Should You Use A Mortgage Broker?

May 28th, 2020 - by Brad Gillespie

Whether you’re a seasoned property investor or a first-time home buyer, having the right expert help can make all the difference when buying property.

Here are the things you should know about whether or not to use a mortgage broker.

What do mortgage brokers do?

A mortgage broker acts as a liaison between you, the borrower, and lenders to organise your home loan. A good broker will work closely with you to understand your unique circumstances and goals and find the best home loan option for you. They’ll work out what you can afford to borrow and give you advice on how best to structure your loan, overseeing the whole process from application all the way through to settlement.

How to find a good mortgage broker

You want a knowledgeable, experienced broker who will act as an advisor, steering you through the options and closely managing the process, rather than a salesperson for particular products. Look for a broker with long-term experience in your market and good client testimonials. Prepare a list of questions and then shop around to compare their approach and services. Don’t feel pushed to rush into anything. Remember that making too many loan applications can negatively affect your credit score, so it’s best to do some research to find the right mortgage broker first, and then work through the process with them. Check that your broker is registered with an industry organisation like the Mortgage & Finance Association of Australia (MFAA) or Finance Brokers Association of Australia (FBAA), who require brokers to adhere to higher education standards and ethical standards aligned to government requirements.

Save time and money

Even for experienced investors the home loan application process can be daunting, particularly in a tighter lending environment or during a time when there is a lot of competition in the market. There are literally thousands of home loan lenders and mortgage packages out there, so comparing them all can be very frustrating and time-consuming. Mortgage brokers know the industry inside-out, so they will find it far easier and faster to direct you to the options that suit your specific needs. It can be very important - getting the best home loan package could save you thousands on your home loan over the years.

Get expert advice

There are a lot of options when it comes to how you should structure your loan. You’ll need to decide whether to take out a variable, fixed rate or split-interest rate loan, as well as the ins and outs of using offset accounts and redraw facilities versus opting for a cheaper loan without these benefits. A mortgage broker can help you work out what is right for you, saving you from doing all of this research yourself.

Personalised help

Different borrowers have very different needs. You may be a first-time buyer who needs to understand the first home buyer property concessions available to you. If you are self-employed, you will likely need extra help and advice on how to get your loan across the line with lenders, and even which lenders will be willing to loan to you. Property investors have their own unique circumstances and challenges. A mortgage broker can point out things you may be unaware of and make sure you have the best long-term solution.

Get the inside scoop

A good mortgage broker has intimate knowledge of the property industry and lending environment. They know what is available right now and can match you and your circumstances to the best product. With thousands of loans to choose from it’s much easier to have someone cut through the noise for you. A good broker should know about the latest products on the market and current deals, such as which lenders are offering the lowest interest rates or fees for new borrowers.

Options if you don’t use a broker

It’s always possible for borrowers to apply directly through a bank or alternate lender for a home loan. However, ever since the Banking Royal Commission the lending environment has become more complex, with tighter restrictions on lending leading to much longer application and approval times. A mortgage broker is one expert who can help guide you through the process and could make it a lot faster, and easier, for you to obtain a loan.

Getting your finance ready is essential to making your next property move. Get in touch with me today to see how I can help you buy your next property in Sydney’s inner city.