Mortgage Broker 101 — Simplified For Beginners

Mortgage Broker 101 — Simplified For Beginners

what does a mortgage broker do

What does a mortgage broker do?

A mortgage broker is used by home buyers and investors to access the largest source of mortgage loans. In simpler terms, they help first-time home buyers, home up-graders and refinancers in finding the perfect home loan for their needs and in closing them.

There are a variety of mortgage providers in the Australia — there are literally hundreds of thousands.

This wide variety of products available includes interest only payments, repayment, and interest only loans. This is where brokers come in; they work with lenders to find the right mortgage product for you based on your individual needs.

A broker’s job is to give you an honest assessment of the mortgage loans available to you and advise you as to which product will give you the best return on your investment. In most cases, brokers receive commissions on each product they sell.

So in most instances the brokers services are free to you — the mortgage provider pays the commission to the broker.

Mortgage brokers typically work with mortgage providers from a list of hundreds of lenders.

As the number of lenders increase, so do the types of products offered by them. Some lenders specialize in certain types of products, such as variable rate mortgages, credit mortgages or even low-doc mortgages.

So in the end, you’ll have to do some research to find out which lenders provide the product you need and to get the best deal.

How do I know what my mortgage options are and what they’ll cost?

You’ll get a complete overview of your mortgage options from your broker at the time of your application.

Brokers are not permitted to provide personal advice to you without any assessment. Instead, the mortgage broker takes it upon themselves to assess your financial position and then advise you on the product that will give you the best return.

The good news is that regardless of what type of mortgage you have or want, you can still use a broker’s services to shop for the best interest rate and package deal.

By using a broker you will have a good general idea of the mortgage options and any additional costs involved that may come your way in advance. Read our article about the 9 things to consider about home loans and the different mortgage options by Moneyhelper.

mortgage broker

What are the merits in having a broker when it comes to mortgage lenders?

Mortgage brokers may also be referred to as “non-traditional mortgage brokers” or “altra lenders.”

They have access to many lenders through their connections with a major online mortgage aggregator. This aggregator often times acts as the “underwriter” for the application, so you’re only going to get an almost unlimited number of lenders to choose from.

Since these brokers are paid by the lender, you’ll typically have better rates and terms available to you than you would when you go to a traditional lender directly.

Another advantage of hiring brokers is that they often work as independent contractors rather than being employed by a specific lender. They will get paid for their services once they find a loan for you.

There are some disadvantages, to using mortgage brokers, of course.

Most of them get paid based on the money they refer you to lenders. Since most people rarely know how much a specific product or service is worth until they try it themselves, some people could occasionally  wind up paying more than is necessary.

The bottom-line in mortgage loans:

In general, a mortgage broker does all the shopping around for you.

They contact the different lenders to work out the best deal for you. Sometimes though, they may charge you a fee for this service (vary rare though). Brokers receive payment from the lenders for their services, so they are often willing to forgo fees to the customer.

Overall, brokers are quite useful because they allow you more control over the loan process and can save you a lot of money.

If you need a mortgage quickly but don’t want to use the traditional process, you may be able to get a better deal this way. Typically however, you should not pay any fees to a broker unless you absolutely need to.

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Your First Mortgage Loan: 9 Important Criteria To Consider

Your First Mortgage Loan: 9 Important Criteria To Consider

Do you want to buy a condo or a house? By becoming a landlord, you can stop paying rent and you can even collect one. However, you must also have the ability to pay your mortgage loan as well as the new expenses to be expected when you become a homeowner with your first mortgage loan.

Here are 9 criteria to consider when obtaining your first mortgage loan.

The down payment

For mortgage loan insurance, you must pay an amount that is 5% of the purchase price of your home. So, for a property at $ 350,000, the down payment will be $ 17,500. If your home costs more than $ 500,000, the minimum amount is 5% for the first $ 500,000 and 10% for the rest.   

You will receive an insurance premium from CMHC if your down payment is greater than the minimum amount. This varies between 2.8 and 4.5% of your mortgage loan.

