You’ve probably heard the term mortgage broker thrown around a lot, but what do they actually do? In this video, I’m going to break down everything you need to know about mortgage brokers and how they can help you get the best deal on your property loan.
Hey, everyone! Michael here from Lendstreet, helping you make informed decisions about your loan and finance needs. Choosing a mortgage is one of life’s most significant financial decisions. With many loan terms lasting 30 years, you want to make the right choice, so you’re not stuck with burdensome repayments for the next few decades. This is where mortgage brokers enter the picture, but what really is a mortgage broker? Do you need one, and how do they get paid?
Today we’re going to answer all these questions and more. Hopefully, by the end of this video, you’ll have a much better understanding of what mortgage brokers do and if using one makes sense for you and your home buying journey. But before we start, we should know that this video must not be construed as professional or financial advice.
In particular, you should seek independent financial guidance from a professional who can advise you on the best ways to proceed in your personal circumstances. Okay, before we talk about anything else, what exactly is a mortgage broker?
In a nutshell, mortgage brokers are middlemen between the borrower and the lender, and they work under an Australian credit license requiring them to put the best interest of their clients first.
The benefits of working with a mortgage broker
This means, they will negotiate with lenders on your behalf to get the best possible terms, interest rates, and extra facilities for your property loan, and if you find yourself in a less than ideal situation, such as having a poor credit history or being self-employed, a mortgage broker will be able to find lending solutions that you might not be able to source on your own. Not only that, mortgage brokers are also generally very knowledgeable about interest rates
and lenders’ conditions on loans. This means they can help you compare different offers and choose the ones that best suit your needs. They typically also have access to a wide network of lenders, meaning you can shop around to find the best deal for you, and most importantly, they are legally obliged to act in your best interests which gives you an extra layer of protection. However, although working with a broker has many advantages, it’s still important.
How to choose the right mortgage broker
to do your homework first to ensure that you only work with a reputable broker that prioritises your needs over anything else. And one way to do it is to find one with deep knowledge of the property market and offer insight into the latest trends. Another thing to note is that before organising any face-to-face meetings, you can also check the broker’s lender panel and see what lenders are on each broker’s list, who prefers them, and why. Make sure you also ask them for their experience and qualifications. For example, you can check if the broker belongs to either the Mortgage and Finance Brokers Association of Australia – the MFAA, or the Finance Brokers Association of
Australia – the FBAA. Now, if you’re still curious if a mortgage broker can really help you save.
Do you really need a mortgage broker?
money on your home loan, then the short answer is yes. Mortgage brokers can be a great way to save both time and money on your loan because, as industry experts, they have the knowledge and the experience to connect you with a suitable lender plus, their expert advice will ensure that you make the best investment choices for your individual circumstances. And if you’re looking for additional services such as legal advice, assistance with real estate agent transactions, most mortgage brokers will be able to put you in touch with local professionals who can help. If
Mortgage broker vs. banks
you’re well aware of how mortgage brokers can help you, but you’re still debating whether to go for it or the bank, make sure you understand the pros and cons of each option first. If you want to deal directly with the banks, they usually offer higher interest rates expecting you not to negotiate. While you’re free to try to get lower comparison rates, many borrowers don’t have the expertise or confidence to seek out competitive options. Plus, you might not be aware of all the nice-to-haves and other additional features that can come with a home loan. A mortgage broker on the other hand, can save you thousands of dollars in interest rates and help you find the right solution
for your needs. That’s because they have good knowledge of the property market and have access to a range of products and services, allowing you to compare charges, interest rates, and lenders. The bottom line is that brokers offer many more options than banks making them better choices for most borrowers. That leads us to an interesting question which is, do brokers charge.
Do brokers charge a fee?
for their services? Well, here at Lendstreet, we believe that home buying is expensive enough without having to pay additional money to a broker that’s why we don’t charge for our services. You can access stress-free assistance to find a better mortgage deal without worrying about additional fees, but even if your broker does charge for their advice, they will likely have saved you thousands on your home loan therefore, even if you do pay a fee, it will be more than worth it in the end. But before fully engaging their services, make sure you ask these questions: (1) Number one,
Questions to ask a mortgage broker before you hire them
are you licensed? (2) Number two, how many lenders do you deal with? (3) Number three, what are your fees? (4) Number four, does the lender pay you a commission? (5) Number five, what will the borrowing costs be? and (6) Number six, what is your experience like, especially with scenarios like mine? Always remember that the primary role of a mortgage broker is to understand your financial situation and find a loan that meets your needs, so it’s super important that you choose the right one to work with. I hope you found this video informative. If you did,
remember to hit the SUBSCRIBE button below and stay tuned for more tips and advice to help you make informed decisions about your loan and finance needs. See you next time!