Why should I use a mortgage broker?
Quite simply, Mortgage Brokers can save you time and money and they can also reduce stress.
As the home loan market becomes increasingly complex, more people are turning to mortgage brokers.
Here are some of the benefits of using a mortgage broker:
There are many benefits to using a mortgage broker instead of taking a DIY approach to securing your home loan. While mortgage brokers can help to save you time and money, they can also reduce the stress of obtaining a loan.
As the home loan market becomes increasingly complex, more people are turning to mortgage brokers for guidance.
Here are some of the benefits you may discover when using a mortgage broker.
Mortgage brokers can save time
The choices now available in the mortgage market can seem limitless and completely overwhelming. You can choose to research the subject, the lenders, and their products yourself, or work with a mortgage broker who already has that knowledge. This will save you time and effort.
As mortgage brokers work closely with lenders every day, they understand how specific lenders work and which ones are ideal for your financial situation. Brokers do all the research on rates and fees; they negotiate for you and keep the mortgage process on track. A good mortgage broker will guide you through the process and keep you up to date with what stage your application is at.
They also look at your financial situation under a microscope and help you to manage your expectations. All too often, buyers focus on saving enough for the deposit but forget about lenders’ mortgage insurance, stamp duty and conveyancing fees, so it’s common for them to fall short financially. A mortgage broker will support you during this process, ensuring you’re aware of any fees you may incur.
Mortgage brokers give you choice
All mortgage brokers have a panel of lenders from which they recommend a loan. They must become accredited with the lender to offer their product and are required to keep up to date with their latest offers. This means they can provide you with more variety.
Brokers often have access to special deals from lenders that aren’t available to the public. Inovayt Broker and Business Developer, Marty Vidakovic, says, “A mortgage broker represents the client’s best interests. Bankers represent the bank’s best interest. Why choose the best product and rate one lender has to offer, when you can choose the most competitive product and rate from 40 plus lenders?” Because of this, you can be assured they’ll find you a suitable loan.
If you have extenuating circumstances that make the home loan process difficult, a mortgage broker can help you by negotiating with lenders. For example, perhaps you have credit issues or need a larger loan than your bank will approve. In that case, a broker can get you approved and save you thousands of dollars in interest by negotiating favourable terms with lenders.
Mortgage brokers can help find the right loan
The best deal is not necessarily the cheapest rate. A good mortgage broker will examine your circumstances, goals, and future plans to recommend the right loan for you. Having an appropriate loan that works for you can help you build wealth.
A mortgage broker must remain a neutral third party in the home loan process, meaning they’re on your side and not trying to sell you on a specific product.
As of January 1, 2021, the National Consumer Credit Protection Act states the following:
“Mortgage brokers must act in the best interests of consumers when providing credit assistance in relation to credit contracts.
Where there is a conflict of interest, mortgage brokers must give priority to consumers in providing credit assistance in relation to credit contracts.”
With a mortgage broker acting within the consumer’s best interest, you know they’ll be doing everything possible to find you a suitable loan.
Most mortgage brokers don’t charge you
Many mortgage brokers don’t charge a fee for their service as the lenders pay them a commission for the loans they write. Most lenders offer the same rate via the mortgage broker as they would directly, and a broker could save you money in other ways, including getting you a better deal on a particular loan.
Marty says, “We are ultimately paid on the achievement of a positive settled client deal. The lenders pay a broker a commission as an introducer fee, which is consistent amongst the lenders. So, instead of lenders paying their own employee and marketing to secure a deal, they pay the broker who holds the relationship to introduce the business to them.”
While most brokers don’t charge you a fee for their service, the lender you eventually choose may have its own fees. This is something you can discuss with your broker.
Mortgage brokers can help you avoid pitfalls
Many products seem to offer a great deal, but they could have penalties, fees, and charges you may not be aware of, or they may not provide the flexibility you require in the future. A mortgage broker can help you avoid taking out a loan you might later regret.
They also assist you with your pre-qualification for loans. Each time you apply for a home loan and are unsuccessful, a hard inquiry is left on your credit score. When a lender or company requests to review your credit report as part of the loan application process, that request is recorded on your credit report as a hard inquiry, and it usually will impact your credit score.
By using a mortgage broker, they have access to software that provides information across a broad range of lenders. It allows them to clearly see your borrowing power and which lenders are more likely to lend to you. This insight will enable you to only apply to lenders who have a high chance of approving you.
Your relationship with a mortgage broker continues after the sale
A relationship with your mortgage broker doesn’t end once you’ve signed your loan application documents. They remain a source of information and someone you can turn to should you have any more questions. A good mortgage broker will also follow up with you after a few years if a better loan becomes available that you could take advantage of.
“You work with mortgage brokers for the long term to strive towards your financial goals. In the banking system, lending officers change frequently which makes it difficult to sustain a longer-term relationship,” Marty says.
Regardless of whether it’s your first property, your next property, or an investment property, the benefits of using a mortgage broker last well beyond the final sale of a property. They’re there to guide you through the loan application process while keeping an eye out in the future for any changes that might benefit your current loan. If you’re considering applying for a home loan, reach out to an Inovayt mortgage broker today.