With interest rates currently hovering around record lows, and speculation rife that the Reserve Bank of Australia may drop the official cash rate even further in 2015, many Australians may find themselves considering entering into the property game.
If entering into the property market is in your sights, regardless of whether you’re a first home buyer, owner-occupier or are looking to invest, you may be questioning whether you should look into the services that a mortgage broker can offer.
Consumers have many options available to them when it comes to borrowing money to finance their home. Borrowers can go through a bank, a credit union, an online lender or seek out the help of a mortgage broker.
According to research released in November last year conducted by research group ‘comparator’, mortgage brokers were responsible for 67 per cent of the growth in the mortgage market when comparing the four quarters ending September, 2013 to the same period in 2014.
These findings indicate that more and more people are turning to brokers. The question many people may be asking is ‘why?’
A lot of people out there aren’t quite sure as to what a mortgage broker actually does so let’s start with the basics.
What is a mortgage broker?
A broker acts as the middle-person between borrowers and lenders who fund and service your loan. While you can approach a lender directly, an advantage of using a broker is that they will search for the most suitable loan from a wide range of lenders and have a sound knowledge of the current market.
Below, we’ve put together an easy to follow rundown of how a broker could potentially help you to grab a piece of the property market in 2015.
They’ll look closely at your needs
A mortgage broker will be able to help you determine what it is exactly that you want and need from a home loan, and furthermore, help to find the right loan product to meet those wants and needs.
They will look at how much you can afford to borrow
Based on the information you provide them with, your broker will be able to give you an idea of how much money you can borrow. A broker can also arrange loan pre-approval, which could help to give you a little more peace of mind as to the price range you can afford before hitting the pavement in search of your new home.
Your broker will complete a comparison
Your broker has access to numerous home loan products that they can compare on your behalf. They’ll then present you with your best options and provide you with expert advice so that you can make an informed choice as to which home loan is best for you.
Lenders can also explain your loan options and programs, however, they’ll only talk about the loan products they offer as opposed to the wide range of products that a broker has access to.
A broker does the background work
There’s a lot of paperwork involved throughout the home loan process. Luckily, your broker will be able to complete the paperwork on your behalf and follow-up with the lender, if and when needed.
Should any issues arise during this process, the broker will work with the lender to find a solution on your behalf.
Keep in mind that using a mortgage broker is a service that comes at no cost to you: You really have nothing to lose by seeking expert advice about one of the most important investments you’ll ever make in your life.
If you’d like to complete a free home loan comparison online and connect with a broker, click here.
As Communications Manager at HelpMeChoose.com.au, an online comparison service, Sarah Cannata helps to educate consumers about their many options in regards to home loans, private health insurance, energy and life insurance.
*The information provided in this article is intended for an Australian audience. It should not be relied upon for the purposes of entering into any legal or financial commitments.
I think that you should hire a broker if you don’t think you can handle all the research on your own. It is important that you are able to have all the relevant documents when it comes to your mortgage, and that can be a lot of stuff to handle. If it were me, I would probably try hiring a broker just to make sure that my mortgage won’t be too high, and that the payments are manageable.
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