Your future budget

Before thinking about buying a first home, it is strongly recommended that you check your credit report. Anomalies could affect your chances of getting a mortgage. It is also good to try to plan for the money you may have in the future. A change in circumstances could potentially decrease your income.

Your mortgage borrowing capacity

Your mortgage payments should not exceed 40% of your gross income . Your borrowing capacity can depend on a multitude of factors which include, among other things, your annual salary, but also your current expenses such as your housing costs. 

To determine your ability to pay, see a mortgage advisor. They will ask you several questions to check if you are able to pay your mortgage. 

Mortgage pre-approval by your financial institution 

Receiving pre-approval from your financial institution will allow you to make a better estimate of your purchasing power . Sellers are also more willing to sell their property to buyers who have received mortgage pre-approval.  

Obtaining mortgage pre-approval is free and can be done by consulting a financial advisor. Keep in your possession all the documents that determine your financial situation (tax bill, bank statements, pay stubs, etc.). You will be better able to demonstrate to your financial advisor that you have the ability to buy a property. 

The amortization period of the mortgage loan  

The amortization period is the length of time the bank gives you to pay off your mortgage. The longer it is, the lower your monthly payments will be. However, you will pay more interest . 

The law provides for a maximum amortization period of 25 years . If you can afford it, you can choose to reduce your amortization period. This will allow you to pay less interest on your home mortgage.  

Fixed or variable rate? 

At the end of the term, which lasts between 2 and 5 years, you can renegotiate your interest rate. A variable rate, as its name suggests, varies depending on the market. 

The frequency of mortgage payments 

You can choose to pay your mortgage payments monthly, biweekly, or weekly. It is also possible to make an expedited payment rather than a regular payment.

You will pay a little more each year, but you will reduce the amortization period of your mortgage.

The possibility of early repayment 

You will have the choice between an “open” or “closed” mortgage. 

An open one will allow you to make an early repayment, that is, to increase your monthly payments to shorten the amortization period . However, it comes with higher interest rates. A closed mortgage comes with a lower interest rate, but you won’t be able to change your payment amount as you see fit.

Life insurance and disability insurance 

Some mortgages include life insurance or disability insurance.

Life insurance allows you to repay the amount of the mortgage loan to the institution if you die. It is useful if you are sharing your mortgage payments with someone else or if you have dependents.  Disability insurance protects the buyer in the event of accident, illness or injury. It is important to choose it well, because it comes with several conditions.

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A-1Perfection, The Ideal Emergency Management Firm

A-1Perfection, The Ideal Emergency Management Firm

Who is A-1perfection?

If you’re looking for a trustworthy and experienced emergency management firm, then A-1perfection is the ideal choice for you. The website is highly suggested for those people that are searching for complete disaster management alternatives.

Disasters can happen in the form of floods, hurricanes, fire, etc.. Perfection is one of the disaster management companies in the world these days. The Business is headquartered in Northern Illinois and Southern Wisconsin.

a-1perfection

A-1perfection has tie ups with insurance companies and offers reimbursement as well as recovery to those who have suffered due to a disaster.

The company handles every aspect of the loss due to tragedy right from reconstruction. Perfection has a helpline number for answering your requirements. The business provides different restoration services like water and fire damage restoration, renovation, move outs, large loss branch, duct cleaning, etc..

The staff at perfection is given world class training even before they’re implemented from the disaster management group. The company is equipped to solve all your problems and bring your life back to normal in the shortest period possible.

How does A-1perfection conduct emergency management?

In case of water damage restoration, A-1perfection has the capability to handle any kind of loss that’s caused due to water – by a small leakage to big floods. The business also specializes in sewage services as well as disinfecting the region affected by water.

Steps are required to make certain that no more damage is done to property because of water. In terms of fire restoration, the business specializes in restoring property that’s been destroyed by fire. Even in case of a fire, the company will use all equipment and means to stop the fire from spreading and damaging additional property. The

Region is made smoke free quickly and also an inventory analysis is also required to check which property has been dropped or destroyed by fire.

