Should you work with a mortgage broker or independently look for a loan? That depends on several factors. You should know the pros and cons of mortgage brokers to decide for yourself.
Buying a new property can be exciting… until you start the process. It’s no secret that home and property purchases can be stressful if you’re in Australia, especially when looking for a home loan. All the legalities and technicalities tend to bog you down. But here's the excellent news-you can work with mortgage brokers in Australia, who can provide much-needed relief in this complex process.
What is a Mortgage Broker, and Should I Hire One?
Mortgage Brokers are licensed professionals who act as intermediaries between a borrower and a lender. Most people in Australia choose to work with them, with 69.3% of home buyers and investors choosing to work through a broker. These professionals are well-versed in the intricacies of the mortgage market, and their expertise can give you the confidence you need in your home loan journey.
Finding and hiring a mortgage broker is usually the better alternative. To decide whether to hire a mortgage broker, consider all the pros and cons.
Hire the best mortgage brokers today.
| Find Mortgage Brokers In: | |
|---|---|
| Altona Meadows | Altona |
| Williamstown | Newport |
| Altona North | Seabrook |
| Laverton | Spotswood |
| South Kingsville | Seaholme |
| Brooklyn | Williamstown North |
Pros and Cons of Working with a Mortgage Broker
Let’s look at these pros and cons of working with a mortgage broker:
Pros
Here are the pros of working with a mortgage broker:
They Keep Your Best Interest in Mind
Mortgage brokers keep your best interest in mind, mainly because they have to. They are obligated to act in their client’s best interest at all times. They’re not to favor the lenders or even their favor.
If you find a good mortgage broker, they’ll take care of you. Also, because they work on commission (which they don’t get until you get approved), they’ll work extra hard to bring you across the finish line.
Connect with More Lenders
If you don’t know many lending institutions, it will be to your advantage to work with a mortgage broker. They’re highly connected with several lenders, including banks, credit unions, and more.
Save Time And Energy
As mentioned above, the home loan process involves many technicalities and intricacies. A mortgage broker can take care of all the nitty-gritty details.
Some tasks they can take off your plate include paperwork, coordinating with all parties involved, and keeping your home loan process on track and moving. You can hop on a short call with your broker or exchange emails if there are any updates of dependencies you need to complete.
Get the Best Rates
Home loan interest rates are the deal maker (or breaker) for most buyers. It influences the loan amount. If you work with a mortgage broker, they can help you find the best interest rates on your loans.
Sometimes, they can also negotiate fees for you. That includes application fees, appraisal fees, and all other dues connected to the loan process.
Expert Advice
It’s okay to admit that you’re confused about terminology or process when applying for a loan, especially when you have a mortgage broker to explain the process and advise you on the next steps.
These professionals have worked with dozens, if not hundreds, of home buyers. They know what to do in most cases. They’ll guide you accordingly and help you choose the best route forward.
Risk-free Transaction
You don’t pay mortgage brokers upfront. They take a small percentage from your loan, so the banks pay them (although that commission works into your loan). So, they only get paid if you get your loan. Otherwise, you don’t have to pay them anything. That takes the risk off you and puts it on them.
Cons
Here are the cons of working with a mortgage broker:
Multiple Clients
Most mortgage brokers work with multiple clients like you. So, expect them to be unreachable at times. But, finding a broker who can manage their time well should solve this issue. Check customer reviews and look for some essential time management skills they have, like proactivity, responsiveness, and action orientation.
Misaligned Interests
Your relationship with your mortgage broker is a transactional one. So, some mortgage brokers (emphasis on SOME) will still try to find some way to make more commission if presented with the opportunity. There’s a chance, for example, that a mortgage might upsell you on a lender that gives them a larger commission, even if it’s not the best deal for you.
Limited Network
A mortgage broker will know a lot of lenders, but they won’t know everyone. Some professional brokers work with one or a few banks or lenders only. Before committing to work with a mortgage broker, ask them about their network of lenders first.
They Can’t Influence a Loan Approval
With all that a broker can do to help you apply for a loan, they do not influence the approval. They will fight for your case, but the lender will have the final say, not them.
When Should You Work With a Mortgage Broker?
So, when should you work with a mortgage broker? This option is a good idea when:
- You find one with good reviews
- You need connections to lenders
- You don’t have the time and energy to find and process loans yourself
- You don’t mind paying a commission
- You want a risk-free way of finding and getting an approved loan
If you need help finding a mortgage broker, we’re here to help. Easyhome has built a solid network of mortgage brokers and put them on one platform. Sign up today to connect with a reliable and well-connected mortgage broker.
