What is a Mortgage Broker?
Mortgage Brokers are intermediaries between those seeking loans and the Lenders.
We all heard that the middlemen are something to be cut off, but in the case of Mortgage Brokers the opposite is true, especially in mature mortgage market like Australia.
They guide potential buyers who need to find a loan to purchase a property, car or whatever case might be, through the huge range of deals, interest rates and incentives available.
The mortgage broker offers financial advice and recommends the most appropriate mortgage for the buyer.
Mortgage Brokers listed in this directory do not charge buyers in most cases, instead they are paid commissions by the lenders.
The buyer still receives the same deal through the Mortgage Broker as from the Lender directly, plus a large array of other services.
What is a Mortgage Broker in Australia?
Mortgage Brokers in Australia adhere to the industry Code of Practice, carry professional indemnity insurance, undergo probity checks and training to maintain their accreditation.
Every Mortgage Broker listed in this directory is a member of "Credit Ombudsman Service Limited" (COSL), Australian Financial Complaints Authority (AFCA) and either "Mortgage & Finance Association of Australia" (MFAA)
or "Finance Brokers Association of Australia" (FBAA) and complies with Australian regulations like "National Consumer Credit Protection" Act (NCCP) and Privacy act.
Code of Practice requires Mortgage Brokers to reveal the commissions they are being paid by a Lender on a particular Home Loan product.
What is a Mortgage Broker for me?
Mortgage Broker is your guide through the maze of contemporary complex financial market with its hundreds of loan products and complicated loan conditions.
Moreover, sometimes this maze becomes a minefield where you can seriously hurt yourself.
It is estimated that in Australia some 75% of loan volumes are done through Mortgage Brokers. More often than not, taking a loan is much more complicated than looks on a surface.
In the wake of GFC the lending and credit guidelines are tough as never before. The last thing you want is to have an unsuccessful credit query record in your centrally held credit profile.
You better have a Mortgage Broker covering your back, especially when that comes at no cost to you.
Mortgage broker is a specialist in the Loan Market
The loan market changes every day. In Australia there are 4 major banks, 4 non-major banks, non-bank lenders and non-conforming lenders.
In total it comes to around 30 lenders with over 800 products with each loan product having a dozen of financial parameters and innumerable conditions.
Seriously, do you think you can find the best deal without help of a Mortgage Broker?
Mortgage Broker is who finds a better deal
Taken the number of loan products on the market you really need a Mortgage Broker to find a loan that suits you best.
While some lenders appear to offer attractive interest rate, they recoup by charging all sort of fees and penalties. Introductory rates skew the picture even further.
Comparison rates are calculated for an average loan and average term. Your situation is likely to be different from average.
For example, you might want to save money by paying off your mortgage faster, but will be losing money paying penalties! You might already have another loan, which again changes everything.
A Mortgage Broker will look for a loan that is best for your situation.
Mortgage broker is who saves you time
As mentioned above, loan hunting is something better left to professionals. If you want to DIY and achieve the same result, it will take you a long time.
Time is of great importance if you have already entered into a contract of purchasing a property. Failure to secure loan by settlement date is a disaster you want to avoid at any cost!
Mortgage Broker is who gets the loan fast
Lenders don't always have money to lend. There may be periods when you are not the priority for that particular lender.
In that case the approval process will be lagging for a long time, and you might not have that time!
Unlike Mortgage Brokers who draw loans every day you don't have enough statistics to tell which lender is holding foot on the brake this week.
Even if that lender has enough funds, using a Mortgage Broker makes sure that everything is submitted in one go rather than time is wasted to documents Ping-Pong.
Mortgage Broker is who safeguards you
When you go DIY you are relying on lenders' advertising, and we all know how far advertising may be removed from reality.
We also learned from GFC that financial products are made as difficult as possible to understand, leave along compare.
Unless you have a legal team behind you, your next best bet is a Mortgage Broker.
Mortgage Broker will also liaise with your real estate agent, solicitor and accountant to ensure a trouble-free settlement.
Mortgage Broker is your advocate
When you apply for a loan with a lender, that fact is recorded in your credit history.
Even if you just did not care to follow your application through or you were indeed unsuccessful, the result is decrease in your credit ranking.
Some financially-sound people have low credit ranking just because they were so efficient with their money that ranking algorithms play safe due to insufficient data.
Whatever case might be, it is safer to have a Mortgage Broker to apply for a loan because they know which lender's concerns to address and have the opportunity to advocate.
When you go DIY there is always a risk to do damage to your credit history.
Mortgage Broker is who goes where public is not permitted
Some non-bank lenders do not keep staff to deal with general public, instead they sell their products through brokers.
Obviously, that makes their operations less expensive and their products more competitive. In addition, some discount packages are never made public by lenders.
Mortgage Broker is who bargains a better deal for you
No lender has a reason to give you the best deal unless they run into risk of losing your business.
Even if you don't want to deal with any lender except the bank you love, Mortgage Broker can leverage his/her knowledge of the loan market to negotiate a better deal with your bank.
Mortgage Broker is who normally won't charge you
Mortgage Brokers listed in this directory in most cases don't charge fees for their service. Instead they receive commissions from lenders.
By using a Mortgage Broker you should receive the same rate as directly from the lender, so you are not losing anything but may save by getting a loan that is optimal for you.
In rare cases a Mortgage Broker may ask buyer for money when getting a Business (Commercial) Loan,
or too much paperwork is required with close to zero chance of getting the loan.
In that case the Mortgage Broker will raise this issue during the first meeting. You should receive no surprise bills from Mortgage Brokers listed in this directory.
Time is money. Find a Mortgage Broker now.