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5 Ways Mortgage Brokers Can Help You With Rising Interest Rates

Roland Nguyen
July 26, 2022
how mortgage broker can help

The Reserve Bank of Australia (RBA) has continuously increased interest rates. But it is not all good news, because the higher cost of borrowing will hit mortgage holders and businesses who have taken out loans. As a result, it will be a stressful time for them as they struggle to pay their mortgage.

That is why speaking to a mortgage broker will be a great help in this difficult time.

In this article, we will explain how a mortgage broker can help you make the best decision for your circumstances amidst the rapidly changing interest rates.

1. Mortgage Brokers can help you refinance your loan

If you're worried about rising interest rates, refinancing your home loan could be a good option. By refinancing, you may be able to lock in a lower interest rate on your loan, which could save you money over time.

A mortgage broker can be a big help when you are looking to refinance your loan. They will work with you to find the best rates and terms possible, and they can even help you negotiate with your lender. But before you refinance, there are a few things you need to know.

  • Are you eligible for a better deal? To do this, you need to compare your current home loan with other loans on the market. 
  • How much will it cost? Refinancing can come with some costs, such as exit fees and early repayment penalties. 
  • What are the risks? There are a few risks associated with refinancing, such as the possibility of your home being repossessed if you can't keep up with repayments. Make sure you understand these risks before making any decisions.

Remember that before making a decision, it will be better if you talk to a mortgage broker or financial advisor. They can help you understand your options and make the best decision for your situation.

2. A mortgage broker can help you with a home loan health check

A mortgage broker can help you get a better deal on your mortgage by shopping around for the best interest rates. It is important, as the interest rate will surely have a big impact on your monthly repayments.

A broker can also advise you on other aspects of your mortgage loan, such as the term length and repayment options. They can also help you to compare different loans from different lenders, to find the one that best suits your needs.

3. A Mortgage Broker can guide you through the home buying process

A mortgage broker can play a vital role in guiding you through the home buying process. They will assist you in locating the ideal lender for your requirements and guarantee that you receive the finest mortgage deal available. Also, they will offer you guidance so that you can choose wisely when it comes to buying a house.

Thus, dealing with a mortgage broker might be a priceless resource if you're thinking about purchasing a property. Here are some ways a mortgage broker might be of use to you:

  • Finding the right lender: There are many different lenders out there and each with its terms and conditions. A mortgage broker will help you find the lender that best suits your needs so that you can get the best possible deal on your mortgage.
  • Getting pre-approved: Before you start looking for a home it’s important to get pre-approved for a mortgage. This will give you an idea of how much you can afford to spend and it will also put you in a better position to negotiate with sellers. 
  • Navigating the housing market: A mortgage broker can help you understand the different types of properties that are available, as well as the prices that are being asked for them. 

The process of purchasing a home doesn't have to be complicated. So to make the home-buying process as easy and stress-free as possible be sure to engage with a mortgage broker.

4. A Mortgage Broker can help you streamline your finances

If you're worried about rising interest rates there are some things you can do to make the situation more manageable. 

For instance, by consolidating your loans with the help of mortgage brokers, you can reduce your overall monthly payments. This might make it easier to keep up with your payments and keep budgetary restraints in place.

That’s why talking to your financial advisor or mortgage broker will let you know about what steps you can take to protect yourself and your family. Remember that with a little planning, you can weather any storm.

5. A Mortgage Broker can help you lock in a fixed rate

Your mortgage's fixed rate will give you security and stability by shielding you from future rises. Typically, you can lock in a rate for a set amount of time, like six months or a year. The rate will then change back to the variable rate. In such case, you won't profit from falling interest rates if they do so. You will appreciate having a lower rate locked in, though, if rates continue to rise.

Of course, there are downsides to locking in a rate. If interest rates go down after you lock in your rate, you'll be stuck paying a higher rate than everyone else. And if you need to break your mortgage contract for any reason, you may have to pay a penalty.

So weigh the pros and cons of locking in a rate before making a decision. If you're not sure what to do, talk to your mortgage broker for advice as they can help you figure out whether locking in a rate is right for you.

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