Using A Mortgage Broker

Mortgage brokers have continued to grow in popularity with Australian home buyers, and with good reason. Brokers play a big role in the home loan industry, but there are a few things you should know before using their services.

Up until recently mortgage broking in Australia was unregulated, but thankfully there are now national guidelines that all brokers must meet with regards to their qualifications and the way they deal with their clients.

It is hoped that the national guidelines for mortgage brokers will help to provide more Australians with good quality advice on their home loan needs.

The role of mortgage brokers

The primary role of a mortgage broker is to find a loan that is appropriate for your needs. Once they have recommended a loan, the next part of their role is to guide you through the application, approval and settlement process.

Increasingly mortgage brokers are diversifying into other areas such as insurance. When taking out a home loan you may find that your broker can also assist with insuring the home as well as providing other insurance advice.

Benefits of dealing with a mortgage broker

Here in Australia we have a very strong mortgage industry and there are plenty of different banks, building societies, credit unions, non-bank lenders and other financial institution offering a wide variety of home loan products.

Having a diverse range of lenders and loan products to choose from is great, but finding your way through the dozens of different products and all the different features and benefits can be time consuming and even impossible for some people to do properly.

This is where a mortgage broker can help. A mortgage broker spends all of their working hours dealing with home loans, giving them a great understanding of the market. This enables them to quickly identity which loans will suit you best.

A mortgage broker acts as your point of contact between you and the bank when you are having your loan approved. Because the broker has a good understanding of the bank’s approval guidelines as well as your financial situation, they are best placed to fight for your approval rather than leaving you to deal with the bank on your own.

Many mortgage brokers have also diversified into insurance products over the last few years. This means that when taking out a mortgage they may be able to assist you with other financial matters such as insuring your new home. This can save you even more time and potentially money.

What to look out for

There are a few things to look out for when using a mortgage broker.

Although mortgage brokers are required to meet minimum education requirements before becoming qualified, these requirements are quite minimal. A new mortgage broker could enter the industry with no experience and complete a one-day course to get qualified.

When choosing a mortgage broker you should take a close look at their experience and time in the industry rather than relying on a single qualification.

Mortgage brokers are not required to recommend the ‘best’ home loan for your needs. They must recommend a home loan that is simply appropriate for you. A broker could legally recommend a certain loan to you because they prefer dealing with that particular bank, even if it might not be the best bank for you.

When a mortgage broker recommends a loan to you, make sure you ask them exactly why they are recommending it. Also ask them if it is the cheapest option, and if not, why is it worth paying more for the loan?

Should you use a mortgage broker?

There are benefits to using a mortgage broker, however there are other options available. There are now a number of websites available that allow you to compare the interest rates and fees from different lenders online, allowing you to find the best loan on your own.

If you have a good understanding of home loans you may be able to find the best deal yourself using the internet, but if you prefer to seek professional assistance an Australian mortgage broker is certainly a good option.