In this article we’ll take a look at the real reasons mortgage brokers exist and analyse the benefits to you inherent in the question “why use a mortgage broker?”
Here are the topics we are going to cover:
- What a mortgage broker can do for you
- Evaluating your financial situation
- Searching for a suitable loan
- Proceeding with the application process
- Industry insights and sound advice at each step
Mortgage brokers in Australia are experts in home loans so they can provide you with professional recommendations by matching your needs with the products of lending institutions. Thus working with a licensed and experienced broker, you will gain access to wide range of lending products. There is a high chance that a home mortgage will be one of your largest expenses in life, so it makes sense to get advice from professionals.
1. What Can A Mortgage Broker Do For You?
There is a wide range of Australian mortgage products and it can easily feel overwhelming. According to the 2015 Mortgage Report by Deloitte, loan origination will increase by between 6 and 10 per cent in 2016, which will only be tempered by increasing unemployment and the effect of macro-prudential rules. With this expected increase, lenders will likely offer even more mortgage products.
So a mortgage broker can help you explore the vast ocean of home mortgage products offered now in Australia.
A vital protection for consumers under the National Consumer Credit protection (NCCP) is the responsible lending obligation of mortgage brokers in Australia. The goal of this protection is to make certain that the mortgage contract will be suitable to your financial circumstances.
Responsible lending obligations mandates Australian mortgage brokers to initiate enough consumer inquiries about their financial circumstances, their needs, and goals relevant to the mortgage contract
The consumer inquiries will be the basis of the assessment to determine if the mortgage product is suitable for you. The mortgage process will only proceed if the product is deemed suitable to your financial situation.
2. Mortgage Brokers Can Help You Evaluate Your Financial Situation
Your mortgage broker will allocate time to discuss your needs and current circumstances. This is an important step in determining the most suitable mortgage.
To make the process easier, you should provide the necessary supporting documents identifying you and your financial situation. The documents that are required include a current ID, bank statements, payslips, tax returns, outstanding loans, and other pertinent papers. Your mortgage broker will provide you with a list of the required documents.
Your mortgage broker will then find the best mortgage products available. Be sure to ask your broker to guide you through the different products and also show you repayment schedules and upfront fees.
3. Mortgage Brokers Can Help You Look For The Right Loan
After evaluating your financial needs and objectives, your mortgage broker will browse through their portfolio of loan products from different lenders. These can include big banks, credit unions, smaller banks, and non-bank lenders. Be sure to choose a broker who knows the latest deals from as many lenders as possible. There are brokers who also have access to exclusive mortgage products that may not be available if you work directly with the lender.
Fintech is also now being used in the mortgage industry. Sophisticated software can help brokers complete labor intensive tasks and often produce a graph or a comparison table to help with your decision.
Usually, you will also have access to a comparison rate, which will allow you to study the different fees, charges, and interest rates. Comparison rates can help you identify the actual cost of the loan, assisting you in comparing loan products.
4. Mortgage Brokers Can Help You Proceed with the Mortgage Application Process
If you want to proceed with the mortgage application, your broker can help you accomplish the required paperwork and will liaise with the lending agency on your behalf. Your broker will help you complete and then submit your mortgage loan application as well as communicate with the lender until the loan goes ahead.
Remember, your mortgage broker should inform you of the complaints procedure, which is known as the Internal Dispute Resolution process. Make sure to ask about this before proceeding with the application.
5. Mortgage Brokers Can Provide Industry Insights and Advice at Each Step
There’s no better way to understand the mortgage industry than to get direct information from an insider. Mortgage brokers are experts in their field, and you should choose a broker who has been in the game for several years. You should perform your due diligence before deciding to take a mortgage loan, and your mortgage broker can help you understand each step of the mortgage process.
Take note that there are several steps in the mortgage loan process, and a professional broker can help you from the very first step, like securing pre-approval.
Choose a mortgage broker who can also provide a mortgage loan analysis specific to you. After this analysis, the broker can help you minimise your repayments, consolidate debt, or release your home equity. Brokers can also help you with your refinancing needs when your goals or financial conditions change.