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So you’re looking at buying a house. You’ve been online and done some research and talked to a few people about their experience. Someone suggested their mortgage broker but you’ve seen some good options and you’re wondering whether to contact the bank or just apply for that loan with the online form straight away? Why would you bother involving someone else in your home loan journey?
Well, there are lots of really valid reasons. Each of these reasons add up to a better chance that you can get the best deal you could possibly get at the time. Why wouldn’t you want that?
What does a mortgage broker do?
A mortgage broker acts as a point of contact between you, the borrower, and those lenders who offer loans. Their primary goal is to help you find a lender with the best terms and rates to meet your financial needs and goals. They maintain their contact and awareness of lender’s products and policies, they check your credit, collect necessary paperwork from you for the lender and work as a loan officer to help you and the lender complete the home loan purchase.
Mortgage brokers do not offer the loan, they help the borrower find the loan and help with the application process.
Why does this help you?
We spoke to Mortgage Broker and Principal at YBR Home Loans St Albans, Daniel Del Papa who says there’s power in having someone as a go-between yourself as a borrower and a lender.
“My objective is to thoroughly comprehend my client’s financial circumstances, identify their needs and goals, and ultimately select the optimal product in the market for them.”
“Anyone who has taken out a loan directly with a lender will appreciate that the process can be stressful and oftentimes you may find yourself feeling isolated or like you don’t understand what you’re looking at.”
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“As a mortgage broker, I streamline the process, saving customers valuable time that would otherwise be spent reviewing countless products, deciphering lender policies, and completing extensive paperwork.”
“The work doesn’t stop there, however. You have found the right broker when you realise that you’re more than a transaction with them. I work with customers from the point of application through to settlement and beyond. This means that I will support you on your loan journey over the years to make sure you get the most out of your loan.”
When should I use a mortgage broker?
There is no set rule for when you should use a mortgage broker, but there are certain situations where their services can prove to be invaluable. For example, if you have a complex financial situation or have been rejected by traditional lenders in the past, a mortgage broker can help you find alternative options that may better suit your needs.
Brokers can support any kind of personal situation: whether you’re just starting out on your property journey, or you’ve had a loan for a few years and you went directly to a bank the first time, through wanting to build an investment property portfolio.
“There is great diversity in individual circumstances, understanding those circumstances is crucial as there’s no one-size-fits-all solution,” says Del Papa.
“Whether you’re a self-employed individual with varied income sources, have an average credit history, hold a temporary visa, or simply seek to refinance for the lowest rate possible, my commitment is to find tailored solutions that address your specific needs.”
What should I look for in a mortgage broker?
When choosing a mortgage broker, it’s important to do your research and find someone who is experienced, knowledgeable and trustworthy. Look for someone who has a good track record of helping clients secure loans and has positive reviews or testimonials from past customers. It’s also important to ensure that the broker is licensed and accredited by relevant industry bodies.
Don’t be afraid to ask questions about their experience, how they are paid (by commission or fee) or if they have any partnerships with specific lenders. A good mortgage broker will always be transparent and put your best interests first.
Advantages that come with using a mortgage broker
1. Independent experts in their field
Mortgage brokers provide expert advice throughout the home loan process due to their extensive knowledge of lenders and lender products and of loan application requirements and processes. They are skilled at evaluating your financial information and needs and wants to connect you with the right lender.
Mortgage brokers don’t usually charge a fee for home and investment loans as they receive a commission when a loan is closed. In the odd situation where the best loan option is from a lender who does not pay commission, they will discuss a fee with you for the service provided.
2. Know the lenders, their policies and loan options
A mortgage broker is likely to have access to more lenders than you have, with a panel or up to 20-30 lenders! At YBR, our experienced brokers have over 35+ lenders available to them, meaning they can trawl through a wide range of products to find the features you’re looking for.
They know the quality of lenders that you might not have come across or have access to lenders that work exclusively with mortgage brokers. This can work in your favour as the broker should be able to identify more suitable loan options and possibly better rates than you might be able to source on your own.
“Navigating through a vast pool of lenders on your own is no easy task,” Del Papa says.
“I invest time in understanding the unique strengths of each lender, customising solutions to suit a broad spectrum of customer needs. With the intricacies of lenders’ products and policies, it can make all the difference having a mortgage broker as your primary contact, in ensuring the correct product is selected and that your application is successful.”
3. Know you and your financial goals and needs = a better product match
A good broker works with you to understand your needs and goals, your loan capacity (what you can afford to borrow).
Not only will they find options to suit your situation, but they’ll also be the support you need to navigate the process. Any question you have, a broker will have the answer, whether it’s how each loan works or what the loan costs.
4. Putting your best interests first
There are rules and regulations that ensure that a mortgage broker acts in your best interests throughout your home loan journey – rules and regulations that do not apply to lenders and banks.
How often do you go to someone for help and get transparent information? A good mortgage broker is required to be on your side.
5. Save you time, effort and money
It’s always nice to have someone else do the legwork. Mortgage brokers maintain contact with a range of lenders and their products, including some of the lesser-known but equally great options out there, so can put more options at your fingertips. They’re good at noticing difficult payment terms or other features of a loan you might not see that would cost you more upfront or over the life of the loan. All this can add up to many thousands of dollars in savings and shorten the time it takes for you to find and get that perfect home loan.
It’s a convenient way to access many products from one touch point. These days there are excellent online and face-to-face options so they can be flexible and continue to work while you get on with life.
It also is not going to impact your credit score. Each time you apply for a loan directly through a lender they run a credit check. Each of these is recorded and over time can negatively impact your credit score. So it’s a safe way to check out some options without impacting future applications.
Dealing with a broker
Don’t be afraid to ask questions – ask them for details about how they’ll help you, their fees, the lenders they work with and their experience in the business. What type of loans do they specialise in or work with the most? If a broker doesn’t seem right for you, try another one – there will be a best fit for you out there. And remember, you are not obliged to take their recommendations so it really is a no harm no foul option to make sure you’ve scoped out the best possible home loan deal for you.
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