There is a vast array of home loan products available to homebuyers, making it an overwhelming task to choose which one is the right one. So, it’s not surprising that brokers now provide over 50% of mortgages in Australia.
Here are the reasons why it pays to have a mortgage broker help you choose a home loan:
1. It’s technically free
You don’t pay mortgage brokers directly. They are paid by commission by the lender you eventually choose. There are comparison tools available online to help you get in touch with potential brokers.
2. Lenders pay them to help you
Mainstream banks pay virtually the same commission, but non-traditional lenders might not. To find if your mortgage broker is not favouring lenders who pay the highest commissions, you can ask your broker for details of their commission. They are required by law to disclose such information under the Mortgage and Finance Association of Australia’s National Consumer Credit Protection Act.
3. Niche or mainstream
It’s your decision whether to choose a niche or a mainstream broker. All brokers are affiliated with a good network of lenders, but they can only market and sell loans they are accredited to talk about. This means your broker may not be licensed to talk about every bank and lender out there. Mainstream brokers are affiliated with a larger network of banks and lenders, while niche brokers are partnered with two or three lenders that meet their specific customers’ requirements.
4. Inside knowledge
You can be sure that most brokers have a good depth of knowledge of the industry, always keeping their ears to the ground to keep up with competition.
5. More capable
Compared with young loan managers with limited knowledge and who would also try to sell you every kind of insurance from health to life, most brokers have been around for a long time. It’s more difficult to be a broker these days with the bar set high these days. With big companies, brokers undergo comprehensive training upfront and year-long mentor program, as well as a diploma.
Mortgage brokerages are small businesses, thus they are dependent on reputation and word of mouth. Bank loan officers will offer their own products and will only process mortgage loans offered by their bank. Of course, you need to find out if a non-independent broker is giving preference to their own products. But the fact is brokers don’t benefit from favouring one product over the other. A professional broker will recommended the best product for you.
7. Financial backup
People who have unpaid debts that have damaged their credit rating will most likely get rejected by banks. However, there are lenders that deal specifically with bad credit loans and brokers can help people get in touch with these.
8. Credit rating help
You can expect a personal touch when working with mortgage brokers as they can work one-on-one with a client, review their specific requirements and match them with a suitable lender. You can use the services of that same broker for future loans, with the advantage of that background knowledge and past research.
9. Small, big details
Your mortgage broker can help with the forms you need to fill up and the documents you need for your home loan. Their skill set includes knowledge of the jargon and maths associated with home loans, so you can leave those up to them to tackle.
Homebuyers who do their own research and sign up for the cheapest loan usually end up derailed by the hassle of understanding the fine print later on.
Acquiring a home loan today is competitive and confusing that you the help of experts to navigate the process.
For more information contact Glen Hine at Mortgage Choice