Regardless of whether you’re a seasoned investor, first home buyer or are simply looking to refinance, it’s no secret that home loans have the potential to be stressful. From finding the best possible interest rate to presenting your application, dealing directly with a lending institute can be intimidating if you’re not confident in how the process works. The alternative? Partnering with a Brisbane mortgage broker.
In simple terms, the role of a mortgage broker is to act as an intermediary, or someone who navigates home loan products and their applicable terms on behalf of individuals or businesses. They serve as the ‘middleman’ between the lender and the borrower and handle the time-consuming process of securing the loan and gathering the considerable paperwork involved.
The end goal is to act in your best interests when finding a home loan product and negotiating the terms on your behalf.
Once they have enough information to paint an accurate picture, a mortgage broker will calculate what an applicant can afford to borrow, source home loan products that suit the individual’s situation, and present the applicant with financial products that best match their position.
A good mortgage broker will then go on to explain how each home loan works, and what the relevant costs are such as fees and interest rates. Once the applicant decides on a home loan, the mortgage broker will then package their application in a manner that positions them in the best possible light to a lending institute, and will ultimately guide the applicant through the entire settlement process.
Although not applicable in every circumstance, it’s not uncommon for a client to stick with their mortgage broker for future financial assistance if they have received high quality customer service, and were happy with their outcome. Examples of this include returning to the same mortgage broker for assistance with refinancing, obtaining a personal or car loan, and even options to purchase an investment property. In some instances, reputable mortgage brokers also report receiving second and third generation customers based on referrals.
Regardless of your financial situation or what your property end goal looks like, almost everyone can benefit from using a mortgage broker. For Queenslanders trying to navigate an extremely competitive property market, partnering with a local Brisbane mortgage broker who knows the area can also be a tool to provide additional insights as well. In fact, just a handful of the benefits of using a mortgage broker include the following.
While banks offer many products and services, home loans are the speciality of mortgage brokers. Arguably, the superpower of a mortgage broker is their ability to turn the complexities of a lender’s policies into black and white information, which can be invaluable when it comes to making decisions about your financial future.
Did you know that Australia has over forty different lending providers? Your mortgage broker certainly does, along with the ins and outs of almost every one. A mortgage broker provides you with one point of contact and can save borrowers countless amounts of both time and money.
Trying to juggle work, social and home life around bank appointments has the potential to add extra stress to a home loan application. Mortgage brokers are all too aware of this, and instead apply a level of flexibility when it comes to ensuring that they’re on call and available for their clients, even if that means outside of business hours.
When going to a bank for your mortgage solutions, it’s important to remember that the person you’re dealing with is only able to present the bank’s own individual loan products. In comparison, it’s quite the opposite for a mortgage broker, as it’s you that takes centre stage on their priority list and can offer a wider variety of options.
Applying for a home loan can be a stressful experience if you don’t understand the technical terms being thrown around, or you feel like you’re not being told the entire truth. Working with a mortgage broker means that you have a partner to help you navigate this world, and will be the first to tell you if a certain product isn’t the ideal fit for you.
In addition, a local Brisbane mortgage broker will also have connections with other real estate professionals such as conveyancers and building and pest inspectors, which can help make life easier for the applicant.
This is often a wildly different approach to what consumers can expect from a bank, and the added convenience of only having to submit one set of documents also helps to push mortgage brokers as the ideal choice between the two.
Australians have a reputation for being loyal creatures, so it should come as no surprise that the first stop for many prospective homeowners is a trip to their everyday banking institute. Approaching a bank for a home loan can work to your advantage if you have a good credit history and if you are in a stable financial situation, as banks big and small will often deem you to be an ideal loan candidate and the type of person they want to do business with.
Unfortunately, what this process also translates to is that buyers only receive information about their specific bank’s range of products – which ultimately may not be the most suitable fit for them. In addition, self employed applicants, sole income households, applicants with smaller deposits and even someone who missed a phone bill payment in 2016 may have a much harder time getting approved for a home loan when applying directly through a bank. For a growing number of Aussies, partnering with a mortgage broker provides a solution.
With the services of a mortgage broker now providing an alternative to the traditional bricks and mortar lending providers, a growing number of Queenslanders now source a Brisbane mortgage broker to help them navigate the world of home loans instead of a bank.
It’s also important to remember that the key point of difference between using a mortgage broker or a bank is that a mortgage broker has access to a wide variety of home loan options. Ultimately, it is quite literally their job to find you the best match to suit your individual circumstances – they work for you, and not the banks.
Even applicants with a spotless credit history and strong credentials on paper can benefit from the services of a mortgage broker, as they’re able to help customers explore allthe options instead of only presenting the financial products of one bank or lending institute.
In addition, “packaging” a home loan application is where a mortgage broker really shines. There is never a one size fits all approach with a mortgage broker, as they know what works and what doesn’t, and how it varies between each lending provider.
In contrast, dealing directly with a lending institute employee rarely ever provides the customer guidance that an applicant will often need, which can dramatically increase the chances of the application being declined with no wriggle room, no negotiation, and no advice on what to do next.
