What Does A Mortgage Broker Do?

Ever wondered what a Mortgage Broker does, or looking to engage one? Today we're looking at why working with a local Melbourne brokers matters, and the benefits over banks.

Are you thinking about buying a house in Melbourne or refinancing your existing mortgage? 

Did you know that in 2023, around 70% of Australians used a mortgage broker instead of going straight to a financial institution like a bank?

As a team of Melbourne Mortgage Brokers, we always aim to simplify the home loan process for you. Whether you're purchasing a new home, refinancing an investment property, or refinancing your existing mortgage, understanding what a mortgage broker does and how they can benefit you is crucial. 

Let's dive into what a mortgage broker does and how they help you.

What Does a Mortgage Broker Do?

A mortgage broker like us here at Jacob Decru Mortgage Broker serves as a financial intermediary for your loan application, connecting you with potential lenders. We specialise in finding the best mortgage options and mortgage terms tailored to your specific needs and lifestyle. 

Here's what you can expect from a mortgage broker:

• Financial Intermediary: A mortgage broker doesn't use their own funds but works with a network of lenders to find the right fit for you. At Jacob Decru mortgage brokers, we work with over 60 lenders.
• Make Your Life Easier: Our job is to match you with the Australian lenders that offer suitable loan terms, assist you in the application process, and gather the necessary paperwork for underwriting and approval. We also look at your financial circumstances and goals over the entire loan journey.
• Expertise and Access: Mortgage brokers save you time and effort by leveraging their expertise and access to multiple lenders.

What Are The Benefits of Working with a Mortgage Broker?

Working with a mortgage broker offers several advantages of going directly to a bank:

• Potential Cost Savings: Mortgage brokers like us often save our clients thousands over the term of a loan. We can potentially secure better interest rates and fee waivers, saving you money over the life of your loan journey.
• Access to Lenders: We have access to over 60 lenders, all under one roof. It's this access to lenders that banks can not provide; they can only offer their own products, which might not provide the most suitable home loan options.
• Personalised Assistance: Brokers offer guidance and support throughout the application process, from understanding your credit score for pre-approval to settlement, all without any upfront commission. We only get paid when you choose the loan you want, and the lender pays us.

How Do Mortgage Brokers Help The Process?

Mortgage brokers facilitate the mortgage application process by:

• Assessing Your Financial Situation: Brokers like the team here evaluate your financial situation to match you with suitable lenders and the right type of loans for your needs. Our clients who have tried this alone have all reported that it's an overwhelming process - yet we do it day in and day out.
• Loan Comparison: Brokers like us help you compare loan product options and mortgage terms, including the monthly payments you might be looking at.
• Application Process: We help guide you through the application process and gather the necessary documentation.
• Negotiating with Lenders: Mortgage brokers negotiate with lenders on your behalf to secure favourable loan terms and conditions. We have an understanding of the ever-changing mortgage market and access to mortgage products that you might not have directly.
• Saving Time and Energy: Going directly to multiple lenders like banks, credit unions, etc. and comparing their offers can be time-consuming and exhausting. Mortgage brokers do the legwork for you, saving you time and energy.
• Objective Advice: Brokers are unbiased and provide objective advice based on your specific needs and financial situation. They have a thorough understanding of the mortgage market and can guide you to the best loan options available to you.
• Guidance During the Underwriting Process: Once your loan application is submitted, a mortgage broker will help navigate the underwriting process. They can address any questions or concerns that arise and ensure a smooth process leading up to loan approval.
• Post-Approval Support: Even after your loan is approved, a mortgage broker continues to provide support. They can assist with any post-settlement issues or changes you may need, such as refinancing or adjusting your loan terms.
• Negotiation: Brokers negotiate on your behalf to secure the best possible mortgage terms and mortgage deals as we intimately know how the lenders work.

Mortgage Brokers vs. Loan Officers

While both professionals assist in obtaining home loans, there are some key differences to be aware of:

• Mortgage Broker: Works as an intermediary with access to multiple lenders, offering a variety of loan options and providing expert advice and market knowledge. Mortgage Brokers also guide you through the entire mortgage process, compare numerous lenders and work around your goals, even if it's a complex situation, like if you're self-employed.
• Loan Officer: Works directly for a single institution like a significant bank, providing options from their institution only. In other words, they will not help you compare lenders or loan rates, as they are only their own.

Can I Get a Home Loan Without a Mortgage Broker?

Yes, it's possible, and you can go directly to a bank, but finding a home loan on your own can be challenging as you really need to talk to a lot of lenders to get a great rate and leading market conditions. That's where mortgage brokers simplify the process by doing the legwork for you and providing you with immense industry experience to match you with lenders that suit your needs.

Importance of Due Diligence

When considering a mortgage broker, it's essential to research their track record, credentials, and industry reputation. Look for:

• Licensing and accreditations: Ensure they are licensed and check for any disciplinary actions or complaints. 
• Client Reviews: Read reviews and testimonials from past clients. Google is a great place to start. You can find ours here.
• Transparency: Ask about their commission structure and any financial incentives tied to specific lenders.
• Financial Advice: Great mortgage brokers are basically financial advisors when it comes to day-to-day costs and managing a home loan. Ask your chosen mortgage broker the easy and hard questions.

Conclusion

In summary, mortgage brokers play a crucial role in simplifying the home loan process. While it is possible to obtain a home loan without their assistance, their expertise and access to a wide range of lenders can be invaluable. Consider the advantages and disadvantages before making a decision, and choose the option that aligns best with your needs and circumstances.

FAQs

What does a mortgage broker do?

A mortgage broker connects borrowers with lenders to obtain the best mortgage terms.

How do mortgage brokers work?

They serve as intermediaries, presenting loan options from various lenders to borrowers and gathering financial information for the application process.

What are the advantages of using a mortgage broker?

Access to multiple lenders, assistance with the application process, and potential cost savings.

Can I get a home loan without a mortgage broker?

Yes, but finding a home loan on your own can be challenging.

Do mortgage brokers have conflicts of interest?

There is potential for conflicts, but transparency and trustworthiness can mitigate them.

What is the role of a mortgage broker?

They connect borrowers with lenders, assist in loan comparisons, and guide borrowers through the application process.

In conclusion, mortgage brokers offer valuable services that can simplify the home loan process and potentially save you a lot of money over the term of your home loan and even on future property goals, such as an investment property. 

If you need help, give Jacob Decru and his team a call at 0423 713 362. We're here to help.