For renovation of property, the company has a full-fledged group of experts – carpenters, architects, engineers, technicians, technicians, and fire restoration technicians. The main objective is to handle every aspect of the reduction.

Reconstruction includes tasks related to odor removal, water damage management, roof repair, plastering, carpet cleaning, carpentry, interior and exterior painting, pop blasting, and emergency power.

Other than renovation tasks, the firm also specializes in carpet cleaning by a team of professionals. The cleaning process is safe and effective as procedures are implemented to eliminate almost 96 percent of the dust particles and bacteria on your carpet. No matter your carpet or carpet is, it’s always safe in the hands of Perfection. The business specializes in deep carpet cleaning as well as stain removal, pet odor removal, and mildew removal.

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3 Critical Points About Mortgages For Every Beginner

3 Critical Points About Mortgages For Every Beginner

Many are confused about the word “mortgage” in regards to lending funds. Factors seem difficult if this word is connected to our home, though its procedure is not very complex. Keep reading this article to explore more about mortgages.

Commonly, mortgages are a legal agreement involving a loan provider and a debtor . A mortgage enables a person to take a loan from a loan finance agency. However, this would also require debtor to make use of his property as a guarantee when the loan amount will not paid out in accordance with the agreement.

Types of Home Mortgages

Fundamentally there are two types of mortgage. It is essential that the form you will opt for should be based upon your needs and wants . The 2 types of mortgages are:

1. Fixed rate mortgage (FRM).

2. Variable rate mortgage (VRM).

In a set rate mortgage, a fixed rate is set in the mortgage period arranged by all parties. On this kind of mortgage, you need to pay a set every month repayment during a fixed length of time. The fall or rise of interest rates won’t have an effect on the amount you’ll pay for mortgage every month given that the repayment is already fixed.

For that reason, it is very likely for this mortgage to become quite popular. There are set rate mortgages that have a One year payment period while some are payable up to Twenty five years. The payment period of fixed rate mortgages will most likely differ from 1 year up to twenty-five years.

However, a variable rate mortgage consists of a hanging monthly interest rate which can change down or up in to the future depending on marketplace situations. Adjustable interest rate mortgages are supposed to get paid in a smaller time frame. Their monthly obligations and also interest rates are cheaper in comparison with set rate mortgages.

These 2 types of basic mortgage have also other mortgage versions. Interest only payments and principal and interest repayments are classified as variations from these 2 mortgage kinds. Nevertheless, you should also research other types of mortgages in the case that none of the above suit your financial needs and goals.

Locating the best mortgage offers

You might hire the service of independent mortgage brokers or agents to locate the best offers on the market as quick as it can be without going the traditional route.

Finance institutions such as building societies, credit unions as well as banking institutions could also be helpful in your search for the best deals in the market.

Having said that, if you like quickest approach to perform your research, you should get the service of mortgage brokers. Availing their services gives many benefits and you could take a look at our post or look at other sources to see what exactly they do.

The value of the house or property will often determine the lend sum that a borrower can avail themselves of using a mortgage. The expense of lawyer’s fees as well as assessment will be the liability of the borrower.

Nevertheless, reevaluation might be requested from the debtor if he or she finds the valuation wrong. And lastly, it may be stated that, a wise choice could help a borrower to keep away from any of the negative effects of mortgages.

Expert guidance and service are provided through mortgage agents that may help you to grab the best offer in the minimum amount of time. The mortgage loan lender thinks about the worth of the house and property when establishing the amount to be lent.

Being a debtor, the ultimate way to prevent the poor effects of mortgages would be to have a smart decision.

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Low Doc Mortgages – 6 Important Pros And Cons

Low Doc Mortgages – 6 Important Pros And Cons

Tired of having to put all that Paperwork Together? Opt for Low Doc Mortgages!

In general, obtaining a home mortgage involves tons of paperwork being put together by the applicant.  Then every aspect of the individual’s financial situation is placed under the microscope.

