Why should you use a finance broker?
Not too long ago when there were only a few banks in Australia, people approached their bank in person (cap in hand) to apply for a home loan. In today’s home loan marketplace, there are many lenders – including banks, building societies and credit unions – and each of them have a range of different loan products with different interest rates, honeymoon periods, offsets and other various bells and whistles. It can be hard to know whether you should be talking to one lending institution or the other, and which loan is right for you.
The role of the mortgage broker is to act as an intermediary between a borrower and a lender. They will usually be familiar with the different loan products of many lenders (sometimes dozens of them), using them to help you sort through the myriad of loan products available in the market will save you time and money as the mortgage broker can offer their experience and knowledge of lenders’ underwriting procedures to make your application as straightforward and successful as possible.
In addition, your mortgage broker can reduce the number of loan applications you make. When you make a loan application, the lender’s query into your credit history is recorded, and although it is not widely known, too many of these queries can cause raised eyebrows among many lenders. Using a mortgage broker narrows the field of loans you apply for and your mortgage broker should have an idea of the likelihood of approval for your application.
Different loans are suitable for different purposes, and your mortgage broker will be able to find loan products that are best suited to your individual financial circumstances, your goals and the property you want to buy.
Seek out a good mortgage broker before you start making offers on properties, so you can get your financial details and paperwork ready early. As with any person providing assistance with your finances, find someone who is reputable, experienced and whom you like and trust. Be aware that a mortgage broker is paid a commission by the lender when the loan is issued and that some lenders pay better commissions than others – therefore make sure your mortgage broker is recommending your loan based on your best interests, not the best commission for them. If you can find a mortgage broker who fits all of these criteria, he or she will be a valuable resource.
Finance Broking Services are provided by Momentum Wealth Finance Pty Ltd.
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