How to be your own mortgage broker

It’s never been easier for everyday Aussies to take control of their finances and cut out the middleman to do so. Nowadays, this includes mortgage brokers.

Whether you’re wary of mortgage broker commission structures, or which home loan lenders will be promoted more heavily in their books, it’s now possible to become your own mortgage broker.

There are a range of tools accessible to you to help you take control of your home loan journey. All you need to know is where to look.

1. Borrowing potential

To become your own mortgage broker, you’ll need to know how a lender looks at your finances to determine whether you’ll be approved for a loan and for how much. A mortgage broker is able to take a look at your application and give you a good overview of just what your borrowing power may be.

But this calculation is something you may be able to do yourself with the help of a borrowing potential calculator. Enter a few loan details first, such as your ideal loan term, interest rate of a loan you’re considering applying for and application type (single or joint). You’ll then provide key borrowing power details: income, expenses and liabilities (plus any dependents).

A lender will look at these three factors to get a clear picture of just how much you can reasonably afford to spend on mortgage repayments without falling into a risk category for default. The borrowing potential calculator will show how much you may be able to borrow, and what expenses you may want to cut down on to increase this.

Keep in mind that every dollar you spend counts. Frivolous purchases you make frequently, such as food delivery or online shopping, may be considered regular expenses. The lender may expect that you’ll make those purchases for the life of your loan and reduce those costs from your borrowing power.

2. Repayment calculator

Now you have a good idea of how much you may be able to borrow, the next step a mortgage broker may take is to show you what your repayments would look like for said loan. This is where a mortgage repayment calculator comes in handy.

Simply enter your potential loan amount, loan term you want, potential interest rate and how frequently you’d like to make repayments (weekly, fortnightly or monthly).

Shorter repayment frequencies may help you to pay down your principal faster, but monthly repayments can offer some breathing room in the early years of your mortgage when your savings are lower. You are also able to use repayment calculators to compare multiple loan options.

You’ll then be able to view the potential loan repayment amounts and carefully compare this against your own budget. A mortgage broker would offer these calculations for you to help you see:

    1. If you can afford the loan; and
    2. What the most affordable options are.

3. Stamp duty calculator

Stamp duty is one of the biggest upfront costs of a home loan, and one that can leave a real sting in the tail for many who don’t anticipate it. Unlike Lenders Mortgage Insurance, you cannot tack it on to the end of your mortgage.

A mortgage broker will do their due diligence around just how much your home loan may potentially charge you, including stamp duty. But there are easy-to-use stamp duty calculators available that can do just that.

Simply nominate the potential property value, your state or territory, whether you plan to live in the property or invest and whether you’re a first home buyer or not. First home buyers may be eligible for stamp duty exemptions, concessions and/or grants to help them get a foot on the property ladder.

Stamp duty calculators can make the process of using State Revenue calculators and reading complicated regulations around concessions and exemptions much simpler.

Any statement/s are general in nature and do not take into account your financial personal situation, objectives or needs. You should consider whether any statement/s is suitable for you and your personal circumstances. Before making any financial decision, consider your circumstances and the product disclosure statement.

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