It is a hard fact that home buyers are confused on the first steps to take in purchasing a new home. The main reason is that there’s a huge range of option to choose from. Choosing the right one can be confusing in terms of rate, loan terms, and features.
The vast range of home loans available today offers a lot of benefits for home buyers depending on your situation. However, the main problem is how to identify what’s right for a certain home buyer. This is where home loan brokers come in most handy. They can direct you to the right loan according to your requirements and your situation.
Why Consider Home Loan Brokers When Purchasing A Home
It is no wonder that about 50% of Australians use mortgage brokers to match them with the right home loan to purchase a new home. So why should you consider home loan brokers? Here are a few reasons why.
Mortgage broker services are almost free
Over 50 % of mortgage loans in Australia are bought via a mortgage broker. Home loan brokers services tend to be free because their payments are from the commission rate they get from the loan provider which they eventually match you with. Potential brokers who can help you are not associated with just one loan provider and therefore can use their resources to match you with the right one. But they still receive commissions on the right match they make.
Mortgage brokers gets paid when they help
How do we know they are not really siding lenders who pay out for the best commission rates? According to a longtime independent broker in Australia, all traditional banks pay the same commission rates as the rest. Even non-traditional loan companies pay commissions on the same range.
The Mortgage and Finance Association of Australia’s National Consumer Credit Protection Act mandates brokers to disclose details of their commission rates. Brokers are audited regularly to ensure that disclosure is happening. Therefore, it’s always a smart move to ask your broker details of their commission upfront.
Niche Broker or Mainstream Broker
When looking for home loan brokers, you can either go for a niche broker or through the mainstream broker. It is your decision whether you decide to go using a broker associated with a bigger community of loan providers. Although mortgage brokers normally have an excellent community of loan companies, they could just market and sell loan products to which they are licensed to.
Specific brokers may not be certified to discuss every single loan companies and traditional banks in the market. Many brokers prefer to use a niche route, sticking with a couple or three loan companies that satisfy specific demands of their customers.
Very good and up-to-date knowledge
The home loan industry is very competitive. And to remain on top of the business, brokers will have to constantly be updated with news and information. Therefore, you can expects home loan brokers to be totally up to date, having good and in depth knowledge about their field of expertise.
Recommend only the best loan
Most brokers are by nature small businesses. They depend on good reputation and word of mouth marketing. Bank loan representatives market their very own services only acknowledge mortgage loans coming from employers. But note that a professional mortgage broker who spent years in the industry know very well which ones are the best and they will suggest only the best loan option for the customer according to their needs. You’ll get better interest rate and home loan applications are bearable, compared with working directly with the bank.
Brokers can find you second chance loans
For those who have a negative credit rating, expect the banks to deny you of a loan right off the bat. But note that there are lenders who particularly work with people who have negative credit ratings. Home loan brokers can help you find these type of non-traditional and specialized lenders in the industry. They help assess your financial situation to find financial services and products that are within your budget.
Mortgage brokers work with a personal touch
An excellent mortgage broking can customize home loans so that it meets customer needs. Mortgage brokers can give good results while working one on one with every customer, together with a panel of lenders to assess their precise requirements and locate a loan company that suits them. With a good record of client data and no conflicts of interest customers can always seek the services of the same broker for future loans they require. With past client data, the work becomes easier for both parties.
Home loan brokers can help you with all the paper works too
So you have finally chosen a home loan that fits your needs. When you work with a mortgage broker, the burden of having to fill tons of paperwork is a bonus because your broker can do that for you. All you need to do is sign the documents so that the process will be on its way. You don’t need to understand jargons as your broker will take care of that for you.
Working with home loan brokers provides many benefits. If you are a first time home buyer, ask friends and relatives for mortgage brokers they have already tested. Most of the time, the best in the industry are those recommended by word of mouth. If you prefer to find a mortgage broker in your area, reading through customer testimonials can be beneficial too.