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    The 6 factors you need to consider

    Back in the day, prospective home buyers often turned exclusively to their bank for their home loan needs. If you were a first-time home buyer, it was normal to use the same bank as Mum and Dad to get your mortgage requirements sorted. However, these days there are a lot more options available with the growing presence of mortgage brokers. You don’t even need to leave your house to get a home loan, with many brokers offering their services online.

    One of the main reasons people are so fond of approaching banks for their mortgage needs is that they are usually familiar places. You’ve probably been with your bank since you were old enough to get an Eftpos card – and you trust them with your money. Mortgage brokers are a less familiar avenue – and with such a big financial decision ahead of you, you might be a little hesitant to take the path less travelled. The key is finding the right mortgage broker for your financial requirements. Doing that online without meeting in person can be a little tricky, so here’s what you need to know.

    The difference between mortgage brokers and banks

    For most people, borrowing money from a lender is a normal part of buying property. But here’s where banks and mortgage brokers are different.
    If you approach banks directly, they can only offer you their mortgage products – and any rate-negotiation sits firmly in your hands.

    Mortgage brokers will shop around, negotiate on your behalf, and present you with multiple mortgage options. They’ll assess your financial situation and recommend the best mortgage for your circumstances.

    A common misconception is that you’ll get a less favourable interest rate from your bank by going through a broker. But the reality is, a broker may be able to get you a better rate by negotiating with several loan providers.

    How to find the right online mortgage broker

    Assess their market knowledge

    The number one reason people use mortgage brokers is to gain access to their specialist knowledge of the wider mortgage market. Often, brokers are privy to exclusive deals not available on the open market or can leverage their relationship with mainstream banks to negotiate better interest rates on your behalf. Brokers are also a great option for non-traditional borrowers, i.e. those who are self-employed or who have a poor credit rating.

    But not all mortgage brokers will be the same, so it’s important to ask them what lenders they work with – both traditional – banks – and non-traditional. The more lenders brokers have a relationship with, the better your chances of getting the best deal. A good answer is at least five banks, but the more they cover the better for you. This will also give you a good idea of their level of expertise in mortgage lending.

    The focus is on your financial situation

    The whole point of using a mortgage broker is so you can find the best home loan deal for your financial situation. Good mortgage brokers will ask you lots of questions and use your financial information to hunt out and present you with the best-suited mortgage options. They should also explain which lenders will consider your application and which ones will not, based on your circumstances.

    They should offer you advice

    Good mortgage brokers won’t just present you with a list of suitable lenders, they should also offer professional advice to help you make an informed decision. Whether it’s fixed or floating interest, revolving credit or a 30-year term, it’s their job to give you the information you need to make the call.

    Ask for recommendations

    A quick Google search will inundate you with choice when it comes to picking a mortgage broker to work with. The best way to avoid getting lost in the detail is to look for good reviews. Ask family and friends for recommendations and read reviews online. You could also ask your real estate agent.

    Ask about fees

    The services of mortgage brokers should be free to you as a borrower. That’s because they get paid a commission by the bank when you take out a loan.
    Although mortgage brokers aren’t legally required to tell you how much commission they earn, it doesn’t hurt to clarify any potential charges – right from the beginning. Part of a mortgage broker’s job is to clearly explain any loan or administration fees you’ll need to pay to your lender of choice. This should be discussed from the outset, without waiting for you to ask.

    They do all the heavy lifting

    When it comes to applying for a loan, a mortgage broker will assist you with the entire application process, from pre-approval through to filling in any forms your preferred lender requires. A broker should also be willing to help you through the lifecycle of your mortgage if you need it.

    Shop around, ask questions, build trust

    Remember, you don’t need to go with the first broker you talk to, and you’re in no way obliged to use a mortgage broker that someone else recommends to you. That decision lies with you. Keep looking until you find someone you feel comfortable with and trust – even if you get halfway through the process and change your mind. If considering multiple brokers, let them know. Always ask questions before signing on the dotted line. And lastly, the more your broker knows about you, the better. Share as much personal and financial information as you can – it’ll pay off in the long run.

    To find out more about how Global Finance can help you with your mortgage requirements, talk to one of our brokers today.