There’s a bit of an odd assortment of views out there – but there are still a LOT of people that don’t actually understand what a mortgage broker does, or what they can do for you as a home or investment property owner.
Over 52% of mortgage loans funded in Australia are now written through mortgage brokers, so obviously plenty of people DO know what they bring to the table, but here’s a bit of a summary for you.
Finding the Right Loan
There’s more to getting a loan than just walking into the bank and getting whatever they dish up for you. Sure, that’s possible, but how do you manage to compare all the products on the market AND work out whose policy box you fit into?
The right loan is not always the cheapest loan – the right loan is the one that you qualify for, with the features you need, at the best price point.
Whether you are buying a home or investment property, renovating or refinancing, it really is a minefield of information, and you’ve got to be able to either navigate that yourself or talk to someone who has all that information at the fingertips.
I’d rather have a specialist working on that for me rather than trying to sort it out myself. If you need your car fixed – go to a mechanic. If you need your teeth fixed – go to a dentist.
(Please don’t get those two mixed up!)
It’s the same with mortgages.
Working for You – Paid by the Bank
I often get asked what the fees are for our broking services. Typically, we don’t charge any fees at all, and many brokers don’t. (There are some exceptions to that – and your broker MUST advise you up-front what they could be).
Whilst a mortgage broker is working for you – to get the best result for you – the banks pay them a commission for introducing the business to them. Most of the banks pay about the same amounts in commissions, so there is not much room for conflict of interest there.
Any broker worth talking to will not be focussed on the commission – they’ll be focussed on the best outcome for you.
So, you get a professional working for you, but someone else pays for it.
Pretty neat, huh?
Getting a Better Rate
If you thought that 3.99% was a pretty good rate, how would you feel if I told you that there were variable rates on the market up to 30 points below that?
Having a wide panel of lenders and the ability to be able to negotiate rates with them means that you can get access to some pretty tasty rates that they might not otherwise see.
Brokers can even do deals with the same bank at better rates than branch staff can sometimes. There is a major bank that I deal with a fair bit that allows us greater discounts than their own staff in negotiating loans for clients!!
It costs a lot to run a branch network – when dealing with a broker, the banks can pass some of those savings back to the customer.
Taking out the Hard Work
Most people when faced with a vast array of choices will reach information overload and end up taking the path of least resistance.
Mortgage brokers take out the hard work for you and assist you in optimising your loans whilst giving you access to that vast array of choice – and then whittling that down to the most logical options for you.
Structuring Finance to Benefit YOU
Banks always protect their own security position first – but having a broker help you with your debt structures means that more control rests with you, and you get more say in what happens with YOUR assets and YOUR equity.
If something goes wrong with your investment property, your home shouldn’t be at risk – but most banks will set you up so that they control everything. It’s one of my pet “things”, and I get on my soapbox about this all the time.
Control in your hands means more opportunity, and ultimately, more freedom in your financial life.