Firstly.....What is a mortgage broker?
So what is a mortgage broker? Basically a mortgage broker is a loan expert who assesses different loans and helps pick out the one best suited for yourself. Considering that a loan or mortgage is going to be your biggest expense, it pays to have a professional assist you through the process. In fact over 52% of all home/ investment loans are now written by mortgage brokers. Here are some of the reasons why people should use them as opposed to going directly to a bank.
1: A mortgage broker can save you time
The choices now available in the mortgage market can seem limitless and completely overwhelming. There are now over 100 banks/lenders in Australia. To try and research even a few lenders’ products and compare them together can take a considerable amount of time. Mortgage brokers do it for a profession and thus have a very good understanding of what is available in the market place and should also have computer software to compare current loan products so as that you are comparing ‘apples with apples’ (so to speak!)
2: Mortgage brokers give you choice
All mortgage brokers will have a panel of Lenders from which they recommend a loan. Most will have anywhere from 20 to 30 lenders on their panel. Before they can offer a loan product a broker must be accredited with every lender on their panel, and are required to keep up-to-date with their latest offers.
3: A mortgage broker can help find the right loan
The best deal is not necessarily the cheapest rate. A good mortgage broker will examine your circumstances and future plans to recommend a loan that is right for you. Having an appropriate loan which works for you can help you build wealth the right way.
4: Most mortgage brokers don't charge you
Most mortgage brokers don't charge a fee for their service as the lenders pay them a commission for the loans they write. Most lenders offer the same rate via the mortgage broker as they would if you went directly to the bank. In some cases the broker may be able to secure a better rate than if an individual applied directly to some lenders as the broker does have the ability to request discretionary discounts on rates over and above what is being offered to the general public.
5: Mortgage brokers can help you avoid certain loan pitfalls
Many products seem to offer a great deal but they could have penalties, fees and charges you may not be aware of. Or, they may not offer the flexibility you require in the future. A mortgage broker can help you avoid taking out a loan you might later regret.
6: Mortgage brokers do all the legwork
A broker will be the one who will collect the relevant documents and information from you and then do all the work in regards to researching the loan products that will be appropriate/ putting the deal together/ following up with the lender’s assessment team and back office staff/ communicating with your lawyer and generally taking care of you as well (for many people, buying property can be a very stressful experience, but with the right broker helping you, it shouldn’t be!)
The only finance broker to deal with: MFAA members
A good mortgage broker can save you time and money, and give you peace of mind. But, remember, only work with mortgage brokers who are members of MFAA - they are the Essentials of Borrowing.