An online mortgage broker is a professional who helps people in finding a suitable home loan for them as per their requirements.
They are almost similar to mortgage brokers in person – the fundamental difference between these is that online brokers operate online via the Internet. All the remaining functions are the same.
On top of that, online mortgage brokers usually operate remotely. It lowers their overhead costs which may help in allocating their revenues in better serving their clients in the long run.
What Mortgage Brokers Do
Mortgage brokers liaise with banks and assist their customers in finding a suitable mortgage. They are the intermediary between these two parties in the home loan market, and it is in their interest to arrange the best deal for their clients.
An online broker will understand your scenario, compare various mortgage options with several lenders and provide the best deal for you. They can find competitive home loan rates that best suit your circumstance. The mortgage broker will handle the entire loan application process from submission to settlement.
A good and licensed mortgage broker does the following:
- Understand the personal objectives and requirements of clients.
- Provide mortgage options that suit clients’ needs and goals.
- Apply for a home loan that best fits the situation of clients.
- Arrange the application forms and necessary paperwork.
- Manage the entire mortgage process through the settlement.
Online Mortgage Broker vs in Person
An online mortgage broker comes in handy when you cannot meet them in person. Their entire work is based online and they help you even if you are staying in a different city, state or out of the country altogether. It could be difficult for a broker-in-person.
There is no compulsion to work with a broker in person these days to get a home loan. The regulatory body accepts both these forms of brokers. Most mortgage brokers have an online presence nowadays, and they operate as online mortgage brokers.
Due to advancements in technology and lesser need to meet a broker in person, you can easily opt for an online mortgage broker, and you won’t find many differences between these two in terms of their operations.
Experienced brokers can provide customers with the following benefits.
- Convenience: The brokers will do all the legwork. They will apply for the mortgage, follow up with the bank and ensure that it gets through all the procedures, making it way more convenient for the customers. On top of that, you can also apply for a home loan without visiting a bank.
- Time saver: Online mortgage brokers will consider your finance and search for appropriate home loan options. They will apply to a bank best suited for you on your behalf, which will save you a lot of time. Brokers will also liaise with the bank about its progress and look after the entire process, so you can take a backseat and not worry about your loan anymore.
- Data safety: An online mortgage broker knows the entire home loan process and the importance of data in these areas. They take your data very seriously and ensure that it doesn’t get lost, stolen or breached.
- Home loan options: Online mortgage brokers have a variety of lenders and non-lenders on their panel. Thus, they can access numerous loan products for their clients depending on their financial circumstances.
Can I cut out the mortgage broker altogether?
Yes, you can directly approach a lender or their online lending platform to apply for a home loan. However, recent studies show the number of people approaching a bank directly for a home loan is falling substantially and using a mortgage broker to get a home loan is rising significantly over the years. Data shows around 70% of total new loans are now written by mortgage brokers.
Many people argue that avoiding the middle man like a broker will help save costs that would be going for them, yet, most online (and in person) mortgage brokers offer free of charge service as they usually get a commission for every loan generated from the banks. On the other side, it is very transparent that lenders are offering exactly the same products, fees and interest rates via their direct channels (branches or online) and third party channels (brokers).
In addition, by going to a traditional bank for your loan, you will be limiting yourself to only the products of that particular lender, and there may be a lack of suitable products for you. It is in contrast to going with a broker who has multiple lenders and non-lenders on their panel, and you can choose from a lot of products from a variety of lenders.
Furthermore, banks or financial institutions are not liable as per the Best Interests Duty to act in the interest of the customers; they act in their own banks’ interests!
FAQs
Are online mortgage brokers cheaper?
Essentially there is no difference between an online mortgage broker and an in person broker. While different brokers may charge different sorts of fees according to their own procedures, there is no straightforward answer to say which one is absolutely cheapest for clients in terms of fees. Generally speaking, brokers do not charge a fee or only charge a refundable commitment fee.
Are there any differences in interest rates between an online mortgage broker?
For the same lender, clients will get the same interest rates if all conditions are the same, no matter if the home loan is taken out via the lender directly, an in person mortgage broker or an online broker. However, brokers in general check with clients and clients’ banks on a much more regular interval on whether the interest rate is still competitive or not and may ask for discounts for clients.
Do online mortgage brokers have access to different lenders?
Yes, most of them deal with dozens of lenders rather than depending on two or three major banks, and they know the lending policies of them. This allows the broker to provide you with home loan options favourable to your situation.
How do I submit my documents to an online mortgage broker?
You may submit your documents online (via emails, DocuSign, or other platforms) and do not have to visit the broker’s office. Mortgage brokers will guide you in arranging the required documents which will allow you to apply for a home loan.
How can I find a good online mortgage broker?
There are many amazing online mortgage brokers available in the market. To find the right one, you just have to do some research, including checking their reviews on AirBroker. Here, we can help you in your search and save you the hassle of going through this arduous journey.
Do I need an Online Mortgage Broker?
Online doesn’t mean impersonal – they are mortgage brokers just working on the Internet. This helps them cut down their costs and reach a wider audience. The lack of physical branches doesn’t mean a cut of their services – in fact, the reality can be the opposite, since they save money from being in a physical location, they can now allocate more money and resources on customer services.
Online mortgage brokers act as a go-between you and your home loan in your journey. They are the home loan experts who will arrange an appropriate home loan deal from a wide array of options and guide you through the entire loan application process.
Before settling for a broker, you can ask them the following questions to get a picture of their skills and qualifications:
- Do you have a licence to operate as a broker?
- How many years have you been working in the industry?
- Which lenders do you work with?
- What are your fees and commissions?
- What type of loans are you offering?
- How will you help me look for the right home loan?
- Do you have other clients I can speak with?
Conclusion
In general, an online mortgage broker will assist you in obtaining a home loan that best suits your financial situation and requirements.
You might not meet the requirements of a bank or you might not have straightforward circumstances when applying for a loan. These issues might hinder you from getting approval for a mortgage. This is where mortgage brokers shine as they are loan experts in packaging a deal and presenting it to a lender.
Engaging a mortgage broker is very convenient for you if you are busy, out of state or even overseas. Usually, the online mortgage brokers provide their services all over the country and are considered customer service specialists providing specialised services to find a suitable home loan for the clients in accordance with their financial needs and goals.
Speak with one of the specialist mortgage brokers via AirBroker today and find out how we can help you in your quest to getting a home loan!
