Sep 25

Mortgage Brokers In Australia

Published in mortgage brokerhome loan financehome financecheap home loan by Vicky Edema
Mortgage Brokers In Australia most people go to mortgage brokers to get access to a greater range of mortgage options, for better service and for the mortgage broker's ability to negotiate with lenders. A mortgage broker offers loans from a panel of financial institutions, including banks and non-banks. In Australia there are literally hundreds of lenders with many options, that were traditionally available in the past and competition amongst lenders for customers is fierce with new home loan products available every day. Using a mortgage broker is now an essential part of sourcing the market for the right home loan. In plain terms, mortgage brokers evaluate your situation against the 20 or 30 lenders on their panel for the best deal.

Specialised mortgage lenders offer competitive products to first home buyers, self employed and business people, retirees, new Australians and immigrants, previous bankrupts and people with a bad or poor credit history. One of the great advantages of using a good mortgage broker is that they have access to many of these lenders and their products. The mortgage broker should be able to provide you with the cheapest home loan to the most competitive home loan in the current financial market. The mortgage broker should be able to provide you with at least three options of which lender suits you best. The mortgage broker should be able to explain in detail each home loan product he/she is offering and why they have chosen these home loan options for you. The options the mortgage broker provided is from the information that you have provided to them. This will show if the mortgage broker has done their homework correctly.

Mortgage Brokers usually run their own businesses. Lenders work with mortgage brokers because they effectively give the lender a bigger "shop front" without carrying a traditional employee or "bricks and mortar" overhead. Some lenders like Citibank, ING, Macquarie Bank and Heritage have few or no branches and partly rely on mortgage brokers to represent their products. Other lenders like CBA, Westpac, ANZ, NAB and St George have their own branch networks, but simply extend their access to Customers through the mortgage broker network. The lender pays the broker fees or commissions for your business. Just as if you were dealing with a bank manager or lender, these fees do not change the interest rate you pay on a home loan. To be sure you are being recommended to the right lender, just ask your mortgage broker to show you all the lenders on their panel, and what your loan options would be, against each lender's criteria.

What a Broker should do for you When you first meet with a broker, they should always start by asking you to explain your entire finance situation, including future plans. Little things can make a big difference to making sure you get the right home loan for your situation now and with flexibility for future changes. Have your key documents on hand to refer to when meeting with the broker so you can give the most accurate details to ensure you get the right home loan.

Your Mortgage Broker should:

  • Discuss and confirm loan scenarios and options in writing
  • Explain all documents of the loan application and assist in completing the loan application
  • Explain the loan process, from start of the application to closing
  • Explain all associated costs, fees and disbursements of the loan application
  • Communicate with you throughout the loan process
  • Follow up the lender for you from application through conditional and on to unconditional approval
  • Negotiate with their lender or lenders to achieve the best deal
How do I know a mortgage broker is any good?

Establish the right mortgage broker for you and check his/hers experience and qualifications. A good mortgage broker will be committed to the industry’s code of practice. It is vital to ensure you're getting the best loan for your needs. Below is a checklist that will help you know if your mortgage broker is a good person
  • For residential loans, all of the mortgage broker's services should be free – remember mortgage broker’s are paid commissions from the lenders
  • The right mortgage broker will take the time to really understand your entire finance situation, both now and into the future
  • Your mortgage broker should have a range of home loans from a wide variety of lenders, for example, banks and non-banks, conforming and non-conforming lenders
  • Check that your mortgage broker is not just an agent for one lender
  • Check the qualifications and experience of your mortgage broker, even ask for references from previous borrowers
  • Is the mortgage broker a member of MFAA - Mortgage & Finance Association of Australia / FBAA - Finance Brokers Association Australia
  • Ensure your mortgage broker discloses all commission and payments received by the lenders
  • Ask your mortgage broker to show you how the loans they offer compare to your own situation (on a computer). Good mortgage brokers should have the appropriate software and be able to clearly outline options requested by you
  • Ask your mortgage broker how they comply with the Privacy Act to ensure security of your personal and financial details
  • Your mortgage broker should have appropriate insurances (for example Public Indemnity Insurance Cover)
  • A good mortgage broker should be able to explain the most complex loans in simple plain English
In conclusion you would like to have trust in the Mortgage Broker that you will use. It is important that you take your “gut instinct” when you are choosing a Mortgage Broker. You want to make sure that you like the person and ensure that the Mortgage Broker will do the ring thing for you. It does not hurt to ask the Mortgage Broker for testimonials (what other customer have said about them)
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