Many people who are buying property – be it a new home or an investment property - immediately head to their bank for help with getting a mortgage, others may explore a number banks and lenders which is smart, but takes a lot of time and effort. Whilst these approaches are not necessarily bad methods, let’s look at the benefits of using a mortgage broker – you might save yourself a lot of time and money by using one!
If you are looking for a Mortgage Broker, here's a handy tool for finding a Mortgage Broker near you.
How Does a Mortgage Broker Differ to Going to the Bank?
A mortgage broker is essentially an independent agent who acts as your representative when shopping for a mortgage loan and can guide you through the process helping you get the right loan and features for your circumstances. Approximately 35 percent of home loans secured in Australia have been arranged through a mortgage broker.
Mortgage brokers usually are not linked to any particular bank or lending institution – but instead are out to find you the best possible deal on your mortgage. A Mortgage Broker can help you find the right loan with the right lender and because they are dealing with so many loan requests and banks and other lending institutions and generally know the options well, you can save time and money by leveraging their experience and knowledge.
Mortgage brokers receive a commission from the bank or lending institution for organising the home loan. Mortgage brokers do not generally charge their clients for their service; the chosen lenders instead foot the bill. What this means is that generally you are able to leverage the knowledge and contacts of the Mortgage Broker, consider more loans and lenders than you would personally want or be able to look into, all without paying a cent extra. In fact you will likely save money by doing so, as your mortgage broker may find you a better deal than you could find on your own!
So let’s take a look at some of the benefits of using a mortgage broker versus going to the bank.
Save Time Using a Mortgage Broker
Whatever your reason for requiring a mortgage – whether it’s an investment property or a home loan – mortgage brokers can help save you significant time and effort.
It can be time-consuming work trawling round numerous banks to find a mortgage with the best interest rate, features and and repayment options. By having a mortgage broker help you, you can leave all that hard work and effort to them, making your life that little bit easier!
A mortgage broker doesn’t simply find you a great mortgage or home loan; they can provide you with unbiased and independent advice to assist you along the way. We shall take a look at some of the advice mortgage brokers can offer you below.
Expert Advice
Not everyone is a seasoned home or investment property buyer, so any advice we can get is incredibly useful.
One of the great benefits of a mortgage broker is that they can help you to compare loans and evaluate your needs and financial capabilities. This will include helping to establish your borrowing power and calculations to determine the equity you have in any existing properties, and various financial scenarios. The mortgage broker can then help you to establish what mortgage repayments you can afford.
A mortgage broker can also assist you in calculating things such as stamp duty and lender’s mortgage insurance if appropriate – sometimes it’s good to have someone that doesn’t work for the bank or lending institution directly who is very knowledgeable and can explain things from your perspective and help navigate and streamline any tricky or time consuming parts of the process.
There are several types of mortgages and home loans that have different repayment methods and terms. Would a honeymoon period style mortgage work for you, for example? Would you like an interest only loan, what about an offset account? Let your mortgage broker talk you through your options and provide impartial advice. While we're on the subject of honeymoon periods etc. check out our Home Loan Comparison Calculator.
Save Money Using a Mortgage Broker
When shopping for a Mortgage, every dollar counts – and with so many different mortgage and home loan options available it is worth taking the time and effort to get the best value mortgage.
Yes, you can get the same deals by heading into your bank to get a mortgage – however chances are you may be missing out on a better deal elsewhere that you wouldn’t have found without your mortgage broker. Mortgage brokers have good connections with lenders meaning that they may be able to get you lower interest rates and repayments than if you were to go to the bank independently. Alternatively there may be a bank or lending institution that you wouldn’t have thought to look into who might have just the loan product for you – a mortgage broker will help you to discover these.
Useful Links
So if you’re interested in finding a mortgage broker to help you with your home loan, then search for one here. And while you’re at it, why not try some of our mortgage calculators: