Your Ultimate Introduction to Mortgage Brokers
Mortgage brokers, home loan agents and interest rate comparison experts are typically all one and the same. In most cases, they act as somewhat of a ‘middle-man’ between you (as a borrower) and the lender. They collate information, compare interest rates and perform application-related tasks to help their clients secure the right type of loan for their needs.
Do mortgage brokers charge?
Yes and no. Yes, if they work independently and outside of the commission-based protocols offered by banks. No, if they work with specific lenders that pay them commission each time they bring a new borrower on board.
What is a mortgage broker job description?
In a nutshell, there are two specific descriptions for these types of home loan specialists. The first relates to independent brokers that offer mortgage comparison services at a cost. The second relates to commission-based agents that charge the bank a percentage of your loan if you sign up to a fresh mortgage. Roughly 35% of all new mortgages were handled by brokers in 2008 alone.
What are independent mortgage brokers exactly?
Generally speaking, an independent agent is anyone that works outside of the rules and regulations of an entity. In this case, an independent brokering agent could be considered an unbiased third party that simply wants to connect their client to the ideal home loan for their needs. Most brokers will have access to a whopping 90% of home loan options on the market – roughly 70% more than the average home loan applicant.
How can you find a mortgage broker?
It’s pretty simple really; especially if you don’t mind searching online for a reputable agent or agency. Just a quick search for ‘mortgage broker near me’ should present you with the most relevant options in your area.
Are mortgage brokers better than banks?
Brokers don’t lend money – they find banks that do and then look for the cheapest options available to you as a borrower. A mortgage broker definition is of a professional that compares a range of different options to help a borrower out.
The Common Duties of a Mortgage Broker
What is the responsibility of a mortgage broker?
That will depend on what you need them for. If you are a first time home buyer then your broker could help you to find a cheap mortgage. If you’re refinancing your mortgage, they could help you to arrange a more affordable replacement.
What does a mortgage broker do for you?
A broker will compare interest rates, they take a closer look at the terms and conditions proposed by lenders and they help you to organise your thoughts and go for the right mortgage.
What is the difference between a mortgage loan officer and a mortgage broker?
A loan officer is someone that works for and inside of a bank – and often in their best interests. A home loan broker on the other hand is someone that works for their client, in their best interests instead.
What is the job of a mortgage consultant?
Some brokers work as comparison experts and information providers. The latter would be known as a mortgage consultant and it’s their job to offer advice and guidance when it comes to choosing the right home loan.
Mortgage broker skills required to provide their services
Most brokers will pursue qualifications in financing and business management whilst obtaining experience within the financial industry. With this knowledge they should be able to provide an insider’s approach to all things loan-related.
Finance broker qualifications
The majority of brokers will attempt to obtain as much knowledge and experience in the field to ensure that they can offer a well-rounded service to their clients. Some even go as far as to pursue qualifications to really maximise their skillset.
What skills do you need to be a mortgage broker?
Generally speaking a talent for numbers, an ability to negotiate and a range of skills in customer care, support and research.
What is the Difference between a Mortgage Broker and a Bank Loan Officer?
What is the difference between a mortgage broker and a loan officer?
In a nutshell, a broker is someone that compares different financial options for their clients. A loan officer works for a lender and handles the application of a borrower.
What is the difference between a mortgage broker and a mortgage loan officer?
All loan officers (whether they work in the home loans department, the refinancing sector, or the first time borrower circuit) work for their employer; a bank. A loan officer definition is an employee of the bank that collates information about an application and forwards it to their superiors for a ruling on whether they will lend to you or not. Home loan brokers on the other hand work for you.
How is a mortgage bank different from a mortgage broker?
A bank offering mortgages is the lender that could provide you with the money to buy your home. A broker is the person that strives to ensure that you sign up to the right deal on the table.
What can a mortgage broker do for me?
Plenty! They can compare interest rates and specific terms and conditions, as well as negotiate fairer options with a lender and even help you to manage your application. Most work in a mortgage office, but plenty offer online mortgage brokering services instead.
What Are a Mortgage Broker’s Fees?
How much should I pay a mortgage broker?
That depends on what they are doing for you. If they are independent, they could charge anywhere between a few hundred and a couple of thousand dollars. Commission-based brokers typically receive a trailing fee of 0.165%, as well as a one off payment of 0.66% in Australia.
Do all mortgage advisors charge a fee?
Not always – especially if they are commission-based and work closely with lenders. These experts will often receive a lump sum from the bank, instead of charging their clients. There are roughly 1800 loan types on the Australian market and although a broker won’t compare all of them, they should aim to get to grips with a few dozen (according to research).
