5 questions to ask your mortgage broker

Most people would be surprised at the difference a good mortgage broker can make when they negotiate for a property. They can make or break a deal.

Let me give you some examples:

  • Being able to pay a deposit by cheque is so much more flexible than having to use a deposit bond. And that flexibility can mean that you are ready to seal a deal faster and potentially avoid competing with other buyers. So a switched on broker will have made appropriate arrangements ahead of time.
  • Most banks require a valuation of the property at some point. And most seem to insist that all valuations are done after an offer has been accepted. But this can be a problem if the property is going to auction or if there are many buyers interested in the property and you need to make an offer AND exchange contracts quickly. Having to get a bank valuation before you can sign on the dotted line can slow the negotiation process down and opens the door for other buyers to compete with you. An experienced broker will be able to accurately advise you on your individual risks should the valuation not come in high enough. After all, he or she is privy to your loan to value ratio (LVR).

Is your mortgage broker commercial enough to understand that you really need unconditional approval before you make an offer? Can they properly advise you on the risks of proceeding without a valuation? Or are they hamstrung by the rules of their employer?

The property market in Sydney and many other areas is hot right now, so any delays caused by an inexperienced or non-commercial mortgage broker could cost you dearly – either resulting in you missing out on a property, or in you having to pay more for it.

Here are 5 questions to ask before you choose your mortgage broker:

  1. How quickly can you turn my pre-approved loan into an unconditionally approved loan?
  2. Do I need a valuation before I can go to auction or sign an unconditional contract of sale?
  3. Can you get access to valuations quickly and at no added cost?
  4. Are you aware that sometimes waiting for a valuation could result in me missing out on a property, and will you advise me of the risks of proceeding without one, given my individual financial circumstances?
  5. Can you arrange for me to have a cheque book for paying the deposit?

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