Mortgage Brokers analyse the loans available, select a lender that suits your needs and help you to prepare your application so that you can get the loan you need.
Which loan is right for you?
Deciding which home loan is right for you can be a time-consuming task. Even with the help of online comparison tools and calculators, it isn’t always easy to understand exactly what each lender is offering. For many home buyers, engaging a mortgage broker is the simplest solution.
Here are the three main ways a mortgage broker can help you with your loan.
1. Compare home loan options for you
A good mortgage broker will have up-to-date knowledge of all the home loan products on the market. These can number in the hundreds – so a Mortgage Broker can help narrow down the options to those that are best for you.
Discussing all your home loan options with just one person saves time. It also allows you to ask informed questions about the differences between each loan including:
The interest rates you can expect to pay.
Interest rate terms – can you choose a variable, fixed interest rate or split loan?
Other fees associated with the loan.
2. Help you find out how much you can borrow
Talking through your home loan options with a mortgage broker is also a chance for you to take a close look at your finances to decide how much you should borrow to protect your finances in the long term.
Many borrowers report that discussions with banks end in an offer of a much larger loan than expected. This can put you risk financial strain – especially if interest rates rise. An experienced broker should discuss how you would manage your finances if this happens and aim toward a loan that allows flexibility into the future.
3. Set up your home loan pre-approval
If you decide that one of the options put forward by your mortgage broker is going to meet your needs, they can take the next step and set up pre-approval from that lender. Organising home loan pre-approval means you know exactly what your budget is, which puts you in a much more informed position when heading to auction or looking at potential properties.
Who pays the mortgage broker?
The good news for borrowers is that mortgage brokers usually don’t charge for their services. Instead, they are paid by the bank or lender. The lender pays brokers for loans written, because it means they do not have to employ staff themselves, or establish and maintain branches. For this reason, mortgage brokers may also be able to get lower rates than if you went directly to a branch for your loans.
The amount paid to the broker will be disclosed clearly in the Credit proposal that you receive when you are offered a loan.
Finding the right mortgage broker
Before you engage a mortgage broker, make sure you: