Mortgage Brokers are trained professionals who liaise between a lending institution and a potential borrower who wishes to borrow money to purchase a home or investment property, or perhaps consolidate existing debt or refinance and switch lenders to save money or shorten their mortgage term, or both.
The increased competition which has arisen as a result of the activities of Mortgage Brokers operating within the Mortgage industry has been noted as a key factor in the reduction of fees and interest rates for all Australians.
Mortgage Brokers will find various loans that are available and suitable for your specific requirements, chosen from the hundreds that are available, and then support and guide you through the maze, minefield and obstacle course that is the application and settlement process.
Mortgage Brokers will not normally charge the borrower anything for this valuable service, as Mortgage Brokers are usually instead paid a commission by the lender the month after the mortgage is settled.
THE MOST IMPORTANT THING TO KEEP FRONT OF MIND IS THAT MORTGAGE BROKERS ARE ON YOUR SIDE. IF HE OR SHE CANNOT ARRANGE A LOAN FOR YOU HE OR SHE DOES NOT GET PAID.
It is also important to remember that you cannot hide much from a lender. Previous credit enquiries will be obvious to the proposed lender when they check your credit file, as they all automatically do, and they will also then see what other existing credit liabilities you could have or may have recently applied for. If you can be honest with your chosen mortgage brokers and tell him or her about all existing liabilities and late payments if there are any, he or she can hopefully deal with it appropriately and stop it becoming an issue with a proposed lender. For example, if you have been late with payments of your credit card balance, your mortgage brokers may advise you to wait three months so that you can then show three months statements on credit cards, for example, with no evidence of late payments, assuming you are able to make prompt payments in the interim, or refinance them in a personal loan. Alternatively your broker can advise you that there is in fact at least one lender, who charges normal commercial rates, who will not be put off the settling of your existing credit card debt in a home refinance, if you can service the new loan (see page on servicing) and the credit card debt as if it still existed. These particular lenders won’t even want to see your credit card statements. There are of course other lenders who will lend money to virtually all applicants irrespective of financial track record, but these specialist lenders charge a “rate for risk” so the riskier you are deemed to be the more they will charge you. This option will not be suitable for all loan applicants as the interest rate that has to be used in the calculator to determine “serviceability” is higher than with other lenders, and can be considerably higher for those borrowers considered greater risks.
During the application process I and other fortunate Mortgage Brokers who are associated with the bigger aggregators (Mortgage Aggregators, including Dealer Groups and even Franchise Groups act as wholesalers between lenders and Mortgage Brokers) will have access to bespoke software that has been developed at the cost of millions of dollars, and this will let them and me find suitable loans for your particular requirements that you might take months to find, if ever.
Equally importantly Mortgage Brokers with access to this software, can easily and quickly lodge your loan application to any of their panel of lenders with just the click of a mouse. Trying to arrange a home loan without using mortgage brokers may mean that you never find the most suitable loan as the lenders change the features and rates of their loans so frequently it is virtually impossible to keep up without using such software. So by the time you have checked out half a dozen lenders, the first one you saw will almost certainly have made some changes or other after you met them compared to what was previously on offer. You may unknowingly settle for second or third best if you don’t use Mortgage Brokers.
Using bespoke software, Mortgage Brokers can shop around for you very quickly and easily. Such shopping around by yourself would be very time consuming, especially if it involves contacting a number of banks and lenders. Mortgage Brokers connected with the bigger aggregators can search the range of loans available from multiple lenders very quickly to find precisely the right home loan for your particular needs and circumstances.
Another good thing about using the service of Mortgage Brokers is that you need only one point of reference to discuss your needs. All the different banks and other lenders have their own quite different lending criteria and if you are not an expert you can quickly become a casualty in this financial minefield and end up with “footprints” on your credit file that will automatically stop other lenders from even giving you serious consideration. (See the page on Credit Scoring to learn more). Trying to arrange your own home loan can prove to be very costly if you are not an expert; very costly indeed if you then find you have to use a lender of last resort, one who charges a “rate for risk”.
We all know of someone who has tried to save money by taking on a task that was clearly beyond them and then had to pay someone else probably more than it would have cost in the first place to put right what they have done incorrectly. Given that the vast majority of Mortgage Brokers provide their service free of charge to the borrower, to try to arrange your own home loan can be folly of the highest order.
To summarise then, you should use qualified Mortgage Brokers because:
1) Mortgage Brokers will save you valuable time and money. Mobile mortgage brokers like me can visit you at home or at your place of work or at our office at a time convenient to you.
2) Mortgage Brokers will have a wide choice of lenders to choose from to find a loan just right for your particular requirements
3) Mortgage Brokers services are usually FREE
4) Mortgage Brokers can help you avoid the many pitfalls you may not even be aware of when applying for a loan. Getting an unnecessary decline is going to make the next application more of an uphill struggle.
5) Only deal with Mortgage Brokers who are accredited to the Mortgage and Finance Association of Australia (MFAA).
When should I see a Mortgage Broker? The sooner the better, really. It is wise if you are not very organised to plan some 6 months ahead so as to avoid making mistakes that will thwart your plans. As soon as you think you would like to either invest in your first home, or you would like to move house, or refinance to consolidate existing debt, you should make arrangements to see a mortgage broker. Given all the requirements of the banks and other lenders it is sensible to plan and prepare up to 6 months beforehand as that is how far back you are going to have to provide mortgage statements, if you already have a mortgage, and other documents. If you have an existing mortgage any new lender is going to want to see your last 6 months’ statements showing an unblemished payment record. If you are struggling to keep to your existing commitments, a mortgage broker may be able to consolidate some of your existing debt, perhaps credit cards, by rolling them into one more manageable personal loan. Sometimes it is necessary to embark on getting a new home loan in more than one step unfortunately but so long as you get where you wanted to be ultimately, that’s all that matters.
If you are unable to pay off your credit or store cards in full each month, then the writing is on the wall that eventually this could become problematical. The average credit card debt takes around 8 years to pay off. Imagine the amount of interest you will have paid over that period. Do not leave it too late to consolidate credit card debt. Taking on more credit cards because you cannot pay off the first one is most definitely NOT the answer. If you have a mortgage and sufficient equity, refinance your mortgage and get rid of the credit card(s). Debit cards are preferable by far.
Each bank asks to see different supporting documentation when applying for a mortgage but if you look under the page entitled “Supporting Documents” and start to file ALL of the documents on that page, you should be able to satisfy the supporting documentation requirements of 95% of lenders. If you are refinancing it is a very good idea to check your credit record with Veda yourself to make sure nothing is on there by mistake or whether something is on there that may have slipped your mind. Start to collate your documents well beforehand so it becomes a habit and you will have a much less stressful experience when it comes to sorting out a home loan – and so will your mortgage broker! Please see below a list of the Suburbs and Postcodes I am happy to travel to in order to discuss with you your home loan requirements –
If you need help getting a home loan or assistance with any of the issues covered on this site, please call me, Vincent Woodall directly on 0451 596 575 or you can send me an email to firstname.lastname@example.org or alternatively please complete and submit the enquiry form below.
Please remember: I am a mortgage broker in Adelaide and I am –
- Fully accredited by the Mortgage & Finance Association of Australia
- Fully qualified with the Diploma of Finance and Mortgage Broking Management
- Plus I have satisfied stringent financial and criminal record background checks.
Find a home loan with someone you can trust and who will ensure you’re getting the right home loan for you. Vincent Woodall. 0451 596 575 or alternatively send me an email to email@example.com .