“You don’t want to have so much money going toward your mortgage every month that you can’t enjoy life or take care of your other financial responsibilities.”  Dave Ramsey

Opting for a Mortgage Broker will possibly be one of the most difficult financial decision that you would be taking in life and probably the most precarious step to take in regard to your financial status. There are an array of mortgage loan providers out there offering a plethora of mortgages and home loans.

  • So how do you come to the wisest decision?
  • How do you decide what mortgage loan to opt for?
  • Which mortgage provider do you choose?

Since financial decisions are very personal decisions, the answers to these vital questions need to be found by every individual in their own way.

So let’s understand this issue from the very beginning:

What is a Mortgage Broker ?

A Mortgage Broker is a professional that acts as a communication bridge between the mortgage lender and the customer opting for mortgage products. Mortgage Broker play an important role in the mortgage lending and availing, but do not create the rules or restrictions of a loan product.

So what exactly does a Mortgage Broker do?

At the beginning of your relationship with a mortgage broker, he or she analyzes your current financial situation. This may involve an analysis of your credit score, as well as a study of your income and other important financial parameters that determine eligibility for a loan product. With this in-depth analysis the Mortgage Broker makes suggestions for loan products best suited to your needs and financial situation. Along with this the Mortgage Broker can also help you apply for the suitable mortgage products.

Mortgage Broker offer free services:

Lender-paid compensation – This means that the mortgage lender you choose to avail your loan from pays for the services of the mortgage broker.

In general, there are a lot of factors that determine the mortgage broker charges, these include:

  • The Loan Amount
  • The loan product

The fact that Mortgage Brokers have immense knowledge of the mortgage market, usually opting for a mortgage Broker can reduce the hassles involved in choosing the right loan product, applying for it and getting settlements faster.

Do you really need a Mortgage broker?

As a mediator between the borrower and lender, the mortgage broker plays an important role, if you lack an understanding of finance or the loan process. They not only help understand the loan formalities better but also make it easy for you to apply for them. But this is a fairly general picture. Let’s explore the pros and cons of hiring a mortgage broker to understand whether we really need one.

Pros of hiring a Mortgage Broker

  • A mortgage broker clearly explains the financial aspects of availing a loan product in detail for better understanding.
  • A mortgage broker will suggest suitable options based on your financial circumstances and requirements which will in turn help you compare the loan products rather than selecting them randomly.
  • Most mortgage brokers are paid by lenders so you can access their knowledge for free.

Cons of hiring a mortgage broker

  • Most of the mortgage brokers work with a limited number of lenders, hence may be you may not get an idea of the range of loan products available in the market.
  • Not all brokers are qualified or experienced enough to provide you with a wide perspective of loans and the process involved. Hence, some amount of discretion is required while choosing one.
  • In some cases directly contacting lenders may be feasible and less time consuming than opting for a mortgage broker.

How to choose the right Mortgage Broker near me?

When selecting a mortgage broker to help you with your home loan or any other loan product, it is important to prioritize your interests by hiring one that is professional and honest.

Let’s understand what you need to watch out for while choosing a mortgage broker:

Does the mortgage broker value your interests?

While choosing a mortgage broker, it is important to research more about the way the broker works around clients. It is important to choose a broker who expects the same commission rate irrespective of which lender provides the loan or which loan product is chosen. A good mortgage broker is always open about his or her remuneration and referral fee if any.

Moreover, it is important to be on your guard that the mortgage broker isn’t making you opt for unnecessary loans or financial products.

Is the Mortgage Broker near me professional and qualified?

It is important that the Mortgage Broker has the necessary accreditations and certifications. It is crucial to check if the mortgage broker holds an Australian Credit License or Credit Representative status as required by the Australian Securities and Investments Commission (ASIC).

Just to be extra careful also find out if the mortgage broker is a member of the industry body – the Mortgage and Finance Association of Australia (MFAA). The MFAA imposes a strict code of conduct on members.

Does the mortgage broker offer clear and fair loan choices?

Ideally a good mortgage broker must provide a written list of loan product options clearly describing their interest rates, features, fee for availing loan, terms and conditions etc. In addition they must also make it clear why these options could suit your requirements and help your existing financial situation so that you make the right choice.

Moreover, professional mortgage brokers provide a range of lender options that include banks, non-bank organizations and financial societies. All of these options cited must be supplemented with valid reasoning as to how the loans can help your situation and must include a step by step guide from enquiry to settlement.

Will the mortgage broker’s loan assistance come at no extra cost?

Another aspect you need to affirm about before hiring a mortgage broker is that besides the normal lender application fees, will the Mortgage Broker charge you anything extra. If any further fee is charged, is there a clear explanation as to why it is being charged?

Moreover, it is important to note that although initially a mortgage broker might not charge anything but you may be charged some fees at the time of changing over from one loan product to another.

It is important to clear about all these aspects before choosing a Mortgage Broker for loan assistance. Ozweb Finance helps you avail a range of loan products easily and promises an honest and professional approach throughout the process of loan acquisition.