A mortgage broker is a financial professional who acts as the link between you and the lenders. They can tap into their extensive network of mortgage products to match you with a home loan that suits your situation. They’ll also go to bat for you when negotiating the terms of the loan with the lender.
If that all sounds pretty good, that’s because it is—an accredited mortgage broker works to make the home loan process easier for you. In fact, recent statistics show that more than 50% of Australian home loans are completed through a broker.
If you’ve never used a broker before, you might be wary; after all, why trust someone I don’t know with one of the biggest financial decisions of my life?
Here are 8 benefits of using a broker for your home loan.
1. Brokers understand the complex mortgage market
There’s no getting around it: mortgages are complicated. This is especially true if it’s your first foray into the world of home loans, when new concepts and phrases await you at every turn. Of course, it’s not your job to understand the ins and outs of a home loan, and that’s where a broker comes in.
A good mortgage broker helps you get your head around your loan options, so you can make an informed decision. Your broker is there to facilitate the process, so you can benefit from their expertise; they aren’t there to push you into a loan you don’t understand or want.
2. Brokers can save you money
Industry professionals have access to a network that the general public doesn’t, and this is true with home loans as well. Your broker can access deals from lenders that you might not be able to on your own, such as a better interest rate or extra features.
Mortgage brokers often use software platforms that let them search a broader range of products. They can help you access deals you’d never be able to find on your own.
3. A mortgage broker doesn’t cost you anything
You don’t pay a mortgage broker for his or her services, but the broker does get a commission from the lender. Most banks offer similar commissions, which discourages mortgage brokers from favouring one loan over another. On top of that, brokers are legally required to disclose details of their commissions under the National Consumer Credit Protection Act 2001.
4. Brokers can help with non-traditional loans
If you’re self-employed, have changed jobs recently, or have a tarnished credit rating, you might find it difficult to secure a home loan. Many lenders ask that borrowers have been in a job for a minimum period of time or be able to produce traditional proof of income.
A mortgage broker can help connect you with a lender that can work with your financial situation, perhaps by providing alternative proof of income documents. Navigating an outside-the-box mortgage is made much easier with a mortgage broker.
5. Brokers are a human dictionary of mortgage terms
You might not know the difference between an LVR and the RBA, not to mention how they affect your mortgage repayments. That’s where your broker comes in; he or she can explain these terms to you so that you understand how the different aspects and features of a mortgage impact your finances.
Your broker can clarify what the different features of a home loan do, so you can identify which ones are most important to you. This can help you choose a loan with confidence, regardless of whether or not you’ve bought a home before.
6. Brokers have an incentive to do a good job
Many people worry that mortgage brokers are more concerned with the banks than they are with their customers. The reality is that it’s much more important to foster a strong relationship with customers, because that’s who can boost business.
A broker’s livelihood depends on word of mouth, positive reviews, and a good reputation. And who are you more likely to trust: a broker recommended by a bank or one recommended by a friend?
7. Brokers give personalised service
A broker works with you from start to finish. You can expect personalised, one-on-one service from someone who will get to know your situation and your needs. It can make the process much smoother to have one point of contact throughout, from application to closing on your new home.
8. Brokers handle the bulk of the paperwork
Hate trawling through paperwork? Well, brace yourself, because there is a lot of paperwork associated with a home loan. That’s another huge benefit of working with a broker—they’ll do the heavy lifting for you, sorting through the paperwork along the way.
Your broker makes sure you’ve completed the required forms and signed on all of the appropriate lines. If there’s anything you’re unclear on, they can explain it to you. Brokers also submit the paperwork to the lenders, so you don’t have to.
There are many benefits to working with a broker, whether you’re a first home buyer or an investor looking to diversify your portfolio. Why make things harder than you need to? Save money and time by engaging a qualified mortgage broker today.