If you are in the market for a home loan, you may be considering using a mortgage broker. In Australia, mortgage brokers write more than 50% of all home loans. So why are more Australians choosing to use a mortgage broker? In the article below we explore the pros and cons of using a mortgage broker for your next home loan.
What is a mortgage broker?
A mortgage broker is a type of financial adviser who specialises in helping you secure the right home loan for you. They will negotiate with banks, credit unions and other credit providers on your behalf, and may be able to arrange special packages or deals.
A mortgage broker can also help you manage the process from application to settlement, providing advice along the way.
Pros of using a mortgage broker
Save Time – A mortgage broker will do the leg work for you. They already have established professional networks to draw on, industry experience and access to software which gives them detailed information on a wide variety of home loans.
Save Money – The services of a mortgage broker are usually at no cost to you, as the lender pays a commission to the broker once the loan has settled. This means that you have access to a service to get the best loan for you without costing any extra.
Experts – Just like a doctor or mechanic, mortgage brokers are experts in their field. If you have a poor understanding of finance and the mortgage industry, then it just makes sense to leave this in the hands of an expert.
Find the right product for you – In Australia there are 150 banks and credit unions, generating more than 3000 home-lending products. Add to that interest rates, establishment fees, terms and conditions, decisions regarding fixed or variable rate interest – the choices can be overwhelming. A mortgage broker will do the research for you, based on your own personal circumstances, and find the right product for you.
Cons of using a mortgage broker
A mortgage broker may be limited to the products they can show you as they act on behalf of other lenders, which means you may not see all the products that suit your requirements. For example, if a credit provider doesn’t pay commissions, the broker might not include their loans on the list of products they recommend.
Fees and commissions
Mortgage brokers are compelled by law to reveal the details of their commissions with the introduction of a disclosure document under the Mortgage and Finance Association of Australia’s National Consumer Credit Protection Act. Make sure you ask your mortgage broker who pays their commissions and if they will charge you a fee.
It also important to check the mortgage brokers credentials – mortgage brokers must be licensed to operate legally in Australia. You can Search ASIC Connects Professional Registers to check your credit provider has been licensed or you can phone ASIC’s Infoline on 1300 300 630.
If you are looking for a home loan, a mortgage broker can take the hard work and stress out of the process. At Hunter Lending Solutions we work for you, negotiating on your behalf and following through the application until settlement.
Contact us on today for a confidential chat on how we can assist you.