In an age where it seems like we can do everything on our own with the help of a YouTube tutorial, some would-be homeowners may be reluctant to work with a mortgage broker. This is especially true for those with limited finances, who may think they can save money by doing things independently and avoiding fees.
This is where we bust an important myth about mortgage brokers: you (the borrower) do not pay them. The lenders do!
Did we just change your mind about the possibility of using a mortgage broker to secure your home loan? Read on to learn about mortgage brokers and how you may benefit from working with one.
What Role Does a Mortgage Broker Play for Borrowers?
If you ask some brokers, they might say “therapist,” but a broker acts as a sort of intermediary between the borrower and potential lenders.
Just as you might seek a physician’s help in determining the best medicine to treat a particular health concern, an architect’s help in designing your dream home, or an auto mechanic’s help in pinpointing that strange noise coming from your engine, borrowers are giving themselves a leg up by working with a broker to secure a mortgage loan.
Mortgage brokers bring expertise to the table that the average borrower and home buyer may not have; they can assess your financial situation, including your earnings, savings, and goals, to help you find the best possible home loan available.
Brokers do not just point you in the direction of the mortgage loan and say, “good luck.” They work with you through the application process right up to the loan settlement. Mortgage brokers can advise you on everything from factors affecting your loan application to tips and tricks for getting accepted. They can advise borrowers on lenders mortgage insurance, loan fees, and everything you need to know to find the right loan.
Qualified mortgage agents and brokers can be incredibly helpful for any borrower, especially first-time borrowers.
The Benefits of Using a Good Mortgage Broker
There are a host of reasons why using a good mortgage broker will be worthwhile for any borrower. They make the process easier from start to finish by offering:
- Legwork: Brokers do all the legwork for you, saving you time, energy, and perhaps frustration. It can be incredibly helpful to “outsource” the home loan research process for busy professionals, young families, and others with demanding schedules.
- Comparison Guides: Mortgage brokers can create loan comparisons for you, highlighting key differences and similarities between particular loan products and multiple lenders, allowing you to easily see what loans are best for your scenario.
- Protection for Your Credit History: Rather than getting bad marks with every home loan rejection, a mortgage broker can narrow down the loans you are most likely to qualify for to reduce these dings to your credit score.
- Mortgage Advice: The greatest benefit of using a mortgage broker is access to sound advice from a trusted professional. Mortgage brokers can steer you in the right direction, answer your questions, and even ease your fears and concerns about taking on debt with a new mortgage.
- “Free” Service: Mortgage brokerage firms do not work for free, but their services are typically free to you. They are incentivized by commission from the lenders, and most mortgage brokers do not charge fees to borrowers. However, you should always confirm the fee structure with a mortgage broker before using one, which will ensure you avoid surprises!
Mortgage brokers are responsible for roughly two-thirds of all Australian home loans, showing that borrowers trust them to manage billions of dollars worth of mortgages and are incentivized with fees paid by a mortgage lender who values their services.
Choosing a Mortgage Broker
While convincing a borrower to use a mortgage broker may be relatively easy, the next task can be overwhelming: choosing a broker to assist with your home loan.
There are more than 7,000 mortgage broker businesses in Australia, and a borrower who is already looking to save time by using a mortgage broker certainly does not want to review each and every one.
Chances are you may hear recommendations from family, friends, colleagues, or neighbours who have had a positive experience with a broker, and you can also take a look at consumer reviews online. You want to be sure any mortgage broker you are considering meets these criteria
- It is licenced by the Australian Securities and Investments Commission (ASIC)
- Is a member in good standing of either the Finance Brokers Association of Australia or the Mortgage and Finance Association of Australia
- Offers convenient appointments that suit your schedule
- Gives you plenty of personalized time and attention, answering all questions you may have about the home loan process
To do the best possible job for you, a mortgage broker should have more than just an Australian credit licence: they should ask several questions about your financial situation, from your salary to your dependents to your future plans. Mortgage brokers should not just look for a short-term win for the home buyer; they should also look for a mortgage loan product that will also serve your long-term needs and goals.
Do Your Homework…Still
Just because you are seeking the assistance of a mortgage broker does not mean you have to surrender all of the legwork. Any borrower can do some general research to determine what may be available to them regarding current home loans and interest rates. By prepping yourself with some basic information, you will be better equipped to discuss options, terms, and fees with a broker.
In addition to what you learn, the mortgage broker may be able to introduce options you had not explored or gain access to loan products with lower rates and fees that may not have been available to you as easily if you approached the bank on your own.
At Zanda Wealth, our consumer reviews will tell you everything you need to know about the commitment, expertise, and customer service our brokers bring to the table.
Contact us today to learn more about why working with a Zanda Wealth mortgage broker can make all the difference for you in securing a home mortgage.