10 questions to ask your mortgage broker

You’ve saved your deposit and you’re ready to start looking at properties, but have you considered all the details? Here are 10 questions to which you need answers.

1. How do I choose the right finance broker?

Look for a finance broker who’s a member of the MFAA (Mortgage & Finance Association of Australia) or FBAA (Finance Brokers Association of Australia). MFAA members must hold diploma standard qualifications and maintain continuing professional development. Plus, should anything go awry, your complaints may be investigated by the MFAA’s Tribunal. Phil Aldridge has been a member of MFAA since 2008.

2. How many properties should I look at before buying?

A good rule of thumb is to inspect at least 15 properties to get a feel for the market and also check Core Logic property reports on sale prices.

3. How much deposit do I need?

The larger your deposit, the better. Sometimes you can secure a property with just a few hundred dollars’ deposit, but most markets still require at least five to 10 per cent deposit and sometimes 20 per cent.

4. What if I’ve just found the perfect property, but haven’t finished saving the deposit?

If you are a first home buyer you may be able to apply for a Government Scheme that may require only a 5% deposit plus costs,

5. Am I eligible for any grants or schemes?

Ask your Phil if you are eligible for the First Home Owners’ Grant or Federal Guarantee Scheme. The answer will depend on the value of the property, whether you are purchasing it with help from your parents, whether and how long you intend to live in the property, whether it is the first property you have purchased and more.

6. Do I have to pay stamp duty?

Yes. There’s stamp duty payable on the property. You may be eligible for a rebate or a reduction if you are first home buyer.

7. What other costs should I allow for?

You need to have the property inspected for structural problems and pests before purchase and you may need a solicitor or a conveyancer – a specialist property lawyer. Then there is the cost of actually moving out of one property and into another – allow for removalists, cleaning and any new furniture and fixtures the new property requires.

8. Can I negotiate the fees of a solicitor or conveyancer?

Of course and just as you will when choosing the right finance broker, you may want to shop around, meeting with two or more such providers.

9. Do I need mortgage insurance?

Most lenders will require you to pay mortgage insurance if you are borrowing more than 80 per cent of the property’s value.

10. What other insurance will I need?

Check with your Phil as to when you become liable for building insurance. You may also want to think about income protection insurance in case you become ill and can’t work.

This information has been prepared by PHA Financial Services and does not take into account your objectives, financial situation or needs. Before acting on this information you should consider whether it is appropriate to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The information provided was accurate at the time of publication and changes in circumstances after a document is published may impact on the accuracy of information. Some information may have been collated from various third parties and we make no assertion that the information was originally ours.