Securing the finance to kick start your dream of home ownership isn’t as simple as heading to the nearest bank or financial institution.
With an explosion of smaller lenders to provide competition for the big banks, and a range of financing options available, savvy consumers can find mortgage lenders who have their best interests at heart.
This is done by connecting with a mortgage broker who is experienced, up-to-date, professional, and not motivated by profits.
If you’re ready to move forward and own your own home, here’s how to choose the best mortgage broker in 2019.
Why Do I Need a Mortgage Broker?
With so many loan products and lenders to choose from, finding the right product can be a daunting process. However, it pays to have a little help to ensure you put your best financial foot forward.
For this reason, you might want to consider working with a mortgage broker to help you narrow down your choices and provide the experienced support that can cut through the jargon and help you secure the capital you need.
Without a good knowledge of the finance and mortgage industry, it can be a confusing, difficult and time consuming task to find a mortgage deal without the advice and guidance of a professional broker. This represents the core benefit of using a mortgage broker - you’ll be able to tap into vast industry experience to get the best deal for you.
As a mortgage broker deals with the intricacies of loan applications each day, this can be a huge benefit for the first-time home buyer who may not have the necessary knowledge to understand the risk and reward that comes with securing a mortgage.
The second key benefit is a wider access to lender products. For example, a broker could have hundreds of lender products in its books. This access to premium resources, alongside industry experience, will help you find the one that suits you best.
What Else Does a Mortgage Broker Do?
To find the best mortgage lender for you requires an up-to-date understanding of the lending market.
What may have seen as the gold standard in years gone by may no longer suit your unique needs. For this reason, mortgage brokers may provide the nuanced approach that reflects the latest trends in the lending industry.
Gone are the days of a ‘one size fits all’ mortgage application. If your situation is unusual, your mortgage broker may be able to connect you with a lender more likely to say yes.
For example, are you struggling with issues relating to bad credit? In this situation your broker can direct you to lenders where credit history doesn’t have as large of an effect on your ability to secure a mortgage.
In addition, having a broker means partnering with a service that does the hard work on your behalf. Your broker will typically handle most of the processing requirements for your mortgage, including (but not limited to):
- Find a suitable loan to suit your financial circumstance
- The collection and submission of supporting documents through to settlement
- Data analysis to make the experience a lot less stressful for you
- Provide professional advice and guidance at every step
How Do I Find a Mortgage Broker?
While using a mortgage broker brings a lot of benefits, the challenge is finding the right one for you.
According to mortgage experts Maxiron Capital, a simple method of securing the right mortgage broker for you is to just ask, saying “ask around before making an informed decision. A good way to do this is to seek advice from family and friends who’ve used a broker before and research their recommendations.”
It’s best to ask questions that will give you a good impression of your potential broker’s professionalism and personality.
For example, you can ask them, “How long have you been operating in the mortgage brokerage or finance industry?” and “What steps will you take to determine the loan type that best suits my financial situation?”
It’s also worthwhile to ask if there are any major challenges associated with their lending requirements and if so, how they’d suggest you manage them.
You can then ask yourself whether you’re comfortable with their services. Think of whether they seem enthusiastic and genuine towards you for the right reasons.
How Does Payment for a Mortgage Broker Work?
You want to make sure your mortgage broker is invested in your success outside of financial incentives.
According to the experts at Empowered Finance, adopting a personal approach can be just as beneficial as ticking all the professional boxes, noting “your broker should take a keen interest in your situation, and asks you the right questions. A good broker will also ask you about your specific needs and goals, and work with you to formulate a plan.”
What your broker earns in fees or commissions for arranging a loan is often paid by the credit provider whose loan products they sell. Certain mortgage brokers may charge you a fee, either in addition to or rather than the commission of the provider.
Do Mortgage Brokers Need to be Licensed?
It’s vital to ensure your potential broker is licensed as there have been instances of scam artists posing as mortgage brokers in an attempt to scam unsuspecting buyers. For this reason, be sure to check the qualifications and accreditations of your potential broker.
All mortgage brokers should hold a valid Australian credit licence or have a credit representative status. They should also belong to the Mortgage Finance Association of Australia or Finance Brokers Association of Australia and comply with its code of practice.
According to the financial experts at Metro Bookkeeping, checking for the full range of lending options available to your broker should be a priority, saying “you should also check to see how many lenders are on the broker’s panel. Ideally, a mortgage broker should have access to all the main lending institutions, including the four big banks, credit unions and 2nd tier lenders.”
It’s worth noting that a more robust mortgage broker may have more options, which increases your chances of finding the right product to suit your needs.
Finally, be sure to also ask for referees. Brokers should be more than willing to provide references from happy clients.
By following these simple steps you’ll be best placed to find the mortgage broker that’s right for you, and in turn the mortgage that’s right for you, to own the dream home that was made for you.
Jack Poole is an Australian writer and business student living in Sydney. He is extensively knowledgeable in financial-related topics. Jack has a passion for the arts. When he’s not studying or writing, you’ll find him frequenting the art museum.
Disclaimer: This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.