Applicants with steady jobs are the ones that always do the best with a traditional lender. Professional investors, individuals on a pension, self employed individuals and anybody else who has an unusual financial position or an irregular income has a tendency to not be able to meet the bank’s criteria to qualify for a loan.

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Low doc mortgages are also referred to as non-conforming loans at times. That is due to fact that they are designed to help applicants who don’t meet traditional lenders’ borrowing criteria.  However, on the other hand, this is not entirely accurate as non-conforming loans are aimed more at bad credit borrowers.

A good credit rating is required by a low doc loan, so they aren’t exactly the same thing. Nonetheless if you need help with this one check with your home loan broker who can help you to get an approval for home loan you seek within a shorter period of time.

How Willing are Lenders for Bad Credit Borrowers?

The low-doc mortgage approval value in Australia is increasing despite the fact that total housing loan approval values in some areas have been flat overall. So although low-doc loans accounted for only an estimated 5 percent of total outstanding loans, this share has been increasing.  Currently, these loans make up an estimated 10 percent of the overall new home loans.

This market’s rapid growth has taken place at the same time that increased competition has been occurring.  Low-doc mortgages were initially marketed by just specialist non-bank lenders.  However, over the past few years, mainstream lenders have gotten into this market.

In particular, some of the smaller banks have been targeting this segment of the market.  On the other hand, major banks were not as fast to get into this market but recently have started to advertise low doc products more actively.

Low Doc Mortgages are Most Commonly Used by the Following Individuals:

– Self-employed entrepreneurs

– Small business owners

– Contractor workers

– Property investors who have dozens of properties

– Casual or part time Short-term employed

– Individuals who don’t have their recent tax returns

– Casual seasonal workers

property-investment-mistakes-1It’s Not All a Piece of Cake

Low Doc loans make it possible for individuals whose financial positions don’t meet the traditional lender’s qualifying criteria to finance homes that they can afford to pay for.

When a Low Doc mortgage is applied for, the lender might still ask questions about your income as well as your liabilities and assets.  Your credit history will also be checked.

Unfortunately, a majority of Australian lenders won’t consider offering Bad Credit Low Doc home loans.  Frequently a letter from an applicant’s account is required on a low doc loan in order to verify the income stated on the mortgage application.  No financial statements or tax returns are required.

The Downside of Low Doc Mortgages vs. Full Document Mortgages

The lending market perceives low doc loans as being higher risk compared to full document mortgages.

One thing lenders really don’t like is the risk.  The higher the risk is perceived to be, the higher the interest rate is likely to be for the borrower.  As a result, Low Doc borrowers have a tendency to incur higher interest rates compared to full documentation loans obtained from traditional borrowers.

Nonetheless They can Still be a Great Opportunity for Some

In addition, the riskier the loan is perceived to be, the less Loan-to-Value Ratio a lender will be willing to advance.  Although the Australian loan market does offer first home buyers home loans that are up to 99% of the property’s value -on Low Doc loans this is not available.  In general, a majority of Low Doc home loans don’t go past 80% of a property’s value. In some lender instances, even lower

However, Low Doc mortgages still provide many Australians with a great opportunity for either purchasing a home, or build an entire real-estate empire.  It is almost impossible to accomplish the latter with a full doc mortgage.  Many start out being full documentation applicants.  However, those who want to expand their real-estate investment portfolios will eventually need to seek out financing via the non-conforming loan market.

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Low Doc Home Loans vs. Non Conforming Loans In 4 Critical Points

Low Doc Home Loans vs. Non Conforming Loans In 4 Critical Points

If you haven’t bought a lot of property before, getting your first look at all of the different home loan1 products offered by lenders and mortgage brokers today can be quite confusing.

Many lenders’ marketing campaigns blur the lines between the low doc home loan and the non conforming loan, and it’s hardly uncommon to think these two products are the same. This isn’t exactly the case.

While both types of loan are designed to appeal to borrowers who are self-employed or otherwise outside the criteria imposed for standard loans, there are some distinctions to be drawn between the two.

