Mortgage Brokers (also often referred to as Finance Brokers, Mortgage Planners or Credit Advisers) act as an intermediary between lenders and borrowers to negotiate loan facilities.
Over the last 10 – 15 years the usage of Mortgage Brokers in Australia has increased consistently and it is now estimated that approximately 1 in every 2 new home loans in Australia is sourced through a Mortgage Broker.
So why do so many borrowers utilise a Broker rather than going to their local Bank? Some of the benefits and reasons include:
• Access to more loan options – Mortgage Brokers have access to a broad panel of lenders and therefore a wide range of loan products and lending policies to meet a wide variety of borrowers needs. By comparison, if a borrower goes direct to a Bank they can only select from the narrow range of products (and interest rates) offered by that one lender.
• Access to Lenders not in your local market – Brokers can provide options to lenders that do not have a local branch presence that may suit a borrower. This broadens options beyond the “big four” banks and local lenders. The most suitable lender for you may only sell loans through Brokers in your local area.
• Compare loans and manage the process for you – Researching and sourcing a loan can be very time consuming. Mortgage Brokers provide a ‘ one stop’ shop to compare the offerings of a wide range of lenders and best of all they liaise with the lenders on your behalf, often saving borrowers much time and frustration.
• Independent Advice – Comparing loan offers and understanding the differing terms and conditions can be confusing for borrowers. Brokers can provide assistance by guiding borrowers through the maze of options and providing credit advice based on each borrowers individual needs and goals.
• Lending Specialists – Mortgage Brokers specialise in lending and have experience in the whole lending process and a broad range of products from multiple lenders. They understand all aspects of lending from first home buyers through to complex investment loans. Bank staff by comparison can be distracted by having to focus on many different aspects of banking and only have in depth knowledge of the lending products they sell.
• Working for you – Mortgage Brokers work for you, not the Bank, to obtain the most suitable loan for your individual needs.
• Relationship focused – A Brokers biggest source of business is referrals and advocacy from existing customers and contacts. They don’t have huge marketing budgets so they rely on good service and adding value to their customers to gain referrals and build their business. Because most Broking businesses are small local businesses you are often dealing with the owner of the Broking business.
• Flexibility – Most Brokers work a wide range of hours and don’t limit themselves to business hours. Chances are if you need your Mortgage Broker over the weekend they will be contactable.
If you want to find out who your local Mortgage Brokers are just ask your friends and work colleagues if they know of anyone, chances are half of them already utilise the services of a Mortgage Broker!