Finance focus
6 key questions to ask your mortgage broker

In the wake of 13 consecutive cash rate hikes through 2022 and 2023, many aspiring homeowners and current mortgage holders have been left feeling uncertain.

You might be concerned about whether your dream of owning a home has been temporarily derailed. Perhaps you’re questioning how competitive your current interest rate is, or what steps to take towards your property investment goals.

In such times, having a skilled professional by your side is invaluable. Mortgage brokers are equipped to guide you through your property journey, amidst the current market conditions. Here are several questions that we encourage you to ask us.

1)  Why should I use a mortgage broker?

Our role extends beyond connecting you with lenders, offering insights beyond loan processing.

2) How much am I eligible to borrow?

Your borrowing capacity is influenced by various elements including your deposit, savings history, income, expenses, equity, and credit score.

Some banks have previously revised their lending criteria to minimise high-risk lending, impacting how much you can borrow. It’s important to speak to us to get a clear picture of your borrowing capacity.

3) Is now the right time to buy a property?

Whether you should buy now depends on your specific financial situation and goals. While some may benefit from current opportunities, others might find it better to wait. Let’s discuss what’s aligned with your current situation.

4) Should I consider fixing my loan rate given the market conditions?

Choosing between fixed and variable rates is a personal decision, influenced by your financial goals and market outlook.

Locking in a fixed rate might seem appealing for budgeting your repayments. However, this decision should be made with a clear understanding of the terms, including potential limitations and fees for early exit.

5) How do I use my equity to buy an investment property?

If your home’s value has gone up or you’ve paid down what you owe on it, you might be able to refinance and use that equity to fund purchases such as an investment property.

Let’s say your house is worth $850,000 and you’ve got $420,000 left on the mortgage. That gives you $430,000 in equity.

You can use that equity as security to borrow for things such as renovating your home, or even a new car.
Banks typically let you borrow up to 80% of your home’s value, less the debt you’ve still got on it (this is your “useable equity”). You may be able to borrow more if you take out Lenders’ Mortgage Insurance.

6) How does bridging finance work?

Bridging finance might be a suitable option if you’re in the process of buying a new property while awaiting the sale of your existing residence. It can also provide funding to construct a new home while you reside in your current home.

This form of short-term borrowing supplements your main mortgage and is generally structured as interest-only until your property is sold and the principal can be repaid in full.

While bridging finance can provide the flexibility to purchase your next property without the need to align settlement dates precisely, it’s crucial to consider the associated costs. We can discuss whether this option is right for you, or we may suggest alternatives.

Got more questions?

It’s normal to have questions or feel a bit cautious as part of your home loan journey. But you don’t have to sort it all out on your own.

We’re here to support you and clear up any questions you’ve got. Reach out to us today.

The information provided is general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.