Q. WHY WOULD I USE A MORTGAGE BROKER?

A.   BECAUSE THEY CAN SAVE YOU TIME AND MONEY.

As the Home Loan market becomes increasingly complex, more people are turning to Mortgage Brokers. Here are some of the reasons.

  •  Mortgage Brokers can save time

The choices now available in the Mortgage market can seem limitless and completely overwhelming. You can choose to research the subject, the Lenders and their products yourself, or work with a Mortgage Broker who already has that knowledge.

  •  Mortgage Brokers give you choice

All Mortgage Brokers have a panel of Lenders from which they recommend a loan. They have to become accredited with the Lender to offer their product, and are required to keep up-to-date with their latest offers.

  •  Mortgage Brokers can help find the right loan

The best deal is not necessarily the cheapest rate. A good Mortgage Broker will examine your circumstances and future plans to recommend a loan that is right for you. Having an appropriate loan which works for you can help you build wealth.

  •  Most Mortgage Brokers don't charge you

Most Mortgage Brokers don't charge a fee for their service as the Lenders pay them a commission for the loans they write. Most Lenders offer the same rate via the Mortgage Broker as they would directly, and a Broker could save you money in other ways.

  •  Mortgage Brokers can help you avoid pitfalls

Many products seem to offer a great deal but they could have penalties, fees and charges you may not be aware of. Or, they may not offer the flexibility you require in the future. A Mortgage Broker can help you avoid taking out a loan you might later regret.

  •  The only Mortgage Brokers to deal with: MFAA members

A good Mortgage Broker can save you time and money, and give you peace of mind. But, remember, only work with Mortgage Brokers who are members of MFAA - they are the Essentials of Borrowing.

Q. WHAT IS ONE THING I NEED WHEN I BORROW?

A. An MFAA member.

When most people look for a Mortgage, Home Loan or Business Finance, they're pre-occupied with numbers - who's offering the lowest interest rate? But in choosing the right Mortgage Broker, Finance Broker or Lender, there's something else you should be looking for. The right letters: MFAA.

Raising the bar for Mortgage & Finance Brokers, Aggregators and Mortgage Managers.

MFAA stands for the Mortgage & Finance Association of Australia.

Formerly known as MIAA, MFAA was formed to raise standards among Mortgage & Finance Brokers, Aggregators/Franchise Groups & Mortgage Managers. It is now the peak industry body, representing over 12,500 Mortgage, Home Loan and Finance Professionals across the country.

MFAA Approved Mortgage & Finance Brokers

To be approved (accredited) by MFAA, Mortgage & Finance Brokers must satisfy rigorous criteria on education, experience and ethics. To remain a member, they must demonstrate they have maintained those standards and kept up-to-date with the latest Mortgage and Finance Industry developments.

So when you choose an MFAA Approved Mortgage Broker, Finance Broker, Mortgage Manager or Aggregator/Franchise you can be sure you're dealing with someone who has demonstrated knowledge, experience and integrity.

Mortgages & Home Loans: only with an MFAA member

Whenever you borrow through a Mortgage Broker, Finance Broker, Mortgage Manager or Franchise Group, ask if they are a member of MFAA. They are the Essentials of Borrowing. To learn more about Mortgages & Business Finance, talk to an MFAA member.

Q. SHOULD I HAVE A FIXED RATE, VARIABLE OR SPLIT RATE?

A. That depends on who 'you' are.

When you take out a Mortgage or Home Loan, you can choose to have an interest rate this is fixed, variable, or split (a combination of the two). There is no right or wrong option - it all depends on your circumstances.

  • Fixed Rate Home Loans

With the Fixed Rate Home Loan, the interest rate on your Mortgage doesn't change for an agreed period (usually 1-5 years) - no matter what happens to official interest rates.

  • Variable Rate Home Loans

With the Variable Rate Home Loan, the interest rate on your Mortgage can change. If official interest rates go down, your interest rates go down too. However, if the Reserve Bank increases interest rates, your Home Loan rate will probably rise too.

  • Split Rate Home Loans

A Split Rate Mortgage combines elements of the Fixed Rate and Variable Rate options. e.g. You can have 80% of your Home Loan at a Fixed Rate , while the remaining 20% is at an interest rate that varies with the market.

Which Home Loan interest rate option is best?

Because it is absolutely predictable, the Fixed Rate Home Loan can give you greater confidence that you can meet your Mortgage repayments regardless of changing economic conditions. The disadvantage is that it generally lacks flexibility.

If official interest rates fall, the Variable Rate Home Loan can save you money, but you need to consider the risk that your Mortgage payments could rise in the future. If you are contemplating a low introductory or honeymoon rate for an initial period you will save initially, but you must find out what the rate will be when the 'honeymoon' is over. The lowest initial interest rate doesn't always mean the better deal.

The Split Rate Home Loan gives you some of the benefits of both Fixed Rate and Variable Rate loans. You won't save as much as a full Variable Rate loan if interest rates fall, but neither will you be as exposed if interest rates rise.

Home Loan interest rates: you need to know more

To understand more about which Home Loan interest rate option is appropriate for you, talk to an MFAA member today - they are the Essentials of Borrowing.

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