A mortgage broker can be a great help when looking for a home loan. They help with the paperwork, compare home loans, and help you get the best home loan deal. Need to know more about mortgage brokers? Read on!
What is a mortgage broker?
A mortgage broker is a person, or company, who can help find you a mortgage. A mortgage broker acts independently of banks or other financial institutions. They liaise between people seeking mortgages (you) and potential lenders (banks, finance companies etc) with the aim of obtaining mortgage finance (a home loan) that is acceptable to you. Sounds good? To get in touch with a mortgage broker head this way!
In the role of mortgage broker, this person will find you an acceptable home loan and make an application for that home loan on your behalf. A mortgage broker will collect information off you to make a home loan application, work out what home loan structure suits you, perform home loan comparisons taking into account your personal situation, and (hopefully) get you a great home loan offer! Particularly if it is your first home loan, you are just too busy to shop around for a home loan, or you are unfamiliar with the home loan application process, get in touch with a mortgage broker - they can be very useful.
Mortgage brokers organise mortgages, home loans and finance for people for a living, therefore, they know all the ins and outs of borrowing money; they can be a great asset in the house buying process! Interested in what a mortgage broker can offer you? Organise your free chat with a mortgage broker now!
Should I use a mortgage broker? And what do they do?
Mortgage brokers are becoming a common factor in the house buying and selling process. Should you use one? Firstly - you do not need to use a mortgage broker! The process of applying for and getting a home loan can be done by you.
So what can a mortgage broker do for me? A good mortgage broker will use their experience to review your financial situation and get the best home loan deal for you. They will start by collecting details of your financial situation and copies of documents needed for applications.
Once they have all this information the mortgage broker will be able to determine who is likely to give you a home loan. They will usually narrow this down, performing a home loan comparison that takes into account all the information they know about you and then present you with a couple of good home loan options. You can then do your own home loan comparison using the mortgage brokers suggestions and make a decision.
The mortgage broker will also look at home loan interest rates. The current interest rates on offer at banks will be a big factor, but not the only factor, in the mortgage broker's analysis of the best home loan offer for you. Often a mortgage broker can negotiate a better home loan interest rate then that advertised by a bank. The mortgage broker will work with you to determine a home loan structure i.e. how much to fix (at what home loan interest rate), and how much to float.
This is great! Especially if this is your first home loan or you are unfamiliar with borrowing, interest rates, mortgages or home loans. The process of getting a home loan can seem complicated, and a bit scary! And a good mortgage broker can definitely help you smooth out the bumps and explain the confusing bits.
A mortgage broker can potentially save you tens of thousands of dollars during the life of your loan by negotiating on home loan interest rates, structuring your loans, negotiating bank charges, and recommending products to best fit the way you manage your money.
Not every bank will necessarily say yes to your finance application, but it is the job of the mortgage broker to know which ones will and what information is required for the loan application. So if you are not a 'perfect' borrower, have a chat with a mortgage broker - they will know who the best lenders are to approach to get the mortgage you are after.
Particularly if you are having trouble getting finance, if you are not feeling confident about negotiating with your bank, if you feel that you could do better but don't know the right questions to ask, if this is your first home loan, or you just don't have the time to shop around, a mortgage broker can be a good choice. How can a mortgage broker help with your situation - Find out by organising a free chat.
However, most mortgage brokers only get paid if you take out a mortgage through them, this makes them 'invested' in your house purchase. You need to remember this and be aware that you can only 100% trust the advice of people that have nothing to gain from your house purchase going through.
Recommendations of property valuers and building inspectors should not come from your mortgage broker. Also, make sure you are comfortable with the amount of lending on offer. Some mortgage brokers are almost too good at their jobs and can get you approvals for amounts of money that make your head spin!
Make sure you know your limits and stay in your finance comfort zone! You do not have to take up an offer of a home loan that your mortgage broker has arranged for you! If a finance offer is unacceptable, you can get your mortgage broker to try again.
Most importantly! If you are not comfortable with your mortgage broker do not hesitate in changing mortgage broker or working with the lending institutes directly.
Finally, not all banks will deal with mortgage brokers, so if you want a BNZ home loan or a Kiwibank home loan, for example, you will mostly likely only be able to approach these banks directly as they do not deal with very many mortgage brokers.
Can a mortgage broker help you? The only way you can find out is to talk to one. You can arrange a chat with a mortgage broker here. Ask them all the questions you want, and discuss your situation. This is a great way to find out if a mortgage broking service can help you.
Who pays mortgage brokers?
Mortgage brokers do not usually charge you for their services, instead they earn a commission from the lenders. If the bank is paying the mortgage broker then surely you can get a better by dealing directly with a bank? Most mortgage brokers will tell you that they will be able to negotiate an equal or better deal than you would get going direct, even back to your current bank.
Some mortgage brokers do charge a fee therefore it is important that this is the first thing you ask about before you start working with them.
Choosing a mortgage broker
As there is no requirement for a mortgage broker to tell you about their background, experience, and qualifications it is up to you to find out. Preferably you want a someone with a relevant banking or finance background prior to becoming a mortgage broker, at least a few years experience in the job and relevant qualifications (evidence of up to date and ongoing training is a plus).
Ask them how many lenders they deal with, just a few is not good enough - in excess of 20 is great! Always check if there is a fee! You should be able to find a mortgage broker who will do the work at no charge to you.
Some mortgage brokers are members of the Professional Advisors Association (PAA). This body has a code of ethics and rules that members must adhere to and all members must have indemnity insurance. The PAA also encourages their members to keep up to date with training available. To chat with PAA mortgage broker head this way, otherwise you can find a list of PAA brokers on the PAA website.
Finally, go with your instincts. There are plenty of mortgage brokers out there, and because they are dealing with your personal information, and personal situation, you need to feel comfortable about that. You need to be confident that your mortgage broker is intent on getting the right mortgage for you. If a mortgage broker doesn't feel right, find another.