How does an Australian mortgage broker work?

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Category : mortgage broker

Australian Mortgage Brokers act as an intermediary who serves to bring Home Loan borrowers together with suitable mortgage lenders. Mortgage Brokers do the shopping around for the borrower and in most cases collect their fee from the chosen lender rather than from the borrower.

Should You Use A Mortgage Broker?

The easiest way to look at it is you engage a Mortgage Broker for the same reason
you take your car to a professional mechanic or book your holidays through Licensed Travel
Agent. They have specific industry knowledge and daily experience in the compound Home Loan
Marketplace.This often means that borrowers end up with a more suitable mortgage than if
they did all the research and “legwork” themselves.

What Do Mortgage Brokers Do?

The basic tasks of an Australian Mortgage Broker are listed below; these duties differ on a
case by case basis:

  • Discuss the borrower’s needs and preferences regarding Home Loan Finance.
  • Determine the borrower’s current financial situation.
  • Identify the clients are borrowing power – find out how much they can borrow.
  • Shop around for the borrower to find the most suitable Home Loan available.
  • Gather all the documents the banks and lenders will need when assessing the application.
  • Provide a clear loan comparison in writing.
  • Help with preparing and then lodgement of the loan application forms.
  • Track the loans progress with the lender and keep the borrower informed right through to loan settlement.
  • Stay in touch with the borrower throughout the term of the loan and assist with loan top ups or refinancing.

How-To Choose A Reputable Mortgage Broker In Australia

Like in any industry, there are good and bad Mortgage Brokers. In Australia three of the biggest mortgage broking companies are : Mortgage Choice, Aussie Home Loans and Australian and Finance Group. They all offer a similar service, but there are some things you can do to ensure
You end up with a qualified, experienced and trustworthy broker. Some questions you should
consider when choosing a Mortgage Broker:

  • Do they charge for the service?
  • Are they paid the same commission no matter which loan or lender the borrower chooses?
  • Do they explain all of the fees associated with the mortgage?
  • Are they independent or do they only deal with a certain lender?
  • Are they qualified, experienced and have testimonials from happy clients?
  • Do they explain the effective interest rate of the loan?
  • Do they justify their recommendations?
  • Do they carry professional indemnity insurance? (which protects the borrower)
  • Do they have access to an extensive range of lenders and therefore loans?
  • Do they belong to a reputable industry association? (The MIAA in Australia)

Mortgage Choice has developed a Consumer Checklist to assist borrowers when choosing a
Mortgage Broker.

How Much Does A Mortgage Broker Cost?

In the vast majority of cases, Mortgage Brokers do not charge their client (the borrower) anything
For the service they provide. The lenders pay the brokers for introducing a customer
To them. See more this site: mortgagebroker247.com.au

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