How can a Mortgage Broker help?

How a mortgage broker can help

It is estimated that in excess of 50% of all first time homebuyer mortgages are organized by mortgage brokers, with Aussie Home Loans and Mortgage Choice being the largest brokers. The attraction of using a mortgage broker to help organize your home loan is that their service is designed to manage take the stress out of making the purchase right through to settlement, whilst providing expert advice in the selection of a mortgage to best suit your circumstances.

So why should you use a mortgage broker?

  • Comparing mortgage options - Mortgage Brokers will compare the mortgages offered by a wide selection of lenders with whom they are accredited, referred to as their ‘panel of lenders’. These lenders may include Australia’s largest banks, credit unions and plus specialist ‘non-bank’ lenders. To compare this number of mortgage options yourself would take significant time and also require some level of knowledge on how to best compare this type of product.
  • Matching your needs to the Mortgage products - Following an appraisal of your current financial situation mortgage brokers will use a mix of tools and expertise to identify the most appropriate and competitive mortgages which match your needs and circumstances.
  • Negotiating a preferential deal - Mortgage Brokers are a significant sales channel for each of the lenders and as such the lenders incentivize the mortgage brokers to choose their products over competitors, these incentives are frequently offered in the form of discounted mortgage rates, only available through brokers.
  • No upfront costs - Generally the mortgage broker will not make any charge for the services as they are remunerated by the lenders, who pay mortgage brokers commission on each home loan they settle with them.
  • Home Loan Expertise - The home loan market is complicated with thousands of mortgages to choose from and many features to consider, from redraws to off set accounts. Mortgage Brokers can help you understand the mortgage options and customize your mortgage with the options that will be useful over the term of the loan.
  • Lender Mortgage Insurance - Brokers will explain how LMI works and whether it is applicable to your circumstances, which will be dependent on how large your deposit is.
  • First Home Owners Grant - Mortgage Brokers will confirm if you are eligible for the FHOG and will generally assist in making the application for the Grant at the appropriate time in the process.
  • Option to consolidate your debts - The majority of home loans facilitate consolidation of credit card and loan debts, your mortgage broker will be able to outline the options and how this may save you on interest charges.


Choosing a Mortgage Broker

Qualified Mortgage Brokers - not all brokers have the same level of qualifications or experience. To ensure you are working with an expert look for a broker who is accredited with the Mortgage & Finance Association of Australia (MFAA) which sets professional standards andits members are required to adhere to a range of Code Practices, laws and regulations.


What to expect from your first meeting with a mortgage broker

The first meeting with your preferred mortgage broker should cover the following:

  • Your situation - The broker should be looking to understand what you are looking for in a home loan and gain an insight on your current situation.
  • Financials - You should leave the meeting with an estimate of how much you may be able to borrow and what your repayments will be based on your current financial situation in terms of income and expenditure.
  • Home Loan Features - Understand the features that are available with mortgages and which of these maybe appropriate to you.
  • Costs - An understanding of the up front cost and any ongoing fees associated with taking out a home loan.
  • Overview of the home buying process - Explain the home buying process end-to-end including making an offer, attaining legal advice, exchanging contracts and settlement, and how they will help with this process.