Are you trying to secure a property loan? You’ve likely been told to find a mortgage broker to get the best deal from lenders. That’s why we’ve put together an entire buyer’s guide for people who want to find the best mortgage brokers in Victoria.
Check it out and understand what mortgage brokers do and what you should expect when working with one. Let’s dive in.
What Does a Mortgage Broker Do?
A mortgage broker is a licensed professional who acts as an intermediary between a borrower and a lender. In other words, they “broker” deals between you (the home or property buyer) and several lending bodies and help you find the loan that best fits your context and needs.
A mortgage broker has a few key functions that can significantly alleviate the stress and tediousness of the loan process for you:
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Connect you with lenders — Mortgage brokers, with their extensive network and expertise, are well-positioned to connect you with the best lending institutions, including banks, credit unions, and more. You can confidently rely on these professionals or firms to open doors.
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Analyse your financial situation — Sometimes, you might not know your loan capability. A good mortgage broker will let you know if you’re ready to take on a loan and how much you can loan. This insight helps you better understand what type of property you can sustainably get.
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Prepare the paperwork— If you don’t love paperwork (ugh), a mortgage broker can help facilitate the process. You still have to gather the documents, but your broker can organize them all for you.
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Find the best loan amount and type — For some people, finding a loan isn’t the problem. It’s choosing the best one.
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Explain loan terms to you — Banks and lenders often inundate you with complex information and terminologies. Unfortunately, not all of them will take the time to educate you on these things. However, with their dedication to your understanding, a mortgage broker will ensure you feel empowered and informed about every aspect of your loan.
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Handle most of the loan processing procedure — Mostly, a mortgage broker will hold you by hand from start to finish. They kind of have to if they want to get your business and earn their commission. More on that in a bit.
Do I Need a Mortgage Broker to Get a Loan?
If you’re wondering if you can get a loan from a bank on your property purchase without a broker, yes, you can. You can shop around for your home loan. However, the loan process can be complex, and the many options available can sometimes leave you in a state of analysis paralysis. Hiring a mortgage broker is the best and most economical decision.
How Do Mortgage Brokers Get Paid?
Once your loan is completed, mortgage brokers charge a commission. The borrower usually pays that commission, but some buyers might have to cover that cost. The commission is 1 to 2% of the total loan amount.
Work with the best mortgage brokers in your area. Check out these Victoria mortgage broker directories:
| Find Mortgage Brokers In: | |
|---|---|
| Altona Meadows | Altona |
| Williamstown | Newport |
| Altona North | Seabrook |
| Laverton | Spotswood |
| South Kingsville | Seaholme |
| Brooklyn | Williamstown North |
5 Steps When Working with a Mortgage Broker
When you work with a mortgage broker, this is what the experience might look like:
1) Start the Pre-Approval Process
Before you start looking for properties, contacting a mortgage broker and securing a pre-approval on your loan is best. Your mortgage broker will guide you through this process. At this phase, they will assess your borrowing capacity and determine the maximum loan amount you qualify for.
Pre-approvals will give you a benchmark budget for your property search and strengthen your case when you make an offer on a home. Sellers often like that their prospective buyers are already pre-approved before even offering.
2) Explore Your Loan Options
A key benefit of working with a mortgage broker is the access to diverse loan options. Potential homebuyers often need help navigating the variety of loan products available from lenders. A dedicated mortgage broker will simplify this process by showcasing the most suitable options. They’ll also consider your financial profile and preferences.
3) Secure a Competitive Loan
Interest rates are the crux of the entire home loan equation. They will determine the total cost of home ownership – and they have significantly altered the homeownership landscape over the past year! Check out these rates published last March 2024 (could go up and down with time):
- Current official cash rate: 4.35%
- Average variable rate home loan: 6.82% p.a.
- Average Big 4 Bank variable rate: 7.48% p.a.
Mortgage brokers are highly positioned to secure the most competitive interest rates. By leveraging their relationships with lenders, they can often secure better rates and terms than you might by going directly to a lender.
4) Begin the Documentation
The paperwork required for getting your home loan can be overwhelming, especially for first-time buyers. Mortgage brokers will assist you in preparing and organising all necessary documentation. This is best to avoid omissions and errors.
5) Finish Up the Settlement Process
As the property purchasing process draws close, a mortgage broker will participate in the settlement process to try to smoothen out negotiations. You’ll want to work with a broker to collaborate with all parties involved, including real estate agents, lenders, and conveyancers. That will somewhat guarantee a successful and timely settlement.
What Happens After Settlement?
The role of a mortgage broker doesn't necessarily end after the property settlement. Your broker should offer ongoing support. Post-settlement, they should provide advice on refinancing opportunities and how to manage interest rate changes.
Final Thoughts
There you have it— all the most critical questions about mortgage brokers answered. Hopefully, this guide has been helpful. For more questions, check out our other blogs on mortgage brokers and the process.
If you’re looking for a mortgage broker to work with, you should check out Easyhome’s directory. We’ve compiled an extensive list of firms and professionals with a proven track record of great service and stellar borrower support.
Here’s to you and your upcoming property closing! All the best.
