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Property financing. Wow, what a delight it can be. Especially for those not in the game. There are so many options, so many ads and so many incentives. How do you determine what the best option is?

1. Ask your trusted friends and family for recommendations on who they have used in the past. You will no doubt get a raft of stories. Some good and some not so good. But in a market with so much competition, referrals are like gold. Speak directly with those referrals and make a judgment for yourself. Ask questions about their qualification, experience and general market knowledge. Don’t be shy - they’re the ones pitching for your business. 

2. Don’t be afraid to ask the broker how their commission structure works. A mortgage broker will receive a commission from each bank that they successfully refer. These will vary from bank to bank so it’s important to get an understanding that you are not being referred to a bank simply because the broker receives the highest commissions from them. They must have your best interests in mind and you need to be comfortable they do.

3. Again, don’t be shy to see the brokers accreditation and insurances. They must be licensed and hold the relevant Professional Indemnity licenses to be able to trade. Make sure you sight these and your comfortable they are legitimate.

4. Your circumstance will be different to everyone else. Everyone is individual and should be treated on a case-by-case basis. This being the case, ensure your broker is listening to your needs and requirements. There are many many different products available so you should ensure your particular circumstance is matched with the right product. Be wary of being referred the same product as your friend or relative because it was good for them. It may also be a product that is ’The flavour of the month’ (high commissions). It needs to cater for you and you only.

5. Ensure the loan is setup correctly for you. If it’s an investment property, then you will most likely want this to be an interest only loan (speak with your financial advisor for more details on this). Most banks will give you the option to have the 1st 3-5 years as interest only with it reverting to principal and interest only after that. This can be renewed again at that point for an additional interest-free period. 

6. Make sure you have a good understanding of the loan product and the best way to use it. Most banks will offer a product that includes a mortgage-offset account. In short, a mortgage offset account is used to ‘offset’ your home loan balance. So essentially you only pay interest on your home loan balance minus the amount in that account. It’s a good idea to have this attached to your loan product - when used right, it can save you hundreds, sometimes thousands in interest to the bank. Now that’s a win!

Milk Chocolate work with our clients to recommend the best mortgage broker depending on their circumstances and handle the process if required. 

Milk Chocolate purchase residential and commercial property in Australia on behalf of Australians living abroad, looking for a home or investment property. To see how we can help you get in touch here. To read more news and information on the Australian property market visit our news page here.



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