There’s nothing worse than walking out of an important meeting, only to realise that you forgot to ask some important questions.
One of the most important meetings you will have when you enter the property market is your initial meeting with a mortgage broker.
In order to get the most value out of your appointment, and improve your chances of being approved for a loan, you need to come along prepared to answer a host of questions about your finances and your living situation.
But don’t forget to ask some questions of your own. After all, the goal is to find the right loan for you, which won’t happen if you don’t speak up. When meeting with your mortgage broker, remember to ask:
Which loan is right for my situation?
There are a range of loans available but your mortgage broker should be able to help you decide which ones best fit your lifestyle.
What is my borrowing power?
This is usually based on your income and financial commitments, and it can vary greatly from one lender to another.
What percentage of the property can I borrow?
It’s important to know how much you need to put down as a deposit, and also whether you need to pay other upfront costs, or whether they can be included in the loan amount.
Will I have to take out LMI?
Lenders Mortgage Insurance covers the lender in case you become unable to make your repayments, and there is a shortfall when the property is sold. Some lenders require borrowers to pay this amount upfront.
Which loan offers the best rate?
Some loans might offer a good introductory rate, but it’s important to look at the ongoing rate once the honeymoon period is over.
What flexibility does the loan offer?
Can I make changes down the track? What if I want to make a lump sum payment in the future?
Is the rate fixed or variable?
Variable rates are usually lower, but keep in mind that they can change frequently. Fixed rates are a little higher but they provide some certainty for those on a strict budget. However fixed rate loans are usually a lot less flexible than variable rate loans.
What will my repayments be?
It’s important to look at your budget and make sure you’re not over-committing yourself.
How much is the loan establishment fee?
This is another cost that is often payable upfront, so you will need to ensure that you have funds available at settlement if this is the case.
Are there any ongoing fees associated with the loan?
Monthly account keeping fees can vary between lenders so it’s important to make sure you compare your options.
Are there any conditions to be aware of such as discharge costs, fees to change the loan?
Not asking this question could be very costly if you’re planning to refinance down the track, or make a significant lump sum payment in a few months.