6 Reasons to use a Mortgage Broker
Looking to enter the arena of home ownership and investment? Well, set aside your battle gear and turn to someone with expertise in the ring. That person, folks is a mortgage broker.
Gone are the days where eager homebuyers would turn to the banks to guide them on their journey into home ownership. The process was expensive and arguably convoluted – and who’s got time or money to waste these days?
Mortgage brokers hold a wealth of information and know how to save you money upfront, as well as in the long run. So let’s take a look at why they are one of your most valuable resources when looking to buy your home or investment property.
Experts who know the ins and outs
While a doctor knows all about the human anatomy, and a tradie is a whizz with tools, a mortgage broker has a wealth of knowledge of home loans.
Mortgage brokers keep up-to-date with the latest information in all things loan-related, and assess the financial needs and position of their clients on a daily basis. They liaise with different lenders regularly, complete all the research you don’t have time for, and manage the mortgage application process from beginning to end – leaving you to focus on other matters at hand.
The best bit? When there is a loan offer available to you, your mortgage broker will step in and negotiate on your behalf.
Little out-of-pocket, big gains
Commissions are paid to the mortgage broker after a loan has settled, which makes the broker’s services free for the borrower. The broker’s fee is paid both as an upfront commission and a trail commission by the lender that finances a customer’s loan.
That said, there are exceptions where you may be required to pay a fee, including whether you are paying off or refinancing your loan within two years (‘clawback fee’); if your loan is small or complicated; or if you are taking out a commercial or business loan.
That said, some brokers will simply charge a fee for their services instead of earning a commission from the lender, so be sure to enquire about this before engaging your mortgage broker to ensure they are the best fit for you.
Access to different lenders
Most brokers will be in regular contact with literally dozens of lenders from their lending panel, which benefits you in your search for your perfect home loan.
A significant portion of a broker’s role is to ensure they are up-to-date on the products offered by every lender they interact with, and then compare the terms of each loan in order to determine the best home loan for your situation.
The highly sought-after mortgage brokers are also known to maintain strong relationships with key stakeholders on their lending panel. Why is this important? Because it puts them in a good position to negotiate the best loan offer for you when it comes time to nabbing the perfect home loan for your needs. Score!
One of my favourite things about mortgage brokers though, is that if you’re a borrower who doesn’t meet the standard lending requirements due to difficult circumstances, they will know which lender to turn to for loan approval – meaning no-one is left behind on their voyage into home ownership! Champagne time!
Making fair comparisons
Choosing a good loan product isn’t just about securing a low interest rate – but with so many factors to consider before settling on a home loan product, the process can become incredibly overwhelming.
A mortgage broker will help you compare the products offered in the home loans available to you, including:
· Interest-only versus principal and interest repayments
· Fixed versus variable interest rates
· Split loans
· Offset accounts, and
· Lines of credit.
They will also advise upon the establishment fees, annual fees and discharge fees you need to consider, and whether they are affordable or especially high.
A good broker will help you understand the fees and features of the loans available to you, and explain how the different loan structures will affect you in the long run, such as how a loan product with the lowest interest rate may actually cost you more over the long term than a product with a slightly higher rate but low to no fees or charges.
Strategic mortgage advice
Mortgage brokers know how to maximise the potential of your loan, including helping you to consolidate any debts you may have, accessing equity in your property, and keeping a clean credit file. In short, your mortgage broker wants to make sure you can secure a decent loan in the future.
Review your mortgage regularly
Unfortunately, many borrowers are left out-of-pocket by thousands because they’ve paid more interest than necessary; this is typically because they didn’t get around to refinancing when rates were low.
An experienced broker will review your loan regularly and ensure you receive the best advice with regards to saving significant moolah in the future. They may negotiate with your lender for a better deal, or even suggest changing lenders or switching between fixed and variable rates so you aren’t throwing your money down the drain unnecessarily.
With so much to consider and so much money on the line, your safest and simplest bet is to engage with a mortgage broker who will do all the dirty work for you, while communicating all the essential information to you along the way.
I’ve had the pleasure of worker with many mortgage brokers in my time and have vetted the best of the best. If you’re seeking a recommendation to a mortgage broker suited to your specific needs just pop an email across to: email@example.com. We’ll pop you in contact with a broker that is just right for you!
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