A mortgage broker is a person who assists you in finding a suitable home loan depending on your needs and goals. But how is it similar or different from an independent broker?
Mortgage brokers are licensed professionals and are similar to a matchmaker. They can match you with a lender to find a loan product which suits your requirement. They can secure a competitive rate, identify several types of loans for you, assist with the application process, and save you time and money.
Independent mortgage brokers offer the convenience of being a one-stop-shop for all of your financial needs. This eliminates the need to go to a variety of lenders in order to get the best rate and eventually, mortgage approval. Should you look for one, or are you better off directly going to a bank?
How Independent are Mortgage Brokers?
Banks own several renowned mortgage broker firms, hence brokers employed by those firms could be biased. However, most brokerages are privately held companies that can work with the four major banks as well as a number of respected second-tier or non-bank lenders to arrange home loans.
AirBroker is not owned by a bank: Our skilled mortgage brokers will give you honest home loan advice, and as credit licence holders, we are compelled by Australian law to provide you with a loan that meets your needs.
Should you work with a Mortgage Broker?
Banks and independent brokerages operate differently.
Banks usually love a straightforward deal – a strong permanent position with good income, solid credit score and ample deposit. You might get a good deal but they have limited products of their own and may reject your application if your situation does not fit their policies.
If you have challenges in your application, then a mortgage broker could be handy. They are solution-oriented and are able to negotiate a competitive interest rate.
On top of that, most brokerages are smaller than banks in terms of the scale of operation. It is likely that the brokers will give more personalised services to you, taking into account your financial goals, while working through your home loan application.
What to Look for in a Mortgage Broker?
You need to look for several things in a mortgage broker. They need to properly understand your financial goals and borrowing capacity, which will enable them to find the right mortgage for you.
Mortgage brokers can assist you in assembling the necessary documentation and filling out your mortgage application, which can be a laborious process for first-time homebuyers. They can help you identify the loan features you want, such as extra repayments, an offset account or a redraw facility.
AirBroker includes online reviews of individual brokers, where you can look at how long the broker has been in the business for and what their clients’ experience is with their service. It is important to be able to discern the brokers with good track record and years of experience in the industry from those that do not. The chances of you getting a desirable outcome increases when choosing a more experienced mortgage broker, especially if they have dealt with similar situations to yours.
How to find a good Mortgage Broker?
There are lots of mortgage brokers available in the market. You need to try to find the right mortgage broker. For this purpose, conducting research can be an excellent early step. You could rely on the recommendations from your experienced family and friends. Also, you need to compare their fees and experience.
You could either rely on a combination of these outlined or all of the below.
- Recommendations from family and friends: Your family and friends might have used a mortgage broker so, reach out to them and ask them about their experience. You could ask if they were satisfied with the service they received, or would they work with them again, etc.
- Ask locally, e.g. your neighbours: You can ask your neighbours or the people around the property, you are seeking to purchase if they know a mortgage broker. Or, you could also search for a mortgage broker in your local area, if one is available.
- Referrals from a real estate agent/accountant/buyers agent: Asking these people might be a good source to look for mortgage brokers as they usually have contacts with the brokers in that area. They might be able to recommend qualified brokers to work with you.
- Search online: Most independent mortgage brokers have an online presence and you can start looking out for them online. You can compare their profiles and check out their content on the Internet, which is considered as authentic and vital as physical presence these days.
- Read reviews: You can refer to the reviews and testimonials of past customers of mortgage brokers on our platform. You can get information from them about the broker’s ability to complete the job, their communication (or lack thereof), or any challenges in the loan process and how they overcame them.
Compare brokers
You can shop around and compare mortgage brokers. There’s no harm in getting a comparison between the brokers.
While comparing mortgage brokers, the following questions might help you to narrow down your choices and come to a conclusion.
- What types of mortgage loan products do you offer?
- What panel of lenders do you work with?
- What are your fees and charges? Do you charge upfront fees?
- Have you worked with borrowers in my situation before?
Conclusion
The choice of lender is secondary to consumers as long as you can get the best type of loan available to you. You can only find the best home loan arrangement by researching and comparing from a wide range of lenders, and the entire process can be handled and supported by an independent mortgage broker.
Make a comparison about things such as interest rates – variable rate or fixed rate, loan terms, lenders mortgage insurance, down payment requirements and costs such as application fees or other upfront fees on every loan option you receive from a mortgage broker or financial institution.
Do not settle on the first bank or first mortgage broker that you speak with. You might miss out on good deals out there available for you. After all, you are making a huge financial decision and you want to be able to trust the advise given to you. Speak with an independent mortgage broker to learn more about your opportunities, goals and needs.