Do you pay for a mortgage broker or not?
That depends. If you want an independent service then you might need to. If you don’t mind an agent that might have a bank they’d like to get you on board with, there shouldn’t be a fee. Most trailing commission will go on for between 20-30 years, offering a substantial appeal to brokers; do be sure to make them work as hard as possible for your investment.
What does a mortgage broker do for you?
Most offer a variety of services; from helping you to work out what you can afford to borrow, right through to comparing interest rates and assisting with your application. Many will also utilise a mortgage fees calculator to help you to see how much you should expect to pay in expenses. Who pays mortgage broker fees will depend on the type of expert that you hire.
Mortgage broker fees explained
All fees are based on a mortgage broker commission structure. Some will request payment from you in a predefined sum for their services. Others won’t charge you a thing, but will invoice a bank for connecting you with their services. A small mortgage valuation fee might be chargeable by commission-based lenders to secure their earnings, even if you don’t go ahead with the home loan.
How to Choose the Right Mortgage Broker
How do you choose a mortgage lender?
You could search online, compare different providers and then get in touch with one that piques your interest.
How do you compare mortgage lenders?
On the other hand, comparing banks and their deals can be quite technical. This is when a broker might come in useful!
What can a mortgage broker do for me?
They can address the technical issues, they can compare the pros and cons of a home loan and they can report back to you with their findings for your decision. A good way to learn more is to talk to a mortgage broker.
What is a mortgage lender?
In the simplest terms, these are banks that might consider lending you money in the form of a mortgage.
What to look for mortgage broker-wise
Financial expertise, access to a range of lending companies and a willingness to help – they are three of the most important factors to consider. It’s also important that they are a member of the MFAA and adhere to the Code of Practice put forward by the Mortgage & Finance Association of Australia.
How can I find a good mortgage broker?
A great place to start is online. Talking to a mortgage broker is easy via phone or email – and you should be able to find a good mortgage broker by spending a little time searching. Mortgage broker selection doesn’t have to be difficult and once you make a decision, you should feel much more comfortable when deciding what to tell a mortgage broker to get your home loan application underway.
Knowing What to Ask a Mortgage Broker
Questions to ask a mortgage broker – first time home buyer
If you’re a new home buyer you might be keen to learn about the application process, the way that deposits work and how you can maximise your chances of being approved on a home loan.
Questions to ask a mortgage broker – Australia
In Melbourne specifically (but also throughout Australia), most brokers are governed by national legislation and should be members of the Mortgage & Finance Association of Australia (MFAA).
Mortgage broker interview questions
If you’d prefer to take your time when deciding on a mortgage brokering agency, be sure to ask them how long they’ve been in service, what they offer to their clients and whether they work independently or not.
Questions to ask mortgage advisor agents
Advisors can be full of information and if you’re keen to learn as much as possible, don’t hold back on your questions; it’s their job to answer them for you to the best of their ability. They can offer plenty of mortgage loan questions and answers, as well as information on what to look for mortgage broker-wise.
Questions to ask a mortgage lender when refinancing
If you decide to cut to the chase and find a lender yourself, then be sure to ask them about the types of loans that they offer, their flexibility and how you could improve your chances of approval.
And Lastly, Should I Use a Mortgage Broker in the First Place?
Are mortgage companies better than banks?
If you want to save yourself money and sign up to the ideal home loan for your needs, then yes.
What is the purpose of a mortgage broker?
To connect their clients with the cheapest or most affordable borrowing options made available by lenders and banks.
Do mortgage brokers charge?
If they are independent and work outside of banks, then yes. If they receive loan commission from banks, then it won’t be your job to pay them.
What does a mortgage broker do for you?
In a general sense they assist in finding the ideal borrowing solution to help you to finance your home purchase, whilst saving you money on cheaper repayments over the years. They can also help with mortgage refinancing and securing loans for first time and repeat borrowers and investors.
Tell me more about independent mortgage brokers
Sure! They work outside of banks, are unbiased and won’t promote a particular lender in exchange for a larger commission.
Why do you need a mortgage broker?
You don’t – if you are okay with handling technical tasks, feeling ridiculously stressed and having to deal with faceless banks that just want your money.
What are the benefits of using a mortgage broker?
You could minimise your stress, have your application handled by an expert and enter an agreement knowing that you’ve opted for the most suitable deal available, to name just a few advantages.
Why use a mortgage broker instead of a bank?
It’s simple, really. If you want to save money on a home loan then hire someone whose job it is to ensure that you find the most affordable borrowing option on the market. If you don’t mind extra fees and paying more over the years, then a bank may well be the way to go.