Nov 30

A mortgage broker can save you time and money

Published in new car financemortgage brokerhome finance by Vicky Edema
In Australia many lenders rely on a mortgage broker or mortgage brokers to generate new business for them. Many Australian banks closed their branch offices during the late 1980s as they turned to technology and internet banking to grow their businesses. The branch network was considered expensive to run. The banks believe it is far better to pay a mortgage broker to generate home finance loans and pay him a commission, only on success. The mortgage broker may interview and submit a number of home finance applications all of which takes him considerable time but unless the home finance is approved and the borrower accepts and settles the home finance loan with the lender, the mortgage broker does not get paid or reimbursed any costs (such as petrol).

A mortgage broker needs to be dedicated and keep himself up to speed with many different home finance and commercial loan products. The lenders individually accredit mortgage brokers after they have completed home finance product training with them. A mortgage broker must attend regular training sessions not just on home finance product but also to ensure that he complies with all legislation. While at this stage there is no national legislation or regulation that a mortgage broker must comply with, different states in Australia do have licence requirements for a mortgage broker. There are alo9s more general laws that relate to the finance industry such as the Privacy Act and the Anti-Money Laundering Act a mortgage broker needs to put time in to study these to ensure he is conversant with his mortgage broker obligations under the legislation.

Today a mortgage broker may operate independently but more often than not he will join a network of mortgage brokers through wh5ta is called an aggregator. The aggregator provides training for the mortgage broker and also gives the mortgage broker access to very sophisticated software that allows the mortgage broker to compare different home finance products with different lenders while he is with a prospective client. The borrower may ask the mortgage broker to get him standard home finance at the cheapest interest rate and by checking the software the mortgage broker can quickly identify the best product for the borrower. If on the other hand the borrower is prepared to pay a slightly higher interest rate because he wants flexibility and a home finance package that includes a redraw, capitalising line of credit and other features, then again the mortgage broker can select from his extensive list of lender product and put some attractive options to the borrower.

The mortgage broker today has access to a wealth of information all of which can assist you in making a decision on the right home finance for you. Although banks rely on a mortgage broker to generate business they will often try to persuade borrowers through advertising to come direct to the bank for home finance. In my experience you will achieve a better h9ome finance package at lower interest and costs if you engage a good mortgage broker to assist you in your search for the home finance package.
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