Mortgage Brokers – What they do
Research has shown that mortgage brokers are helping buyers with over 50 per cent of all new housing loans in Australia, and for good reason – buyers know that mortgage brokers can provide a level of advice that banks simply can’t.
Many home owners and property investors work with mortgage brokers because they provide expert knowledge and have a comprehensive understanding of the lending landscape. Researching loan products can be time consuming, however mortgage brokers have the features of numerous lenders’ loan products at their fingertips, saving their customers a lot of legwork.
A mortgage broker will work with you to understand your goals and objectives, as well as your borrowing capacity, and will help you secure a loan that meets your needs from a panel of lenders. This includes reviewing a range of loan products, negotiating with panel lenders on your behalf and seeing the loan application process right through to settlement. They may be able to source more competitive interest rates while using their relationships to negotiate rate discounts or other benefits. A broker may also help borrowers stay on top of any penalties, fees or other hidden charges or costs that might negatively impact a borrower.
Mortgage Brokers have a direct line to a large panel of quality lenders, so they can crunch the numbers and give buyers a comparison of the best interest rates and products available from that panel. The panel is likely to include the major banks. Though mortgage brokers can also take the pulse of highly competitive regional and second-tier lenders, as well as niche lenders that might suit borrowers like the self-employed. Brokers have a good knowledge of the products available to borrowers and can offer good advice on your home loan options.
Part of a mortgage broker’s job is to give borrowers a helpful reality check. Lenders also have to adhere to the ASIC responsible lending obligations, meaning they will only let you borrow an amount that you have the ability to pay back. As part of the loan-application process, mortgage brokers often sit borrowers down to ask a range of lifestyle-related questions, as well as to assess the basics of income.
By breaking down the mortgage with the borrower into monthly and weekly chunks and comparing them with lifestyle expectations, mortgage brokers can help borrowers adjust their expectations – before they find themselves sacrificing their lifestyle.
Mortgage brokers are steeped in product developments and trends, and can make sure borrowers are asking themselves the right questions at the right times. Whether it’s considering the advantages of a fixed, variable or split home loan; making sure borrowers have an offset account; or what a good rate discount looks like at any given time, brokers can put their knowledge to work for borrowers.
Why Mortgage Brokers hold the keys
Getting a foot in the door of your dream home might be getting harder, but talking to a mortgage broker could get you the keys more quickly.
Purchasing a property in today’s housing market is not for the faint-hearted. Would-be homebuyers have only to turn on their TV – or check Facebook or Twitter – for the latest news informing them that their dream home is slipping further out of reach. When you add in the challenge of sourcing the right loan, first homebuyers can be forgiven for thinking twice about taking that first step on the property ladder. But the truth is, it’s not quite as hard as you think.
Finding a Mortgage Broker
When it comes to one of the biggest financial decisions you’ll ever make, it pays to have some professional help. But how do you find a good mortgage broker, and what can they offer? Here’s what to look for.
Knowledge and partnerships
A good mortgage broker is able to offer suitable product solutions due to the expansive panel of lenders and mortgage products available to them. Brokers have long standing relationships with a range of lenders. They stay up-to-date on the latest features and loans available so that they can give their clients the best solutions for their individual circumstances.
A winning client-broker relationship is one that makes you feel comfortable, confident and collaborative. This means that a mortgage broker will be genuinely interested in your current and future financial situation and loan needs. They should communicate well and be reasonably contactable. They should also be happy to take the time to explain loan jargon such as mortgagee, LMI, LVR and so on. Brokers who are on the ball will also welcome – and encourage – you to ask questions and will be prepared to answer them to the best of their ability.
A good mortgage broker won’t send off a loan application with guns blazing. Instead, they’ll take the time to assess your financial situation and lifestyle to ensure the loan type and amount you’re seeking is in fact the right loan for you. Many mortgage brokers offer free home loan health checks to determine your financial borrowing capability before embarking on the application process.
All mortgage brokers must be authorised to provide credit advice by an Australian Credit Licensee holder. However, the mortgage broker you want to be working with seeks to improve his or her qualifications and training by joining associations such as the Mortgage and Finance Association of Australia (MFAA) or Finance Brokers Association of Australia (FBAA), and completing continued education courses from year to year.
When trying to decide on a mortgage broker to go with, look for one who has relevant experience working with the type of borrower you are. Ask your mortgage broker what percentage of previous or current borrowers on their books are first home buyers, investors, commercial borrowers or retirees. Getting an idea of the kind of work they primarily do will give you an idea as to whether they are the right broker for you.
A good mortgage broker will focus not just on the here and now, but also the future. While your first home loan may be a significant step, it is likely to be the start of your property-purchasing journey, paving the way for your second and perhaps third investment. Therefore it’s wise to weigh up a broker’s initiative about staying connected with you.
Finding the right mortgage broker could be all that stands between you and your property dream.
Need some Advice about loans?
A mortgage broker can help you find the right loan and secure the finance that’s most suitable for you. It will also ensure you avoid making mistakes.
Any questions you may have regarding loans, contact Annette Tothill on 0420 973 551.