Low Doc Home Loan Important Features

The name of this sort of loan points towards its key feature: It’s intended for borrowers who don’t have the usual financial documentation required for traditional loans. Those who lack payslips, tax returns, and other such paperwork are the core demographic for low doc loans. They are principally designed for small business owners who for whatever reason don’t have the usual supporting documentation available for lenders to inspect.

The information required to substitute for these documents varies from lender to lender. Some will work with borrowers who make statutory declarations of their intent to repay the loan; others require a letter from a financial professional (e.g. an accountant) detailing the borrower’s ability to pay.

20What do You Need to do to Qualify

Regardless of the details, low doc home loans are usually only offered to borrowers who have strong credit histories. A few small defaults on debts like utilities might be forgivable. Major credit problems like bankruptcy will make it impossible to secure this type of loan.

Most borrowers will be required to deposit a significant amount of the total purchase price before taking out a low doc loan. 20 percent deposits are typical; some lenders may require larger deposits. Australian borrowers can now obtain low doc loans for both private and investment use.

At one time, the interest charged to a low doc loan borrower would always be significantly higher than that charged to a borrower with a standard loan. This has started to change in the past few years; many lenders on the home loan market have cut the rates they charge on their low doc products in order to make them more attractive to borrowers.

Non Conforming Home Loans Important Facts

The non conforming loan is designed to meet the needs of borrowers who cannot meet standard loan criteria. Borrowers with bad credit, a lack of steady employment, overseas residency, or low deposit may be able to secure the financing they need through a non conforming loan.

What Kind of Interest Rates can You Get?

Lenders who offer non conforming products are taking on greater risks than those offering standard loans. They generally hike up the interest rates on non conforming loans to compensate for this increased level of risk.

Borrowers should always take the time to learn about all of the requirements and obligations involved in any home loan product before making any commitments. Interest rates are not the sole point of interest; re-draw options, fees, loan portability, and alternate repayment methods also need to be considered.

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Low Doc Loans: 4 Easy Key Points For Beginners

Low Doc Loans: 4 Easy Key Points For Beginners


As No Doc loans have been phased out in Australia and most other countries around the world since the Global Financial Crisis, the only option left these days are Low Doc Loans.

A low doc loan, sometimes known simply as low doc or standard income loan, is a mortgage or a home loan where the documentation for the verification of your income will not be required. However, all of the other documentation will be.

Who are low doc loans best suited for?

These are loans ideally suited for independent contractors, self-employed, credit rating impai18red, investors, people who have had bankruptcy, a client that may have arrears on their current mortgage, or a borrower that has been rejected by the traditional lenders. This will include some people who have suitable incomes, but will take valuable time and money to meet bank verification.

Low doc home loans are usually a bit more expensive than the traditional mortgages, simply from the higher risk profile.

What can you use these loans for?

These loans are usually for people who are hoping to buy investment properties, residential locations, or are looking to refinance an existing property and they do not have current taxation returns or PAYG documents that will confirm their income, which usually is needed to sustain a regular investment loan.

There are basically three major types of no document loans or low doc loans:

Doc Home LoanNo debt to income ratio loans

These are loans for borrowers that may not want to state their income. There will be no debt to income ratio that the lender will have to take into consideration. With decent credit and good assets that a no ratio borrower has, it will make up for the lender not taking the borrower’s income information into consideration. If it is going to be a logistical nightmare for you to gather all of your income documentation, this kind of loan offer may be quick and easy for you.

Low doc standard income loans

If you have income that fluctuates from week to week or month to month, the low doc loan or standard income loan will be the most attractive for you. However, unlike a no doc loan, low doc loan requirements will call for the borrower to disclose earnings, usually for about two years, and they may also have to show their bank statements and tax returns.

When you feel as though a low doc or no doc loan will fit your situation, you can speak with a mortgage expert. It could be beneficial for you to pay a steeper interest rate for such a loan. The right broker will be able to show you exactly how you can gather all the necessary documentation.

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