Wednesday, May 10th, 2017
If you’ve saved a deposit and now you’re ready to apply for finance, it’s important that you understand what securing finance really means for you. To help ensure you are on the right track, start with these 8 questions to ask your finance broker:
It’s important to ensure your broker is experienced and professional. Look for a finance broker who is a member of the MFAA (Mortgage & Finance Association of Australia). All MFAA members must hold a minimum of diploma standard qualifications and they also maintain ongoing professional development. The added security for you is that, if anything does go wrong, any complaints you make may be investigated by the MFAA’s Tribunal.
If your finance is for a property – whether you plan to use it as an investment and rent it out or live in it yourself – many finance and real estate experts recommend that you look at around 15 properties to get a feel for the market. It is also recommended you obtain RP Data reports (or similar) on all sale properties.
With any finance, the larger your deposit, the better it is for you. When it comes to property, although there are exceptions, five to 10 per cent deposit is the minimum, with 20 per cent being the recommended deposit amount to help you minimise other associated loan costs.
You may be eligible to apply for a deposit guarantee (for up to 48 months). This is a secondary loan that can cover your deposit, however there are conditions.
Before making an offer on a property or applying for any finance, it’s important you speak to a professional financial specialist to ensure you understand your debt repayment obligations.
To help protect your own investment, it is recommended that you arrange a professional inspection of the property to check for structural problems and possible pest infestations before you buy and there is also the cost of conveyancing.
It is also important to budget for your actual moving costs, including removalists, professional cleaning, as well as any new furniture and fixtures your new property might require.
Most professional service providers offer fixed fees for conveyancing but, in the same way that you can shop around to get the best deal from an experienced finance broker, you can also shop around to compare prices from a conveyancing specialist. Be aware that you can get what you pay for and the cheapest may not always be the best option for you.
Many lenders will require you to pay mortgage insurance – especially if you are borrowing more than 80 per cent of the property’s value.
Your finance broker is a good source of information about this and you can also seek advice from an insurance broker to help you get the best information – and a competitive deal.
Income protection insurance can help – it protects your income in case you become ill and can’t work. You should also ensure you have sufficient home replacement insurance on the property and any contents to cover any unforeseen event.
Choosing a finance or mortgage broker that is right for you is your personal choice. Some basic research to ensure the credentials of the person you plan to work with is a sensible start. Remember – an experienced broker can be a great asset to have in your network of service providers and they are someone you can call on again, each time you have a finance application query.
If you have any questions about your finances, either personal or business, please do not hesitate to contact Loans Actually on (03) 8805-1850 or email firstname.lastname@example.org