10 Questions to Ask a Mortgage Broker
7-MINUTE READ
Buying a house is a stressful business. Arranging the finance, searching for a property you love, and securing the house at a reasonable price. What could go wrong?
Allow a mortgage broker to help make some of the property buying process easier to digest. Odin Mortgage’s professional brokers will take care of your home loan and find you a great deal with an amazing lender!
Odin Mortgage specialises in Australian home loans for expats and foreigners down under. We know the best lenders for your situation, regardless of the country you currently work in!
But, what questions should YOU ask a mortgage broker at Odin Mortgage? Here are our top 10 questions for you to ask your expert mortgage broker.
1. What Does a Mortgage Broker Do?
A mortgage broker finds the best home loan deal for your personal situation. Mortgage brokers are third party intermediaries and will arrange the perfect home loan between you and a lender.
If you search for a home loan independently, which lender would you choose? You may pick a well-known lender and accept the home loan they offer. Are you aware of the vast number of lenders and home loan products that are available on the market?
A broker will search from a wide database of lenders and assess varying home loan deals for you. We will also negotiate deals with lenders on your behalf so you receive the best interest rates and terms!
2. How Does a Mortgage Broker Get Paid in Australia?
Some mortgage brokers will ask you to pay a fee to use their service. Various brokers in Australia will charge a fee of 7% of the amount of money borrowed. So, you may need to pay a fee of $3,500 if you borrow $500,000 towards buying a home.
Odin Mortgage does not charge a fee! We recover our fee from the lender and so our service is free for you to use!
Our service is completely impartial, however, and we strive to find you the best home loan deal.
Get a free Australian mortgage assessment today.
3. What Is the Difference Between a Mortgage Broker and a Mortgage Lender?
A mortgage broker is a third party intermediary and aims to get you a great deal. Your interests are important to the broker and we will search all lenders and their available deals.
A mortgage lender lends you money to buy your home. They are a financial business looking after their own interests. They may only tell you about the deals that they want you to know about.
4. What will a Mortgage Broker Want to Know?
When you first contact a mortgage broker, you will need to prove a range of information.
Here is a checklist of information your mortgage broker will want to know:
What Will Your Broker Want to Know? |
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You will need to prove your ID and explain your employment status and your yearly income.
In addition, you must highlight any assets you own along with expenses and debts you are liable for.
You will also need to tell the broker how much deposit you are placing on the property.
Your mortgage broker will need to calculate your borrowing power and determine the amount of money a lender may lend you. You can find this out now using our expert Borrowing Power Calculator!
They will want to know your credit card limits, even unused limits. This is because even unused credit card limits count against your borrowing power.
Your broker will also want to know what location you want to buy a property in. Across Australia, different states and territories have different rules and guidelines to follow. Your broker will need to ensure that their advice matches the local region.
A mortgage broker may also want to know how much you are hoping to pay each month. What monthly repayments are manageable?
It is advisable to place a threshold on mortgage repayments at 30% of your monthly income. However, this is not always possible, depending on the area you wish to locate and the size of your deposit.
Check out our Monthly Repayment Calculator to estimate your monthly mortgage repayments today!
Your mortgage broker will also need to know your current resident status. Are you an Australian citizen living overseas, or are you a foreign investor looking to buy property in Oz?
Finally, what is your credit score? A credit score above 650 is a good credit score for Expats in Australia.
However, remember that the credit reference agencies Equifax, Experian, and Illion use different thresholds. Your score may differ depending on the credit reference bureau a lender uses.
Odin Mortgage can help you whatever your circumstances! Read our mortgage broker FAQs now for more information and understand how we can help you.
Get a free Australian mortgage assessment today.
5. When Should I See a Mortgage Broker?
Visit a mortgage broker as soon as you begin considering buying a home. If you are an Australian Expat looking to buy a property in Australia, request a call from an Odin Mortgage broker immediately!
We are experts in Expat mortgages and can help you with the entire process. Are you entitled to any Government incentives? If you are an Australian citizen and a first home buyer, you may be able to apply for incentives.
6. Can a Mortgage Broker Help Me WIth Government Incentives?
Odin Mortgage brokers possess up-to-date information regarding the latest incentives available in Australia.
We will help you understand if you are eligible to apply for any assistance that could help your home loan application.
Home Loan Deposit Guarantee
Providing you are an Australian citizen, you may be able to apply for the Home Loan Guarantee scheme.
You must earn under $120,000 per year and be a first home buyer buying a new home. If applying as joint applicants who are married or in a de facto relationship, you can earn $200,000 combined.
You will be able to pay a small 5% deposit, with the Government guaranteeing the remaining deposit.
This means that you do not have to pay lenders’ mortgage insurance as you are paying less than a 20% deposit. Usually, paying LMI would cost you an additional monthly expense. It is an insurance cost in case you default on repayments without sufficient equity in the property.
You could reduce the deposit further to only 2% if you are a single parent with at least one child. You can earn up to $120,000, not including any child maintenance payments. Additionally, you do not have to be a first home buyer and the property can be new or existing.
There are only a certain number of places on the scheme, however. We can help you apply with an approved lender, if you are eligible.
First Home Owners Grant
You could be entitled to a First Home Owners Grant if you are a first home buyer in Australia. States and territories differ, although in Western Australia the grant is worth $10,000.
You must intend to live in the property, however, and will need to pay the grant back if you do not live there.
You can use the grant to contribute towards your deposit, your fees, or stamp duty.
Stamp Duty Waivers
Stamp duty will cost you tens of thousands of dollars. The amount you need to pay will vary on the state or territory you are buying in, and the property value. Check out our Stamp Duty Calculator today and discover how much stamp duty you need to pay!
