This last year has seen a lot of change as the country dealt with the global pandemic and businesses have adapted to working through Covid 19 restrictions. One sector which has seen unprecedented demand is the property market, with over $305 billion borrowed by Australians in 2021. More than half of home loans taken out are done through the services of a broker. For those who are first time buyers it can be reassuring to work with a mortgage broker in Melbourne. There are also several benefits of using a mortgage broker for those who have been through the process before. This article will explore some of the reasons why you should use a brokerage service.
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What is The Main Function Of A Mortgage Broker?
A mortgage broker is a licensed and trained financial advisor who uses their industry knowledge, network and resources to help a customer find the best possible home loan to suit their individual financial and personal needs. They do this by pulling together as much information as possible regarding the needs of their customer to advise on products and lenders that would match those needs and requirements. Mortgage brokers therefore act as the intermediary between the lenders of finance and the borrowers whether it is for a home loan or a company in the case of a business mortgage broker.
If its That Simple Why Use a Broker?
Some people may feel that rather than go through a broker they will research the products themselves to find one that is best for their financial situation. However, getting the best mortgage loan is a lot different from researching the best car or computer to buy. With home loan products there are terms and conditions to read and understand, interest rates, application criteria and interest fees on about over 3000 products on the market. Next, you need to understand the different types of interest rates from variable rates, fixed rates or interest only packages before narrowing down the right loan for you. And all of this takes time which, when you are trying to buy a new property, is in short supply when you are working and taking care of a family.
The Benefits of Using a Mortgage Broker
As well as saving you a lot of time and effort, a mortgage broker has the experience, knowledge and contacts to be able to immediately start to look at suitable home or business loan packages for you. They can introduce you to a range of new options that you may not have thought about rather than sticking with your current bank or financial instution. This allows you to make accurate comparisons and discuss in confidence your financial budget, so that you are enabled to make the right choice and not overstretch yourself.
Another benefit is that a mortgage broker will be able to spend time explaining the relevant financial parts to buying a property which is a big benefit if this is not an area in which you have expertise. Finally, as brokers gain their commission from lenders, the service they offer you may be free of charge which is a real bonus.
What Else Should You Ask Your Broker?
Ask a mortgage broker you are communicating with about the charges involved in their service. Bearing in mind the broker is referring your business to a lender, do they get paid a one-off commission or paid for the length of time you have the loan with the lender? Are their commission rates the same across all lenders or do they get paid more if signposting borrowers to one company for example.
Check they are licensed to practice and give you credit advice, look on their website for information about their services and the different types of finance available. Professional firms will ensure they have provided all the relevant information in a clear understandable format and be happy to have an initial conversation with you. Some will offer a free property profile report if you already own a property, so you can see what your property is worth and know how much you will need to raise for a new home loan.
Ask them about the number of different lenders that they have in their portfolio. What you want to know is that they have a range of choices so that you are given the best possible options. You should also check if there is one lender that they tend to recommend more than others and ask them why. This demonstrates they are acting in the interests of their clients to offer unbiased and relevant advice. The industry is regulated so that a broker must reduce the potential for any conflict of interest which could have an impact on the advice they offer you.
To ensure you make the best possible choice when it comes to property loans start by making a call to a loan expert today.