Guide To Mortgage Brokers Brisbane
Mortgages are now the standard for securing funds to buy a home. This leaves some homebuyers with a little bit of anxiety. How do I find a mortgage? What does a good deal look like? What documents do I need, and which loans fit my financial situation?
For homebuyers with mortgage anxiety, there are always brokers. Brokers work with your financial situation and use their connections to get the best terms on loans. If you’re not familiar with the world of mortgages, you might consider getting one.
But is it all sunshine and daisies? Are there disadvantages to hiring a broker? How do you find the best ones, and what do they do in the first place? This article will discuss everything you need to know about mortgage brokers- what they do, how they do it, and how to find good ones.
Hopefully, by the end, you’ll be able to make an educated decision about whether you need one. So, let’s jump right into it with the most important question:
What Is a Mortgage Broker?
So, let’s get the nitty-gritty out of the way first. What exactly is a mortgage broker, and how can they help you get good deals on loans?
A mortgage broker is a person who has made securing deals on mortgages their job. They train for years, gathering skills and licenses, to secure good mortgages. Their job is to help people find the right mortgage for their financial needs.
Mortgage brokers do all of this by bringing multiple offers to the table. By making companies compete for your money, they can get better terms. They also compare and contrast different mortgages to see what you can save.
You may be thinking: Well, I could do that! But that’s not all. Mortgage brokers can also help you get the required documentation to find an offer together. Mortgage-finding requires lots of documents, so you’ll need someone to help you work through them.
They can also help work around your financial situation. By working with you to spot holes in your financial life, brokers can help you get better offers. They do this by advising you on how to up credit scores and other figures.
So, getting a mortgage broker may seem pretty tempting. They take the really hard work off your shoulders, so you can get back to more important things. In addition, they can help secure a financially stable future for you and your family.
But what are the advantages of hiring a mortgage broker? Are there any disadvantages?
We’ll give you the good news first. Hiring a mortgage broker makes securing a good mortgage a lot easier. It’s not without its flaws, but it does have the following advantages.
1. Mortgage Brokers Know the Field
Mortgage brokers are incredibly knowledgeable on all things mortgage. It’s what they do for a living, after all.
If mortgage brokers want to make more money for themselves and their families, they have to get more customers. Getting more customers means satisfying the ones you already have. Satisfying the customers you have means doing your research. Doing research means finding the best deals possible.
When you hire a mortgage broker, you know you’re getting intimate knowledge of the whole mortgage field. Brokers might know of exclusive offers by companies that regular people aren’t aware of. They use this knowledge to bring you a smorgasbord of offers and work through which one is best.
They also stay connected with the mortgage market. This means they know lenders and how trustworthy they really are. They’ll be able to spot hidden fees and weed through the fine print for any slimy clauses. Nothing escapes a mortgage broker’s eye.
2. They Can Clear Obstacles
Mortgage brokers can also help clear obstacles between you and a good mortgage. If you have financial issues that you haven’t yet resolved, mortgage brokers can help. From working on credit to finding and paying off delinquent accounts, mortgage brokers are a huge help financially.
If you’ve ever tried to buy something on credit, you know how sticky things can get. You may have even experienced this when renting an apartment. Credit can really mess things up for you if you’re not careful.
Brokers help you work through this problem by providing you with advice. They can look over your credit history and help dispute errors and spot delinquent accounts. They’re a great resource for anyone looking to clear financial obstacles to a mortgage.
3. A Broker Does the Hard Part
Instead of putting in all that time to research loan terms, you might hire a broker. Brokers are trained professionals who are already familiar with the tricks of the trade. They spend their time putting in the hard work to find deals so you don’t have to.
Regular homebuyers may not be familiar with certain pieces of mortgage jargon. They might also not be able to take the mathematics of mortgages and apply them to their financial situations. No matter how much research you do, you’ll never be able to do as much as a broker.
Additionally, there’s a lot of documentation you need to actually get a mortgage. Brokers can help you get all of this together before entering the process of securing a deal. With this advantage, you’ll seem like a prepared and organized lendee.
No matter what kind of mortgage you’re going for, a broker will be able to help you get it. They can also explain the terms of mortgages and help find fine-print clauses. This takes some homework-time off your shoulders. Think of it like those essay sites for college students. You scratch their backs, and they scratch yours.
4. They May Be Able to Get Fees Waived
Buying a house is getting more and more expensive. With higher property prices and all the fees, it can add up. Some mortgage lenders will charge extra fees on mortgages. These often come in the form of appraisal fees but can come in many shapes and sizes. The idea is to gain a little extra security and cover some costs.
