When looking at buying a home, obtaining a home loan and researching the various options available can be both challenging and time consuming. With so many lenders and banks to choose from knowing where to go isn’t always easy, which is why in many cases people prefer to work with a mortgage broker.
What is a mortgage broker?
As a finance professional, a mortgage broker specialises in finding the most suitable home loan or refinance option to suit a borrower’s individual circumstances. Acting as the middleman between the varying lenders and you, a mortgage broker is customer focussed, taking the time to get to know you, your financial situation and long term goals.
What do mortgage brokers do?
Acting as the go-between with clients, banks and non-bank lenders, a mortgage broker can make all the difference when looking to find the right home or investment property loan. Not only do they make the loan application process less daunting and time consuming, but they are also able to take your information to find the loan option for your needs. This is really what sets a mortgage broker apart as they can compare a range of options once they understand your full situation.
- A reputable and experienced mortgage broker will work with you to understand your goals and objectives.
- From the information you provide, they will work out how much you can afford to borrow, (also known as your borrowing power).
- Using your information, they will compare various loan options from a range of different lenders before presenting you with the recommendation that best suits your needs. They will also explain the ins and outs of how the recommended loan works for your situation and borrowing capacity.
- Mortgage brokers know how lenders like the information presented and will put together and submit your loan application, handling the process right through to loan approval and settlement. They will help to organise your documents, speak directly to your chosen lender and act as your single point of contact.
- Over the life of your loan, they will ensure you are getting the best deal available and reassess when needed.
- Help you to release equity from your property.
Why should you use a mortgage broker?
Direct client relationships
A good mortgage broker will have strong relationships with various banks and non-bank lenders. This allows them to access a wide variety of home loan products and puts them in a better position to negotiate the best deal.
Expertise
With an in depth knowledge of credit policy and various loan products, they make the process of obtaining a home loan streamlined and stress-free.
They know what to look for
A mortgage broker knows the exact information lenders require and how to present the information to increase your chances of getting loan approval upfront.
Specialisation
Mortgage brokers often work within specific niches. Whether you are self-employed, a health professional, or legal professional, a first home buyer, or an investor, a mortgage broker can help navigate what can often be a complex process. They will also be able to assist in identifying if you are eligible for any specific lender policies or loan products.
Refinancing
Aside from finding the right home loan, mortgage brokers also assist clients looking to refinance their current loan/s. As with loan applications, multiple applications for refinancing can affect your credit score. A mortgage broker will be able to determine the best course of action and the right refinancing product.
Simplify the loan application process
Working through the application process yourself can be challenging. A mortgage broker will not only find the best rate and finance terms that match your requirements, but they will also handle the entire application process and correspond with the lender on your behalf.
Access to a wider range of loan products
With direct lender relationships, a mortgage broker will have access to a wider range of loan products than if you were to go it alone, matching your needs with the appropriate loan option and competitive interest rates. If you have previously been knocked back for a loan because you didn’t meet standard lending requirements, they may be able to assist in securing a loan through another source such as a non-bank lender.
Access to suburb and property reports
Depending on the broker you choose to work with they may also be able to provide you with a complimentary suburb report for your chosen location. This kind of report will outline comparable sales, long term trends and the general demographics of the area. If you are looking at a particular property, they may also have access to a property report detailing the sales history, estimated value and how many previous owners there have been.
Things to consider before choosing a mortgage broker
When looking for a mortgage broker some key things to keep in mind include: –
- Are they registered with ASIC (Australian Securities and Investments Commissions)? Are they are a representative of an Australian Credit Licence holder or have an Australian Credit Licence?
- It is also a good idea to ask any broker you are looking to engage with how many lenders they work with. The more lenders they have access to the more likely they will be able to find you the best deal.
- Most brokers don’t charge fees but rather receive a commission direct from the lenders they work with. It is a good idea to ask if they charge or don’t charge a fee for their services.
- Remember recommendations are always good, so asking friends or family you trust if they have any recommendations for mortgage brokers can be helpful.
Top questions about what mortgage brokers do
Is it cheaper to go through a mortgage broker than directly to a bank or non-bank lender?
Often mortgage brokers will have access to a wider range of lenders and loan products and are generally able to negotiate better interest rates directly with lenders than are offered to the general public. As finance specialists, they will also be up to date on credit policy and current market offers. Typically, most brokers don’t charge for their services as they are remunerated by the lenders they work with if you take a loan out with them.
Mortgage broker or bank: which is better?
This comes down to your individual situation. As with anything both have their pros and cons, so it is always a good idea to do your own research. Different lenders have a wide range of credit policies which may or may not apply to your specific circumstances. A mortgage broker will be able to assess the various loan and credit policies against your requirements in order to find the right lender and loan product that suits you.
Why use Townsend Wealth as your mortgage broker?
At Townsend Wealth we don’t just help you find the right finance option; we take care of the entire process from application right through to settlement and beyond. After your loan has settled, we maintain strong client relationships conducting regular reviews with lenders to make sure you continue to receive the best interest rate and most competitive finance terms. In the event we think you could get a better deal through refinancing we will talk it through with you.
We pride ourselves on our ability to break down complex financial jargon to ensure you feel confident in your decisions and the home loan application process. Offering an end-to-end solution, our team of mortgage professionals are with you every step of the way. We help clients throughout Sydney including the Northern Beaches and North Sydney.
We also take a customer centric approach and where required work closely with your accountant, buyer’s agent and financial planner to ensure we not only advise the best loan product for your needs but ensure it is structured correctly from a taxation and cashflow perspective.
Organise a no-obligation free assessment
If you would like to organise a free assessment or for more information on our services and how we can help, please contact us on 02 9954 6104 or fill out our online form.
