There are many ways you can get a home loan. You could simply walk into your local bank or visit a lender. You could look online and apply for a home loan without leaving the comfort of your couch. Or you could seek the services of a mortgage broker. But why should you? What do they actually do for you and what are the benefits?
A mortgage broker acts as an intermediary between borrowers and lenders. They assess your circumstances and research the various products on the market from the hundreds available, choosing the best fitting loan for you. The borrower does not get charged for this service, as brokers are paid a commission by the lender once the mortgage is settled.
Finding the Right Loan for You
Rather than sifting through hundreds of jargon-filled home loans, potential lenders and interest rates, your mortgage broker will crunch the numbers and present the best options to you based on your finances and personal situation. They’ll sit down and spend time understanding exactly what you need or what your plans are and find the most suitable product.
A good mortgage broker will determine how much you can borrow from various lenders as well as the maximum amount that you should borrow in order to protect yourself. They determine the exact financial impact of the loan on your lifestyle and ensure that if rates go up, it won’t put you in strife.
What Do Mortgage Brokers Assess?
Whether you’re a first home buyer or a seasoned investor, brokers can help find the best option for you. At your appointment, your broker will look at your current financial situation as well as what you want to achieve, discussing:
- Your eligibility for a loan
- Your borrowing capacity and repayment management
- Your capacity to pay for a loan
- Lender costs
- Lenders Mortgage Insurance (LMI)
If you are satisfied with one of the loan options put forwards, they’ll get you pre-approved with that lender so you can go out and start looking for properties, knowing exactly how much you have to work with.
Brokers are independent and do not favour any one lender. It’s the lenders who compete for the attention of brokers, who will seek out the best possible rate or deal from one of the dozens of lenders with whom they are accredited. They are paid the same amount regardless of whether you pay four per cent or 10 per cent in interest, meaning there’s no enticement to pressure you into getting a higher rate.
As brokers are paid a portion of the loan amount by the lender after the deal is finalised, they won’t receive anything if you decide not to proceed with the options they present. So it’s in the broker’s best interest to get you the lowest rate or best deal to secure their commission.
Are You Looking to Get a Home Loan?
At Kaboodle Finance, we can help you get a great home loan suitable for your individual circumstances. Get in touch today to speak to one of our mortgage brokers and explore your options. We can also assist with refinancing, SMSF lending, debt consolidation, insurance and car loans.