Should I use a mortgage broker?

By Maria Milillo, Raine & Horne

The answer is a categorical yes. With hundreds of lenders to select from, you may decide to get a mortgage broker to do the legwork for you. Brokers such as Our Broker can help you find a suitable loan and arrange special deals.

Most banks only offer the standard variable rate, and discounts when wanting to increase market share. Remember it is not in the bank’s interest to have their existing clients on lower rates.

In a nutshell, a mortgage broker negotiates with banks, credit unions and building societies on your behalf to arrange a mortgage. Moreover, a mortgage broker can offer you a variety of loan options. They can help you select a loan and manage the process through to settlement. Going to an individual bank, you’re only going to get the rate they are offering that day. If you work with a broker, they are going to shop your mortgage business around on your behalf to find you the best rate. For example, if you’re on 5% for a variable rate loan, you’re probably paying about 0.5% more than you should be. This higher rate could be costing you tens of thousands of dollars over the term of the loan. A mortgage broker can hep you find these savings.

That’s the bread and butter benefits of using a broker. However, there’s so much more. Banks at different times have varying lending appetites depending on the level of available credit sources, credit growth and whether there are limitations on their ability to lend money. It’s well-documented that banking watchdog APRA has imposed restrictions on interest-only lending to investors. Some banks haven’t hit these limits yet, and only a broker will know who these lenders are.

The point is that you can still get an interest-only loan, you need to know which lender is writing these loans now. The fact is that while the major banks have limits, a mortgage broker has access to the international and regional banks, credit unions and building societies. This entree opens a vast group of lenders to investors.

Of course, a mortgage broker will take the pain out of dealing with the bank or lender. They’ll negotiate on your behalf with the bank for the best rate and organise the extensive paperwork involved in taking out a new mortgage. They’ll collect any additional nuisance data that the bank requires to rubberstamp the loan and will present your financial position to a bank in a way that makes sense to the lender. In other words, a broker talks the banker's language and will present you in a light that highlights the reasons why you are a good credit risk. Perhaps it’s a fact you’ve been in a job for 20 years, and have a successful business, a 60% LVR across your investment portfolio, or an excellent credit record.

Finally, many mortgage brokers are highly experienced, former bankers. Therefore, you are dealing with someone who often has more lending experience than those working for a bank or credit union.

Better still if you use a mortgage broker such as Our Broker, who is aligned to Raine & Horne, you can be sure you are using a financial specialist that is entirely across the minutiae of the real estate transaction.

To talk to a financial specialist from Our Broker today, call 1800 913 677.