Many people make the mistake of assuming that the right time to speak to a mortgage broker is right before they are ready to purchase a home. In reality, their services apply to a wide variety of financial circumstances, with just a handful including the following.
For first home buyers, waiting to see a mortgage broker right before you’re ready to make a purchase is often a mistake. In fact, a mortgage broker can often guide a potential first time buyer through options that may significantly cut down on the required deposit amount, such as federal or state grants and concessions, whether paying Lenders Mortgage Insurance for deposits less than 20% isn’t such a bad idea, and even exploring options such as guarantor loans. Ultimately, a mortgage broker can help a first home buyer through guiding them with resources and information that they may not previously have been aware of.
In an era when interest rates are soaring through the roof, a number of Queensland households are making their first ever visit to a Brisbane mortgage broker to explore their options. While refinancing to a new home loan product may not always be the only choice, alternative options presented by a mortgage broker may include changing the terms of a home loan, consolidating existing debt, or even unlocking certain home loan features such as an offset account. As a general rule, people often turn to refinancing when they’re under pressure, but partnering with a mortgage broker can help to relieve this stress while providing real world solutions.
Some people enjoy dabbling in the stock market, and others in cryptocurrencies. However, many Australians have traditionally viewed investing in property as a ‘safer’ long term option for capital growth, and with less exposure to potential risks. However, purchasing a second dwelling with the intention of generating a profit is an entirely different experience when compared to that of a first home buyer or traditional owner occupier. A mortgage broker can help first time investors to unlock their equity, explore favourable home loan products, and ultimately guide them towards bringing their version of financial fitness to fruition.
Many investors make the mistake of relying too heavily on the advice of their accountant for their property portfolio. While their insights may be valuable, using a reputable mortgage broker can be revolutionary for unlocking better interest rates, more favourable home loan terms and conditions, and ultimately helping them to identify opportunities for financial growth. In addition, a good mortgage broker will often have a property portfolio of their own, and a local expert can also assist with guidance on suburb and property choices for future investments. What’s more, is that a mortgage broker is the one that handles all the work.
In simple terms, a home loan health check is a free discussion or “check up” aimed at fine tuning all the complexities involved with your current mortgage. Much like an annual physical health check that you would normally head to the doctors for, the aim of the process is to ensure that there’s no minor ailments developing, or nothing present that shouldn’t be there. Usually conducted annually with your lending institute or mortgage broker, a home loan health check can ultimately end up saving borrowers thousands of dollars in the long term, especially in an era where the economic landscape is rapidly changing.
As a mortgage broker usually operates as a small or medium size business, they are usually very “hands on” with the entire process both on behalf of their customers, and with their customers. While sourcing a local operator often comes from word of mouth recommendations, a reputable Brisbane mortgage broker will often be spotted out in the community as well.
For those on the hunt for a Brisbane mortgage broker, it’s a no-brainer that your financial partner of choice should have an in-depth knowledge of what the local real estate market is like. While your mortgage broker shouldn’t double as a property advisor, it’s a good sign if they have a healthy property portfolio of their own, as this shows that they practice what they preach.
When weighing up your options on mortgage brokers in your area, be sure to ask the mortgage broker the following questions:
To make sure that your Brisbane mortgage broker walks the walk as well as talks the talk, be sure to scour the internet for recent service reviews. Check out their social media accounts, Google business listing, and even pay attention to word of mouth recommendations, as the experiences of those who have come before you will indicate what to expect.
In addition, a mortgage broker’s website will also provide some clues as to how they operate. If they are regularly posting blogs that answer frequently asked questions, provide thought leadership on local market conditions, and provide a wealth of free resources that offer no obligation assistance, then you can be sure that your Brisbane mortgage broker of choice actually cares about a customer’s experience, and their wider community.
Despite the lucrative benefits that partnering with a mortgage broker offers, some people still stick to their primary bank, and what they know. To help provide answers on some common queries linked to working with a mortgage broker for the first time, we’ve covered a few of the standard FAQs.
How Do Mortgage Brokers Get Paid?
Many mortgage brokers operate as small businesses or contractors, and earn their income from the commissions they receive from the lenders. The commissions or fees they receive from the lenders will vary depending on the lender, and the commissions themselves are based on a percentage of the loan amount.
As a general rule, brokers are paid between 0.33% and 0.85% of the loan amount as an up front incentive, and an ongoing incentive of 0% to 0.285% of the loan balance per annum. Most lenders pay 0.65% for upfront commissions and 0.15% for trials, GST excluded. While the service is therefore free to the customer, don’t be afraid to ask for transparency and why your broker is recommending a certain product.
Will A Mortgage Broker Really Recommend The Right Product?
Recommendation 1.2 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry recommended that mortgage brokers be required to act in the best interests of the consumer, where a breach of this duty should be subject to a civil penalty. In line with new legislation, mortgage brokers are legally bound to only recommend financial products that are in the best interests of an applicant.
