Why should you work with a mortgage broker?

Over recent years more and more borrowers have opted to work with a mortgage broker when applying for a home loan. In fact, in Australia, recent data shows that over half of all home loan applications are written by a broker. 

So the key question anyone looking to purchase a property should be asking is: Why? 

Why are so many borrowers working with a broker instead of going directly to the lenders, and how can working with a broker help me?

Navigating the mortgage application process can be tricky, even if you’re not a first-time borrower. Here is where a mortgage broker comes in – brokers are experts in their field, and most are well-seasoned in navigating the application process. They can help explain financial terms and recommend loan features based on your needs and circumstances.
They can also help handle the majority of the application process for you, ensuring the experience is stress-free and straightforward.

Someone who understands your needs.

 Most brokers will specialise in particular areas of lending, meaning that you will likely be able to find a broker whose expertise aligns with your specific borrowing scenario. These brokers have years of experience and can answer questions and offer advice tailored to your needs and situation. 

Access a better deal.

Working with a broker can get you access to a much larger range of products compared to speaking directly to a lender. Brokers will compare loan deals across their entire panel of lenders when deciding which products to recommend, including smaller lenders that you may not have thought to go to, or particular lenders that only offer loans through brokers. 

In contrast a bank will, obviously, only show you their own loan products. If there’s a deal that’s a better fit with a different lender, you’re not going to hear about it from your bank.

A broker, however, will show you the most well-suited products across all of the lenders they have access to. And although brokers are paid commission from the lenders, best-interest regulations require that they give you the most suitable product regardless of the commission they will earn for it. 

Personalised service.

Even prior to the regulation changes, from ASIC’s 2019 survey 42% of borrowers were certain their broker got them the best rate available, compared to only 17% of borrowers who went direct to the lender.
Borrowers who work with a broker tend to be more satisfied with the service they have received and more confident in the product they have chosen.
A good broker can help their clients with more than just their home loan, too. Many brokers can help you with other loan products, such as car, business, or personal finance. Your broker can connect you with auxiliary services as well, such as recommending a reasonably proceed conveyancing service or a reputable solar company. In short, your broker can become a hub for many of your financial and property needs. 

But what about the cost?
Of course a broker has to get paid for the services they provide, but it is the lender that foots that bill, not you. In some cases a broker may charge a fee that is refunded at the time of settlement, but unless your scenario is particularly complex or requires an unusual amount of work or documentation, working with a broker usually won’t cost you anything at all.