Applying for a home loan involves several steps that may confuse some homebuyers. A mortgage broker could simplify the home loan journey for prospective buyers by offering expert guidance and streamlining the complex process.
By acting as a conduit between borrowers and lenders, a mortgage broker could make it easier for homebuyers to navigate the various loan options in the market. This can help individuals make informed choices and select a loan that best suits their financial situation and goals.
What is a mortgage broker?
A mortgage broker is a licensed financial professional that connects borrowers and lenders to organise loans.
According to the guidelines set by the Australian government, mortgage brokers may only recommend loan products that work best for their client’s requirements. Therefore, it means mortgage brokers must always act in the best interests of their clients, even though they may not charge any fees for the service.
What services does a mortgage broker offer?
From finding the right lender to lodging your home loan application, a mortgage broker can provide valuable assistance at various steps in your home loan journey.
A mortgage broker could help:
- Assess your financial needs and property goals to help find the best-suited home loan for your situation.
- Determine your borrowing capacity based on how much you can afford to repay each month.
- Identify a diverse range of home loan options tailored to your needs, including exclusive deals that lenders may not commonly advertise.
- Help you compare interest rates, fees, features, and benefits across multiple home loans.
- Put you in touch with lenders on their network who are most likely to approve your home loan, especially when you’re a non-standard borrower (such as someone who is self-employed).
- Negotiate with lenders on your behalf to help you secure a better deal on your mortgage.
- Manage your application process from end to end to help ensure a smooth ride.
- Stay with you throughout your home loan to ensure your loan is right for you across the term.
What are the benefits of working with a mortgage broker?
Working with a mortgage broker to secure a home loan may offer several benefits, such as:
1. More choice
Mortgage brokers specialise in home loans and have access to a range of products offered by various lenders. Leveraging their experience and knowledge, they can match these options to your specific needs, providing you with home loan deals tailored to your unique circumstances and financial situation.
2. Better rates and terms
A mortgage broker could help you secure a better interest rate or terms on your mortgage by leveraging their industry insights and connections. However, it is recommended to research on your own to make sure you’re getting the best possible deal for your situation.
3. Convenience
Convenience is a top benefit of engaging a mortgage broker. Given the number of products available in the market, one could spend hours searching for the right loan and still feel confused. A mortgage broker can take over the task of searching for the best-suited home loan deals for you and also guide you through the entire home loan application process.
4. Increased chances of success
A mortgage broker can help you fill out your home loan application and make sure that the right documentation accompanies it. This could reduce the chances of your application getting rejected due to any missing information or incorrect documentation.
5. You don’t have to pay anything
Yes, most mortgage brokers in Australia don’t charge you anything for their service. Instead, they are paid a commission by the mortgage lender when you sign up as a customer with them.
Are there any risks of working with a mortgage broker?
While working with a broker has several potential benefits, there may be some risks you need to be aware of. Firstly, it is essential to understand that when you work with a broker, you may only compare some of the market.
Most brokers work with a panel of lenders, and the options they suggest typically come from the lenders on their panel. However, when you do your research, you may find a better deal with another lender. Even though lenders are obligated to act in your best interests, they can only recommend products from a limited number of lenders, and there is a possibility that a broker may be biased towards a particular lender.
Furthermore, the level of service offered by mortgage brokers may differ. Not every broker will provide the same type of customer service, and you need to find a broker that you are comfortable working with.
At Hashching, we have built a platform that helps you find top-rated mortgage brokers close to you. Add your location or postcode to find a list of verified brokers in your area on Hashching. You can also see the ratings for each broker on the platform provided by actual customers.
Do you need a mortgage broker?
No, you don’t really need a mortgage broker to apply for a home loan. However, working with a mortgage broker can help you save time (and potentially money) on a mortgage. Accordingly, it’s entirely your choice to work with a third party or do the legwork in finding and applying for a home loan on your own. Hence, the decision depends on your preferences, financial situation, and comfort level with the home loan process.
If you decide to work with a mortgage broker, ensure they are licensed. You can verify a broker’s licensing status by checking ASIC Connect’s Professional Registers. Alternatively, you can call ASIC’s Infoline at 1300 300 630 for confirmation.
By Vidhu Bajaj,
Hashching Content Writer
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