is a good example of an acceptable credit score for a mortgage?

A good credit score is logged when you keep up to date on all payments; you have no arrears and already have finance which is being fulfilled. Your past credit activity, particularly over the past 12 months will be highlighted – although this may also go back for up to 5 years.

Lenders will acknowledge a good credit score if you have employment stability in a low risk category job, if you have stayed in the same role for several years it shows your commitment and character.

Another good example is residential stability –do you already own your own home? Do you have finance which is being fulfilled? Have you stayed in the same property for a few years or do you move around a lot? Mainstream lenders like stability in all aspects of your life.

Mortgages

Each lender uses a different credit scoring technology – they have their perfect customer patterned out in a set of algorithms and this ultimately decides whether you get a mortgage or not. Some lenders are more lenient and allow for a few blips on the radar, but you may find their interest rates are slightly higher because of this.checkout latest news at http://www.telegraph.co.uk/business/2016/06/10/banks-face-crunch-from-falling-house-prices-cheap-mortgage-rates/

Don’t be disheartened if you have clean credit and have been rejected by one lender. It may be that you work in a high risk industry or don’t have a credit card balance and their algorithm wasn’t certain. In these cases, that lender wasn’t the right fit for you – your mortgage broker in Melbourne will help you find one which is.