In addition, it’s worth doing your research to ensure that a mortgage broker truly is an independent operator with no allegiances or preferences tied to a big bank. As an example, did you know what Aussie Home Loans is owned by the Commonwealth Bank? Or what about Mortgage Choice, which is listed on the Australian Securities Exchange (ASX) with several major banks as shareholders? In the world of finance, knowledge is power.
How Long Will A Home Loan Pre-Approval Last For?
Finance clauses in a contract of sale can be one of the biggest hurdles that stands between you and your dream home. Thankfully, obtaining the all important pre-approval for a home loan is well within the control of a buyer, and is a process that’s almost always recommended in the current property landscape.
For wannabe buyers who are unfamiliar with the concept, pre-approved finance – otherwise known as a pre-approval or a conditional approval for a home loan – is mutual understanding between a lender and a borrower. A pre approval is when the lender indicates that they are willing to lend the borrower up to a certain amount of money to fund the purchase of a property, ensuring that buyers have the capacity to make offers with confidence. Once granted, a pre-approval is usually valid for three months.
How Long Does It Take To Get A Home Loan Approved?
Pre approvals can take anywhere between a couple of days and several weeks to generate an outcome. As a general rule, the more complex your finances are, and the busier your chosen bank or lender is, the longer the process will take. It can also depend on your broker’s relationship with the lenders, and their processes and procedures as a business. If your application is incomplete, or your lender requires additional information about your financial position, then the process could take longer while the extra paperwork is processed.
Although each bank has a slightly different application process and relevant criteria that needs to be met, most will generally need to see documentation such as photo identification, bank statements, proof of savings, lists of assets and existing debts, proof of income, and a breakdown of your current living expenses. As they can compare multiple lending providers, mortgage brokers are able to help steer you in the right direction and ‘package’ your application to a loan product that best meets your needs.
What Things Will Stop Me From Getting A Pre-Approval?
Unfortunately, there are a lot of things that will stop an applicant from getting approved for a home loan. Just a handful of the most common reasons for a decline include not having a big enough deposit, not being able to prove genuine savings, having a poor credit score, if you want to borrow too much money, you don’t have a stable enough income, your living expenses are too high, or even the fact that you’ve applied with the wrong type of lender.
Thankfully, working with a reputable mortgage broker can help an applicant to avoid all of these things, especially when the partnership starts many months before an application is submitted. A mortgage broker may help the customer to explore options for lower deposits such as guarantor loans, how to improve their credit score, or advising ways to present their application in the best possible light with a lender that best fits their position, particularly for those that are self employed.
Although it might only feel like yesterday for owner George Samios, Madd Loans is celebrating a massive ten years in business as one of the nation’s leading and most innovative mortgage brokers. While the Madd brand has certainly come a long way since its early days as a one man band in East Brisbane, the aim of the game has remained the same: to help ordinary Queenslanders bring their financial dreams to life.
In operation since 2012, Madd Loans have helped over three thousand happy customers to get a ‘Madd Deal’ and unlock their version of financial freedom. From producing free webinar style workshops for first home buyers, regular online blogs that simplify the realms of finance, and even jumping on YouTube to give his thoughts and advice on market updates, George and the team at Madd Loans have worked tirelessly to make the world of mortgages fun.
With a swag of awards under their belts to prove it, George and the team at Madd Loans have become a trusted authority on finance, and offer a wide variety of home loan products that their peers may shy away from, such as low deposit loans and guarantor home loans. Ultimately, the team at Madd are all about the financial journey, and not just the destination. What’s more, is that their customer approval rating of 98% dwarfs the industry average, which sits at just 60%.
If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing solutions from a reputable Brisbane mortgage broker or simply some help from a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.
Although it might only feel like yesterday for owner George Samios, Madd Loans is celebrating a massive ten years in business as one of the nation’s leading and most innovative mortgage brokers. While the Madd brand has certainly come a long way since its early days as a one man band in East Brisbane, the aim of the game has remained the same: to help ordinary Queenslanders bring their financial dreams to life.
In operation since 2012, Madd Loans have helped over three thousand happy customers to get a ‘Madd Deal’ and unlock their version of financial freedom. From producing free webinar style workshops for first home buyers, regular online blogs that simplify the realms of finance, and even jumping on YouTube to give his thoughts and advice on market updates, George and the team at Madd Loans have worked tirelessly to make the world of mortgages fun.
With a swag of awards under their belts to prove it, George and the team at Madd Loans have become a trusted authority on finance, and offer a wide variety of home loan products that their peers may shy away from, such as low deposit loans and guarantor home loans. Ultimately, the team at Madd are all about the financial journey, and not just the destination. What’s more, is that their customer approval rating of 98% dwarfs the industry average, which sits at just 60%.
If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing solutions from a reputable Brisbane mortgage broker or simply some help from a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.
From buying your first home to refinancing, commercial or construction loans – our free service takes the stress out of getting finance. We offer our services Australia wide so why not reach out to us today. We’d love to hear from you.
