Learn about mortgages & mortgage brokers!
What does a mortgage broker do?
A mortgage broker/adviser is an agent who works on behalf of the borrower. Their job is to source and facilitate the loan application, ensuring a lending product that suits your needs is secured. Beyond the transaction, an experienced mortgage brokers can provide credit advise on structuring your lending across different credit products which could enable a better future planning. A broker can also provide ongoing support for any existing mortgages by renegotiating your interest rate with your current lender or a new lender if necessary. This is generally a easier process than if you were to contact the bank directly. Also ask about these! - Property reports - Credit report review - Professional referrals
How should I prepare for a meeting with a broker?
When preparing for a meeting with a broker, the most important thing is to have an understanding of what you are looking to achieve. Are you looking to purchase a property? Will it be a home or investment? How much are looking to spend? Are you looking to refinance? Is this to reduce the current repayment or perhaps pay off your loan quicker? Also equally as important is to have an understanding of your financial position. In order to correctly assess and provide outcome we need to ask a number of questions regarding your finances. - What are your income sources? How much do you get paid? How much rent do you receive? - How much are your monthly expenses on various categories? - What are your assets & liabilities? How much savings do you currently have and is willing to contribute to the purchase? A well prepared meeting would mean a faster outcome and benefits everyone involved.
Why use broker instead of the bank directly?
Having a mortgage broker / adviser in your corner has many distinct advantages. Choice : A broker can offer you a full view of all the lenders on their panel vs the bank who can only offer you what they can offer. This will ultimately save you time as scouring the internet for the right lender & product can be very time consuming. Pricing : A broker and a banker will always offer the same pricing (interest rate) due to agreements within the banks to avoid "channel conflict" as well as to uphold any anti-consumer practices. Best Interest Duty : A broker in the residential lending space is regulated by ASIC to always consider the customer's interest first regardless of what they are paid by the banks. This is beyond the requirements for bankers as they are obligaged to their business & shareholders.
Does it cost anything to use a broker?
In almost all scenarios you are not required to pay a fee at any stage of the loan process to the broker. A broker gets paid their commission by the lender that eventually wins your business. Sometimes, depending on the complexity of your situation as well as potential urgency. A broker may charge you a fee. For us, if we are to have this arrangement, we will discuss this with you prior to proceeding credit assistance. This will also be fully disclosed in our credit proposal. Note that whilst the broker may not charge you for the service. There are often other costs chargable by the bank / state revenues office / your legal representatives.
How do I know that the recommended option is the best one?
In order for a broker to recommend the most suitable product we would need to consider all of your financial circumstance as well as meeting your needs and show financial benefit. Some obvious factors might be - Interest rate - Fees & charges. - Features & benefits such as branch access, credit cards & savings accounts. Some other factors that may not be obvious but can be equally important. - Time required for approval. - Application process - Lender reputation / positioning in the market. - After settlement services. In order to consider if the recommend product is most suitable, your broker will be able to explain how all of the above factors and how they fit to your needs.
What documents do I need to gather to apply for a loan?
Whilst each lender may require different documents depending on your particular circumstances They will largely be the same as they will need to prove the same set of facts. We will provide a tailored checklist for you during our appointment but here are some examples below. Verification of Identity - One photo ID, driver's license or passport - One secondary ID, passport, medicare card. Verification of Income - Two most recent payslips. - One recent rental income statement. - Three months bank statement showing salary Verification of liabilities. - 3 months statement of the liability that you are looking to refinance.