Mortgage Broker Auckland
What to expect from a Mortgage Broker Auckland
If you have come to this site the chances are you need a loan through a mortgage broker, so you may be wondering what it is that a mortgage broker does, well read on and I hope to answer any questions you may have about mortgage brokers and the mortgage system.
What is a Mortgage Broker?
The simple answer is an intermediary (or middleman/woman) who brokers mortgage loans on behalf of businesses or individuals. Traditionally this was done by the banks and other institutions set up to lend you money using their own products. Mortgage brokers do not sell one product but look across a range and find what they consider to be the best deal for you then act on your behalf to secure that deal.
As the market for mortgages has become more competitive the role of the mortgage broker has increased in popularity. Mortgage brokers acting on behalf of lenders are today the largest sellers of mortgage products not just in Auckland, or New Zealand but across the English speaking world.
The Role of the Mortgage Broker
The role of the mortgage broker is to find a bank or lender that is willing to make the best loan deal that suits both the individual and the lender. Mortgage brokers in New Zealand are regulated to ensure they are complying with the financial and banking laws within their jurisdiction.
What is a Home Loan?
In simple terms, a home loan is a loan you obtain from a lender so that you can purchase a house. The loan is secured against that house and the lender will retain the certificate of title on the house until the loan is fully paid. This protects the lender from your selling the house until the loan is repaid. It is a complex legal subject and should you have any questions your mortgage broker is the best person to give you the advice you require on the legal implications surrounding a mortgage.
What is a Mortgage?
Your home loan is secured by your mortgage. It acts as a form of security that is taken over loans to real estate or land. If you do not repay the loan or default on your payments it gives the lender the legal right to repossess the real estate or land secured by the mortgage.
What are the Benefits of Using a Mortgage Broker?
The system of mortgages is a very complex and complicated one. There are so many different types of home loans available for you to choose from an equally high number of lenders in a very competitive market. In Auckland you should use a registered financial adviser as they can help you sift through the lenders and choose the home loan that is the most suitable for you and is the most appropriate fit to your personal needs. Using a mortgage broker in Auckland will save you time as they do all the leg work for you.
How will I know if a Mortgage Broker is Approved?
One way to check is to go online to Financial Advice New Zealand and check if your broker is listed. Members of Financial Advice New Zealand have a code of conduct and are committed to help people with the best Financial Advice for their situation.
Look for this logo:
During any formal discussions registered financial advisers must provide a copy of their disclosure statement.
How much to Borrow!
As a general rule you should only borrow what you can afford to comfortably pay back every month. You should work out what your existing payments are and budget whatever you can afford before you commit yourself to borrowing. Preparing your financial budget with your mortgage broker will help to determine how much you can pay back every month.
What is the Most Suitable Home Loan for Me?
Whichever home loan is the most suitable for you depends entirely upon your circumstances. You should discuss all of the available options with your mortgage broker and decide taking his/her advice before making a decision.
How often Should a Home Loan be Reviewed?
Your personal finances should be reviewed regularly. The management of your mortgage or home loan should in reality be reviewed every two years. This review may mean all is ok and continue just the same or it could be discovered that you need to make some adjustments to that loan deal to allow for your changes in the financial situation. A financial review by your registered mortgage broker could give you some savings on your monthly outgoings.
Who are the Mortgagee and the Mortgagor?
The bank or financial lender is the mortgagee. It is the financial institution that lent the principal money which is secured against your home.
The borrower is the mortgagor.
What is the Principal (Money)?
The principal money is the sum of money that you borrow or want to borrow. If you need to borrow $80,000 to complete the purchase of a house then that $80,000 is the principal.
What is the Interest?
You have to pay interest on the amount you borrow, the fee or debt that you are paying to borrow that amount. Interest can be paid in several ways depending upon the type of loan you have agreed.
Some of the common types of loans include;
On this type of mortgage the interest rate is set at an agreed rate for a period of time. This could be anything between one and five years. During this set period the interest rate will not change no matter how good or bad the economy is doing or how variable the bank or lenders own interest rate or rate of borrowing fluctuates.
The interest rate changes when the Reserve bank of New Zealand adjusts the official cash rate, your monthly payment could go up or down depending on how good or bad the economy is doing.
Only the interest is paid on the home loan. The principal amount is then due when the when the loan period ends or the mortgage has ended.
Is interest rate is at a fixed price but if the bank sets a lower rate of interest you can then pay at the lower rate.
You should only use registered mortgage brokers. You should listen to their financial advice carefully and not take out a loan you cannot afford and always remember that interest rates can go up and down, which can greatly affect your monthly payments.