Why use a Mortgage Broker?

Mortgage brokers play a vital role in the home loan market. They’re experts in the loan process and will help you secure a loan for a home, investment or other commercial purpose.

Mortgage brokers provide an efficient and cost-effective service, assisting you in researching, organizing and negotiating a loan that will best suit your lifestyle and financial situation. A mortgage broker’s role is to act as an intermediary between the lenders and borrowers, ensuring that you get the best possible loan. They will not only help you discover the most competitive loan for your needs, but guide you through every step of your loan application. Overall, they aspire to help you save money, figure out a suitable loan structure and secure you the best deal.

Tools available to mortgage brokers

The variability of interest rates, products and fees across loan products, along with a large number of lenders in the market highlights the complexity of the loan process. Loan-tracking software is used by good brokers as a means to electronically keep tabs on the latest data and access the different loan products on offer. This software is very useful in a market where changes occur daily, or even hourly. If you choose to use a broker, they will happily guide you through different options on the computer, showing you various loan products in a language that you will easily understand.

Mortgage brokers also have access to information relating to the property market. Whether you’re selling or buying, it’s important to understand the worth of a property in the current market, as well as the current trends in the property market. Property values reports and suburb reports are useful tools that are utilized by respectable mortgage brokers and real estate agents. By using a mortgage broker, they can give you access to these property value reports.

How are Mortgage Brokers paid?

Most mortgage brokers don’t charge you a brokerage service for a home loan as they work on a ‘contingency basis’ whereby they the lender pays them once your loan settles. The interest paid through a broker is generally the same as what the lender advertises, although with a broker you’ll receive their professional service, guiding you through the loan process. Brokers can be viewed as intermediaries that help lenders promote their loan products, whilst offering borrowers access to a wide range of cost-effective options. If you are unsure of how your mortgage broker is paid, feel free to ask them.

Using the Services of a Mortgage Broker

Finding a reputable mortgage broker that you are comfortable with is of the utmost importance. After all, you want to be sure you secure the most suitable and competitive loan. So consider the following points when choosing your Mortgage Broker.

Service for no charge:

Broker’s services for residential loans should be free of charge. Their entire service which should include: advising and giving you information on loan products, negotiating the loan on your behalf, and managing your paperwork through to settlement, should be provided at no charge to the borrower. Ensure that your broker is open with you about how they are getting paid, and they disclose what commissions and payments they will receive from the lender.

Qualified and experienced:

You should check what qualifications and experiences your broker has had in the loan market, and don’t be afraid to request references from previous clients if you wish. Also, check if they are a member of the Professional mortgage association (MFAA/FBAA) or a member if an external dispute resolution scheme. Ask your broker how they comply with the Privacy Act so that they will maintain your personal and financial details securely.

Good brokers should have the tools to assist in your decision making, such as being able to show you on computer software how different loans will impact your financial situation, and access property valuation data to help you in making your decision.

Understanding your situation:

The initial meeting should begin with your broker familiarizing themselves with your entire financial situation, and your future plans. To assist the broker in doing this, ensure that you have your key documents with you when you visit them, as this knowledge will help them find loan products that fit your lifestyle, whilst ensuring that it provides you with flexibility for any future changes.

Making buying your new home easy:

Once they have a good understanding of your current and future financial situation, they can begin explaining the wide range loan options available from a host of differing lenders. They should be able to explain the various loan products in plain English, as well as explaining the loan process from application to closing including the documents required through the process. In addition, they will explain all associated costs, disbursements, and fees of the loan application and give you a written schedule.

You can expect your broker to negotiate with the lenders to find the best deal while communicating with you throughout the loan process in a timely manner. Through the application process, they will follow up the lender for you from application through conditional and on to unconditional approval. Even once your loan is settled, good mortgage brokers are your resource for questions, concerns and ongoing review.