The Mortgage Broker Defined

Mortgage brokers are usually an unknown quantity and must earn your trust. But, they’re able to compare hundreds of loan products to find the right one for you. Plus, they’ll negotiate with a bank on your behalf, so they may be able to shave more off the interest rate your bank initially offered you.

Some of the most frequently asked broker questions according to mortgage experts are:

  • Do mortgage brokers work for banks? A broker doesn’t technically work for a bank. They are either employed by or own independent businesses. However, a lender, including banks, do pay a broker a commission when they sign you up for a home loan.
  • Do mortgage brokers charge a fee? In most cases, a mortgage broker’s service is free of charge. Although, some brokers will charge a fee for smaller loans under, say, $200,000. In addition, you may have to pay a fee if you repay your loan in under 2-years. Known as a ‘clawback fee’, a bank usually charges a broker this fee, which they may pass on to their customer.
  • What does a mortgage broker do for you? Brokers provide a personalised service from the start to the finish of your home loan. They help collect all your needed evidence and present the best application possible, they also take care of your application, as well as settlement. Want to know the best part? They negotiate the deal and liaise with credit officers, valuers, solicitors and even builders to simplify the buying process.
  • What do you need to give a mortgage broker? You’ll need to provide a broker with the same information that you give a bank – identification documents, financial history, employment details, an asset profile and a list of liabilities. They’ll also want to know how many dependents you have, how much you’re looking to borrow, and the size of your deposit. Plus, they’ll ask to check your credit history to see if you pay your bills on time.
  • Do mortgage brokers get better deals? A mortgage broker has a panel of lenders. These are typically banks, including the Big Four, as well as credit unions, building societies and other reputable financial institutions. Therefore, they can compare far more loan products than a bank can, and they can provide you with comparison information, so you make an informed decision.
  • How does a mortgage broker earn your trust? A good mortgage broker will make a time to meet you, and will then discuss your needs and financial history. At this time, you can ask them questions about their qualifications and level of experience. If you feel comfortable with them, then you may want to take the meeting further and begin discussing your home loan options.

However, regardless of whether you use a mortgage broker or bank, conducting independent research is ‘a must’. By spending the time to research mortgages, before signing up, you’ll have a better understanding of the market and you’ll instantly recognise a good deal when you find it.

Contact us today on (03) 9852 7000 to speak to our in-house loan broker.