There are plenty of ways to obtain a home loan.<\/strong><\/p>\n You can walk into your nearest bank or lender, you can trawl through all the options online and apply for a loan without leaving your seat, or you can seek out a mortgage<\/a> broker.<\/p>\n But what exactly does a mortgage broker do, and why would you consider using one?<\/p>\n Mortgage brokers do the legwork in tracking down and setting up the best home loan for you. Picture: Getty<\/p>\n<\/div>\n As a guide, a mortgage broker\u2019s role can take in any or all of the following functions.<\/p>\n Rather than you sifting through dozens of potential lenders<\/a>, home loans<\/a> and interest rates, it\u2019s a broker\u2019s job to crunch the numbers and provide you with the best options, based on your personal situation and finances.<\/p>\n Essentially, mortgage brokers do the legwork in tracking down and setting up the best home loan for you.<\/p>\n 1st Street managing director Jeremy Fisher says the broker, first and foremost, works for you.<\/p>\n \u201cWhat a mortgage broker typically does is put the customer hat on and looks at what is the most suitable lender or suitable product for the customer, based on their needs,\u201d he says.<\/p>\n \u201cThey\u2019ll sit down with the customer and spend an hour understanding exactly what they want to do or achieve and what their plans are, and then obviously look to provide them with the most suitable lender or product, depending upon their circumstances.\u201d<\/p>\n Fisher says a good broker will not only determine how much you\u2019re able to borrow from various lenders, but also the maximum amount that you should<\/em> borrow, in order to protect you if things change.<\/p>\n \u201cWe sit with them, understand their situation, do analysis of all their expenses, their incomes, understand their plans, and then look and research around the various lenders that are suitable,\u201d he says.<\/p>\n \u201cWe make sure a client can afford it if rates go up to 7% or 8% and how that is going to impact on their lifestyle, or how it will impact if they get a loan tomorrow, versus what they\u2019re paying in rent today.\u201d<\/p>\n \u201cMany times I\u2019ll talk clients down from what their expectation was before they walked in, around how much they want to borrow, because it doesn\u2019t make sense financially and would have put them under financial stress.\u201d<\/p>\n What do banks look for in loan applications?<\/strong><\/em><\/p>\n It stands to reason that a person who lives and breathes home loans every day should be able to secure a better deal or interest rate than someone who\u2019s searching for the first time.<\/p>\n \u201cA customer should be able to come to a broker and get a lower rate than what they can get by walking into a branch,\u201d Fisher says.<\/p>\n Should you tick off on one of the loan options put forward by a broker, they\u2019ll do further legwork to get your loan pre-approved with that lender.<\/p>\n That then gives you the ability to go out and bid on properties, knowing the lender has approved you to borrow a certain amount.<\/p>\n What\u2019s your loan strategy?<\/strong><\/em><\/p>\n Most brokers will be at pains to stress that they\u2019re independent, meaning they don\u2019t favour any one lender, and will seek out the best possible deal or rate from the dozens of lenders with whom they\u2019re accredited.<\/p>\n \u201cIrrespective of whether they work for a franchise group or a smaller business, they\u2019re independent from a particular lender,\u201d Fisher says.<\/p>\n \u201cAs a general rule, all mortgage brokers are accredited with 20 to 40-plus lenders.\u201d<\/p>\n You may not realise that the vast majority of mortgage brokers aren\u2019t paid by you, the customer.<\/p>\n Instead, they\u2019re paid a portion of the home loan amount by the lender once the loan is finalised.<\/p>\n That means that if you elect not to proceed with the loan options they put in front of you, you won\u2019t pay anything, and they won\u2019t receive anything.<\/p>\n It\u2019s one of the ways you can generally be sure they\u2019ll hunt the best deal down for you: they want you to be happy so you\u2019ll proceed with the loan.<\/p>\n \u201cA broker gets paid the same, irrespective of whether a customer pays 4% or 10% (interest rate). So it\u2019s in the broker\u2019s best interest to get the customer the lowest rate, because there\u2019s no enticement for a broker to get a higher rate and get paid more.\u201d<\/p>\n
\n <\/p><\/div>\n Realestate au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"![\"what-does](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/10\/06115243\/what-does-a-mortgage-broker-do_800x600.jpg?resize=2000%2C1500&ssl=1\")
<\/p>\nWhat is a mortgage broker and what do they do?<\/span><\/h2>\n
Assess your borrowing power<\/h2>\n
Find you the best deal<\/h2>\n
Get you pre-approval<\/h2>\n
They\u2019re independent<\/h2>\n
Who pays the broker?<\/h2>\n