What Is A Mortgage Broker? Do I Need One?
What Is a Mortgage broker or a Finance Broker, and Should You Use One?
A mortgage broker can make your mortgage search much easier, but is it really necessary?
In Australia, if you’re thinking of buying a home in the near future, chances are pretty good that you’ll need to obtain a mortgage. When doing so, you have two basic options — deal with a bank and other lenders directly, or the other best option is to hire a mortgage broker to do the hard work for you at no cost absolutely. The market is filled with Mortgage brokers but the differentiator in a mortgage broker is the knowledge, experience and also someone who fights your battle with the banks to tailor the best home loan solution that fits your life style and fulfills your financial goals. Here’s what you need to know about mortgage brokers to help you decide whether you should use one or not.
The basics – What is a mortgage broker?
Simply put, a mortgage or a finance broker is a middleman between a homebuyer and mortgage lenders / Banks. The mortgage broker will assess the borrower’s finances, find appropriate mortgage products, apply for pre-approvals, gather necessary documentation, complete applications, and advise clients on the right mortgage products for them. This a summary of the activities performed.
Mortgage brokers make their money by charging origination and or broker fees, which are paid when the loan is originated (at closing) by the bank or lender of your choice, and typically it is less than 1% of your loan. Currently in Australia 1 in 2 home loans are being completed by a Mortgage broker, which is 60% of all mortgages originated and completed with the assistance of mortgage a broker.
Some people automatically have reservations when it comes to hiring an additional professional to help with their home search – some people prefer to do things themselves. However, it may result in long delays and multiple revisions as mistakes are common especially when a home loan applicant is new to the process of applying for a mortgage and also does not have the industry knowledge and insight and this can be costly and missed opportunities of a dream home.