Mortgage brokers may be able to use their skills and connections to get these fees waived. You may end up saving hundreds or thousands of dollars. With these fees, you’ll have an easier time paying off your broker.
Not to mention, you’ll want financial stability for your household going forward. Pinching pennies anywhere you can help you get this financial security and get up on your feet.
Getting a mortgage broker may add a pretty hefty sum to your mortgage. But, when you consider long-term savings, you may just be making up that difference.
It’s not all roses with mortgage brokers. Sometimes, mortgage brokers work against the interests of their clients. Sometimes clients can’t afford their fees. In any case, here are the disadvantages you should look out for when hiring a broker:
1. They Have Their Own Interests
While you may trust your broker, keep in mind that they’re still profit-motivated. brokers will often take steps to make profits, even when it inconveniences their clients. This became clear in the financial crash of 2008 when brokers engaged in slimy practices to further their own interests.
Mortgage brokers may choose not to get you the utmost best offer if it can make them more money. You might even want to do a little counter-research, just to make sure they’re pulling up good offers.
If you’re hiring from a brokerage, make sure to do research on the firm of your choice. They may have a seedy past. If you find bad reviews and accusations of poor practices, try another firm. Just remember that there’s always an alternative.
2. Trust in Brokers is Declining
After various broker-related disasters, trust in the financial system is somewhat low. Brokers bear a lot of the burden of this distrust.
But it’s not just the people who distrust brokers- it’s the banks, too. Some banks won’t even work with brokers because brokered loans are more likely to default. Lots of institutions try their best to avoid brokers wherever they can.
Thus, you may just be better off brokering for yourself. It will take more research and time, but it might pay off. Keep in mind, though, doing what a broker does is a huge headache. This is especially true for people without their years of training.
3. Broker Fees Can Get Quite High
Most brokers choose to get paid as a percentage of the overall deal secured. This means that brokers will take the loan amount, and charge a certain portion of that. For example, if you get a $350,000 mortgage, you may be charged 1% of that mortgage.
That may not seem like a lot- only one percent- but when you do the math it totals up to $3,500. If you’re dropping lots of money on a down payment for a house already, you may not be able to swing this.
The remedy for this may be to just look around. Lots of different brokers have better prices, and it’s possible to find one that works for you. Just remember to take stock of your finances beforehand so you know what you can and can’t afford.
How to Choose a Mortgage Broker
Now that you know a thing or two about mortgage brokers, here’s a quick guide on how to choose the right broker.
1. Call Multiple Brokers
Calling multiple brokers is imperative. Like this, you can see what kinds of offers are on the market. If one broker’s rates are too high, simply go to another one. Having options will help you keep things competitive and you will ultimately benefit.
2, Ask For Client Reviews
If you aren’ asking a broker if you can speak to a former client before signing on, you aren’t doing it right. Speaking to former clients will help you to get to know your broker’s reputation. With this information, you can find out if they are right for you.
Brokers may, however, send you to a biased source. Make sure to look at other avenues for client reviews. For example- online. There, you’ll get a wide variety of random and unbiased opinions. You want to get to know your broker, not what your broker wants you to know.
3. Get Your Credit Score
When looking for a mortgage broker, it will help to have your credit score. Yes, brokers can help you get these documents together. But, it’s also good to have them together beforehand to make the whole process easier and quicker. Think of it as a courtesy to your broker.
You also might want to start working on your credit before you start talking to brokers. With better credit, you’ll be more likely to get better offers. Having a top-of-the-line broker means getting top-of-the-line mortgages. Follow our tips to get your credit score, or look online for a more comprehensive guide. When you’re loan-hunting, every little edge helps.
We recommend having a credit score of 750 for the best results.
4. Compare Rates
Remember those rates we mentioned above? Well, if you’re looking for the best broker for the best price, you’re going to have to study the home loan market a little.
Brokers come in many shapes and sizes. They work with all different types of folks, and so, their fees will differ heavily across the board. If you do your homework, you’ll be able to find lower rates on better brokers.
With information on various brokers’ rates on hand, you’ll be able to decide what’s best for you. Your financial situation will give you different allowances. Your broker might be able to work with that, but you also might just want to go for a cheaper broker. Either way, it will be good to know what you’re working with.
All in All
All in all, mortgage brokers aren’t without their flaws. They are, however, a great way to get the best offers on loans and secure a financial future for your home. Know your financial situation before seeking out a lender. Also, consider many lenders. It will pay off in the end.