Gone are the days when if you needed a financial product as expensive and as daunting as a mortgage, you would head over to your local bank branch for an intimidating chat with the manager. Over a decade ago, that may have been the norm but fast forward a few years and there has been a continuing loss of faith in the banks' abilities to provide sound recommendation, be available after hours, maintain indpendence and explain what is required to obtain a mortgage.. Today, most home loans in Melbourne are oganised by a mortgage broker. Approx 60% of home loans are organized by a mortgage broker.
Industry experts predict this will be the preferred route for many home loan borrowers in the next few years. Should you join them?
In this article, we discuss why a mortgage broker is key if you want to get the best deal out of your home loan.
What do Mortgage Brokers Do?
In a nutshell, a mortgage broker specialises in finding lenders who meet your specific needs for a mortgage. They provide you with expert advice and recommend the mortgages most suitable for your situation. They will also manage and oversee the entire mortgage application.
Why use a mortgage broker? The biggest advantage is that they have access to mortgage deals that aren't directly available to the public, with intimate knowledge of which lenders are most likely to accept your application. They also remove a lot of the hassle and paperwork associated with a mortgage. Not only will you have a wider choice of mortgages that match your circumstances, but you will also have an easier time finding and completing a mortgage.
It’s not just about the money – there’s speed and efficiency too
Mortgage brokers are not only influenced by the available lending products. Another issue they address is the speed at which a loan application is processed. This is especially important if you're buying a home. If the mortgage application takes too long to complete or the bank procrastinates, you could lose your dream home.
Mortgage brokers use their in-depth fact-finding process along with their extensive experience and knowledge to check lender suitability. They also provide clarity of the criteria of mortgage deals. If you're unsure of the lending criteria, it could mean that your application gets halfway through the process before you find out you were never suitable in the first place. With an experienced independent mortgage broker such as What If We Finance this is unlikely to happen.
How do Mortgage Brokers Choose the Best Deals?
There are several factors that mortgage brokers consider when selecting the best mortgage deal for you. It will mostly depend on your financial situation so they will ask you:
- The type of property you want to buy
- Property Value
- Income levels for all applicants
- Existing debt and expenditure levels
- If you've made an offer for the property
- How much you've saved up for a deposit
- Whether you will use government home loan schemes such as the First Home Loan Deposit
As a general piece of advice, it's a good idea to gather as much information as available before you speak to a mortgage broker.
They will then walk you through various product types, such as variable-rate mortgages versus fixed-rate ones. Your broker will evaluate all the different options from available lenders, taking into account fees, interest rates and loan-to-value rates and your goals and aspirates.
After they've gathered these pieces of information, they will use these to find you a mortgage deal that you can afford with the lowest possible interest rate. They will do everything to get you a sufficient loan without saddling you with unnecessary debt.
As mortgage brokers have access to exclusive lender deals, you have a significant advantage when trying to find the best mortgage.
How to Choose a Mortgage Broker
Finding the right mortgage broker requires a bit of homework. You can start by reading online reviews or asking your family and friends for referrals.
To ensure you're working with an experienced broker, check if the broker is licensed to give you credit (loan) advice. You can confirm their credentials using ASIC Connect's Professional Registers:
- Credit Licensee
- Credit Representative
If the broker isn't on any of these lists then ask them how they meet industry accreditation?
Get the Best Deal with What If We Finance
Enlisting the help of a Melbourne-based mortgage broker is an effective way to find the best deal that suits your needs and situation. The leading independent mortgage broker is What If We Finance.
We are an independent mortgage broker based in Melbourne (note the new lending laws allow us to deal with clients Australia wide and in some circumstances overseas) with extensive experience in all aspects of lending and finance. We hold our own Credit License with ASIC and full members of Mortgage Finance Association of Australia (MFAA). We pride ourselves on knowledge, experience and ability to find you an unbeatable deal quickly and efficiently.
Contact us today and we’ll make your life so much easier!