If you are a first home buyer in New South Wales, however, you can claim a stamp duty waiver. This means that you will have zero stamp duty to pay, saving you a large sum of money!
7. Should I Contact a Mortgage Broker as an Expat?
Yes, Odin Mortgage’s professional brokers are Expat experts and are waiting for you to get in touch!
We know the best routes to take for Expats wanting to buy a property back home. Sometimes the difficult part of an Expat application is which currency you earn your income. Some lenders look favourably on some currencies rather than others.
In particular, the US dollar and British Pound Sterling are assessed favourably by lenders. You may be able to use up to 100% of your earned income from those countries towards your home loan application.
Lenders may only allow 60% – 70% of a currency to be considered in your application. One reason for this is that Australian tax rates may be applied. The stability of the currency is another issue.
We will negotiate the best deals for you with lenders! We will negotiate higher amounts of foreign income to be included in your application, increasing your borrowing power.
Get a free Australian mortgage assessment today.
8. Should I Contact a Mortgage Broker as a Foreign Citizen?
Yes, Odin Mortgage brokers are fully skilled in securing Australian mortgages for foreign citizens! The process is slightly longer and more expensive, but it is possible!
Higher Interest Rates
Lenders will usually offer higher interest rates to foreign citizens, however. You may need to pay interest rates of around 8%. However, our experts will negotiate the best rate possible.
Larger Deposit
You may need a larger deposit to place on a property. A 20% deposit is usually accepted by lenders for Australian citizens and permanent residents.
However, a 30% deposit is more likely to be accepted for foreign citizens.
Foreign Investment Review Board
As a foreign citizen, you will need to apply for approval from the Foreign Investment Review Board. The FIRB oversees foreign investment into Australia to ensure that resident Aussies still have opportunities to buy homes.
Your application will cost several thousand dollars, with the price rising considerably for more expensive properties. You can still bid for a house that is listed, however, although your bid with state FIRB pending.
It is vital that you apply properly and timely with the FIRB. You could face a fine of up to $3,300,000 and up to 10 years in prison if you default.
Stamp Duty Surcharge
An additional cost is the stamp duty surcharge. Stamp duty costs a home buyer in Australians of thousands of dollars. The precise amount varies according to the property value and the state or territory you are buying in.
There are stamp duty waivers available in states such as NSW. Although, this is for first-home buyers who are Australian citizens or permanent residents. Foreign buyers are not eligible.
Unfortunately, as a foreign buyer, you will need to pay a stamp duty surcharge on top of the standard stamp duty rates. This is typically 7% to 8% of the property purchase price.
For example, suppose you are buying an $800,000 property in NSW as an Aussie resident. You will pay $31,600 in total for stamp duty fees. For the same property as a foreign buyer, you will pay a staggering $95,600.
Luckily, Tasmania, Northern Territory, and Australian central Territory do not charge a foreign buyer surcharge. Buying in these locations will save you a substantial amount of money!
9. Are You a Regulated Mortgage Broker?
Odin Mortgage are Australian Credit Licence holders and are regulated to act as brokers for you!
However, not all mortgage brokers will hold the necessary certification. Check if your broker is a credit representative of a financial institution.
Contact Odin Mortgage and work with brokers you know you can trust!
A good mortgage broker will know the mortgage industry inside and out. We liaise with different lenders regularly and maintain knowledge of the latest home loan news.
10. What Type of Mortgages Are Available?
You can choose from a fixed rate, a variable rate, or a split rate mortgage.
A fixed interest rate mortgage involves paying a fixed interest rate over a specific time period, e.g. 2 years. You know how much you will need to pay monthly and the rate will not fluctuate.
You will need to pay an exit fee if you want to switch deals or sell the house during the fixed term, however.
A variable interest rate will offer you a lower interest rate, but the rate may fluctuate and is unpredictable. You will have no exit fee to pay if you decide to switch or sell, however.
A split-rate mortgage fixes a portion of the loan for security. The remaining portion is variable to offer you flexibility.
Compare current mortgage rates today and discover the best types of mortgage for you!
Get a free Australian mortgage assessment today.
Contact Odin Mortgage Today!
Odin Mortgage’s expert brokers can provide you with guidance to begin your home loan application. Whether you are an Australian Expat or a foreign homebuyer, contact our mortgage broker professionals now!
Our mortgage brokers will approve your home loan purchase, and can also help you to refinance an existing property!
Find out further how Odin Mortgage can help you by reading our mortgage broker FAQs today! Ask your mortgage broker now and get one step closer to credit approval!
Frequently Asked Questions
Can I apply for an Expat mortgage without a broker?
You can apply for an Expat mortgage without a broker but it is advised to seek an expert broker’s help.
The system is confusing unless you are an expert in this field. Some lenders may take advantage of your situation and charge a higher rate than necessary.
We will negotiate a great deal for you! Contact Odin Mortgage brokers today for a professional broker service!
How much can I borrow?
The amount you can borrow depends on your borrowing power. Calculate your estimated borrowing power today using Odin Mortgage’s Borrowing Power Calculator!
Your borrowing power will be impacted by your credit score so check your credit score regularly. Try to improve your credit score by paying repayments on time and clearing your other debts.
Close any unused credit card limits, also. Even credit limits that you have not used will count against your borrowing power and decrease the amount you can borrow!
How long will my home loan application take as an Expat?
If you provide all evidence at the beginning of the application process, we will endeavour to complete your home loan quickly!
However, the precise amount of time taken will depend on your circumstances and the lender.
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