Getting a foot in the door of your dream home might be getting harder, but talking to a mortgage broker could get you the keys more quickly.
Purchasing a property in today’s housing market is not for the faint-hearted. Would-be homebuyers have only to turn on their TV – or check Facebook or Twitter – for the latest news informing them that their dream home is slipping further out of reach.
When you add in the challenge of sourcing the right loan, first homebuyers can be forgiven for thinking twice about taking that first step on the property ladder. But the truth is, it’s not quite as hard as you think.
Research has shown that mortgage brokers are helping buyers with over 50 per cent of all new housing loans in Australia, and for good reason – buyers know that brokers can provide a level of advice that banks simply can’t.
If you feel like the door to your perfect home is permanently locked, here are five keys brokers could be holding.
Choices, not ultimatums
Brokers have a direct line to a large panel of quality lenders, so they can crunch the numbers and give buyers a comparison of the best interest rates and products available from that panel.
The panel is likely to include the four major banks – NAB, Commonwealth Bank, Westpac and ANZ – though brokers can also take the pulse of highly competitive regional and second-tier lenders, as well as niche lenders that might suit borrowers like the self-employed. Brokers have a deep understanding of the products available to borrowers and can offer sound advice on your home loan options.
While your lender is likely to do everything possible to accommodate an application, they won’t recommend a competitor down the road. It’s always best to shop around.
Answers, not questions
Mortgage brokers are steeped in product developments and trends, and can make sure borrowers are asking themselves the right questions at the right times.
Whether it’s considering the advantages of a fixed, variable or split home loan; making sure borrowers have an offset account; or what a good rate discount looks like at any given time, brokers can put their knowledge to work for borrowers.
Real-time experience with multiple lenders can also give brokers insight into things that are important during and after settlement, such as bank service levels.
Service, not sleeplessness
Brokers are human beings that borrowers can talk to face to face and who will often come to their homes or answer their urgent calls, even after work hours.
They also do the tiresome legwork of ensuring application and loan paperwork is processed efficiently and can speak to the right people if something goes wrong.
Savings, not costs
Brokers advocate for borrowers to save them money over the life of their loan. They may be able to source more competitive interest rates while using their relationships to negotiate rate discounts or other benefits, such as fee waivers.
A broker may also help borrowers stay on top of any penalties, fees or other hidden charges or costs that might negatively impact a prospective borrower.
Reality and dreams
Optimistic first-time borrowers often approach a bank or broker wanting to borrow too much. Part of a broker’s job is to give these borrowers a helpful reality check. Lenders also have to adhere to the ASIC responsible lending obligations, meaning they will only let you borrow an amount that you have the ability to pay back.
As part of the loan-application process, mortgage brokers often sit borrowers down to ask a range of lifestyle-related questions, as well as to assess the basics of income.
By breaking down the mortgage with the borrower into monthly and weekly chunks and comparing them with lifestyle expectations, brokers can help borrowers adjust their expectations – before they find themselves sacrificing their lifestyle.
Buying a property is the biggest financial decision most people will make in their lives, and that decision is only getting harder.
The last thing homebuyers need is the added hassle of applying for a loan without the knowledge, experience and service of someone who does it every day. When you know someone has the keys, wouldn’t it be best to use them?
Contact your broker today for more information about how they can help you get your foot in the property door.
Observations on the value of mortgage broking, Ernst & Young, prepared for the MFAA in May 2015: https://www.mfaa.com.au/IndustryInformation/Documents/1527742_MFAA_Broker%2020Study_final_email.pdf