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Do I need a mortgage broker?

September 9, 2019 10:00 am by Upside

Whether you’re buying a property for the first time or the tenth time, enlisting the help of a professional mortgage broker can be one of the smartest ways to get a home loan that’s best-suited to your circumstances.

Here’s a bit of background on exactly what mortgage brokers do and how to find the right one for you.

What does a mortgage broker do?

Simply put, a mortgage broker acts as a go-between who deals with banks or other lenders to arrange a home loan for you. Going through a mortgage broker can help streamline the process of finding and applying for a home loan, especially given the myriad of home loan products out there.

Typically, lenders will pay the broker a fee or commission for selling their products, so you don't pay the broker anything.

Some brokers get paid a standard fee regardless of what loan they recommend. Other brokers get a higher fee for offering certain loans. Keep in mind that this could influence the loans a broker recommends to you.

Occasionally, a mortgage broker will charge you a fee directly, instead of, or as well as, the lender's commission. It’s a good idea to compare brokers online to find out if you’re getting a fair deal from your mortgage broker.

As standard practice, a mortgage broker should work with you to:

  • Get to know your needs and goals
  • Help you figure out what you can afford to borrow
  • Find home loan options that are suitable for your situation
  • Explain how each loan works and what it costs – e.g. interest rates, features and fees
  • Apply for the loan on your behalf and manage the process right through to settlement

How to find the best mortgage broker

Like any other service, it pays to do your homework before choosing a mortgage broker. Not all brokers are created equal, so it’s a good idea to look for with a solid reputation for providing helpful advice and support in securing a home loan.

With that in mind, you should:

  • Read mortgage broker reviews – Check that previous customers have had good things to say about a potential broker, especially customers in a similar situation as yours if possible.
  • Check the broker is licensed – Search the following on ASIC Connect's Professional Registers:
    • Credit Registered Person
    • Credit Representative
    • Credit Licensee
  • Ask about their lending panel – A good broker will have a wide range of lenders on their panel and as such, have access to a wide variety of home loan options.
  • Check their ownership structure – In many cases, brokers are owned or part-owned by a bank, and as such, may be biased in recommending home loan products.
  • Make sure they’re clear and transparent – A reliable broker should present you with a number of options and clearly explain their reasons for recommending specific loans. Be wary of brokers that try to sell you risky loans, such as interest-only loans, that don’t reasonably fit your budget.

RELATED: The ultimate home-buying checklist

Upside

Upside is an Australian-owned, full-service real estate agency with one low fee and no commission. Our standard is other agents’ ‘extras’, delivering vendors a complete agent managed service including a full appraisal, open home management, copywriting, photography, signage and advertising. It's the way real estate should be.

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