We Are Property Finance Experts
Finding the right home loan can be a complex and time-consuming task, especially for first home buyers. Many borrowers navigate the daunting number of options by using a mortgage broker to source their loans – over half of all residential mortgages are now written by brokers in Australia.
What Is A Mortgage Broker?
Mortgage brokers are intermediaries who stand between the borrower and a panel of lenders; their job is to understand the borrower’s financial situation and goals (brokers have a duty of care not to recommend a loan that will cause the borrower “undue hardship"). They match the borrower to a suitable loan, and package the loan to the recommended lender.
How Does A Mortgage Broker Get Paid?
A mortgage broker is paid a commission by the lender, and under legislation – the National Consumer Credit Protection Act – the estimated commission is disclosed prior to any application being made on behalf of the borrower.
Why Use A Mortgage Broker?
- Rates: mortgage brokers know where to find the best interest rates. Interest rates aren’t everything but the difference in a 25-year, $500,000 standard variable loan at 4.7 per cent, and the same loan at 5.7 per cent, is $294 each month.
- Fees: You don’t have to pay for the services of a broker. They are paid commissions by the lender once your loan settles.
- Expertise: brokers work in this market every day, so they can ensure their client is taking on a loan that suits them and their goals. From a basic variable rate loan, to a 100% offset account mortgage – and all the points in between – brokers work with you to not only find the right loan, but keep you out of the wrong one.
- Selection: most borrowers start with their current bank or lender, and perhaps research one or two other loan providers. A mortgage broker has hundreds of loans they can show you and most have software that can search the loans by your own criteria.
- Time: it’s time-consuming work to create a short list, hit the phone and make appointments with loan managers. Brokers take the leg work out of the process, create a short list with the pros and cons of each loan, and then initiate the application from their office and manage the process through to settlement.
- Paperwork: one of the frustrating aspects of applying for a mortgage (for first-timers and experienced borrowers alike) is completing all the forms correctly so they are not returned for re-submission. Because they are experts, brokers understand the pitfalls of the application process and know how to speed it along.
- Refinance: brokers are very useful when refinancing an existing mortgage. Refinancing can be complex and even experienced property owners often use brokers to do it.
- Advice: along with loan selection and applications, brokers can offer advice and experience. For instance, too many unsuccessful mortgage applications can hurt your credit rating: brokers generally know where your application is likely to have the best chance of approval to avoid this problem.
Are You Eligible for the First Home Owners Grant?
Click HERE to check if you are eligible for the First Home Owners Grant in your state/territory.
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