There are too many things to learn, compare and decide on, from the best value for money property to the best home loan. On top of that, the stress of bidding in an auction or getting your offer accepted in a private sale is enough to frustrate any new buyers. It certainly doesn’t help with house prices on a steady rise due to the record low interest rate nowadays.
So, who do you call for help?
For most first-time buyers, it is advisable to engage the help of a mortgage broker – a good one. Finding a great mortgage broker is like having a seasoned mentor to guide you on a long journey. You’ll get up to speed quickly and make better decisions on your house hunting journey, which could take more than a year.
The basic job of a mortgage broker is as a middle man or woman between you and the bank. They help recommend a suitable home loan for you, broker a deal with the best rates, and do all the paperwork from start to finish. They don’t cost a cent as they get a commission from the loan that they help you obtain from the banks. Below are 5 different ways a mortgage broker will assist you with your goals.
1. Mortgage brokers are like a personal financial adviser
A good mortgage broker will sit down with you and listen to all your requirements, plans and assess your
financial situation to offer you the best advice. Some brokers are also certified financial planners, which
makes them fully qualified to advice on wealth building and retirement plans.
It’s never too early to chat to a broker as he or she can help figure out your maximum budget based on
your lifestyle and how much you should save for your home loan.
2. Mortgage brokers guide you through the home buying process
The home hunting process may take months or even years, especially if you won’t budge on your wish
list. The more flexible you are with your house checklist, the faster you will buy a home. There should be
a balance between your budget and your wish list.
Therefore, the hunt could turn out painful and grueling for some people, especially first-time buyers. It
is easy to get deflated after numerous rejection, so it’s crucial to have people who will support you.
A mortgage broker can assist you throughout the whole process from calculating your budget and
getting a loan pre-approved to hooking you up with lawyers and applying for your home loan. Usually,
all the paperwork is taken care of and you just need to sign on the dotted line.
Thus, they are indispensable for those buying their first home.
3. Mortgage brokers will search for the best home loans
Once you have won an auction or have your offer accepted, brokers will help you get the best home
loan based on your requirements and lifestyle. There are hundreds of loans to choose from, and each
comes with their own benefits and drawbacks.
A home loan with the right structure can help you save hundreds of thousands over the full course of
your loan. Because some lenders require you to call or chat face to face for more information, it’s best
to use a mortgage broker who can get this information for you easily.
4. Mortgage brokers will negotiate the best rates with the banks
When it comes to interest rates, there’s room for negotiation with lenders. If you have a good credit
score, you will have more bargaining power as more banks are willing to offer you a loan due to your
reputable credit history. It is beneficial to use mortgage brokers, who are experienced in bargaining with
Before buying a home, think of ways where you can improve your credit score. Try increasing your
income by generating passive income or doing side work. Another way is to reduce the debt you have,
decrease the credit limit of your credit cards or cancel the cards.
5. Mortgage brokers will grow with your needs
The relationship doesn’t end after buying your first home. Mortgage brokers can assist you with
refinancing when the current mortgage just won’t cut it. They can recommend you a better home loan
rate or home loan structure when your needs or income changes, especially if you’ve lost a job or have
switched to part time work.
Refinancing is also good for when you need to renovate or require extra cash. It’s also handy to use
mortgage brokers if you want to dabble in real estate investment, including loans for commercial
properties and SMSF loans.
However, some brokers may not offer neutral advice because they are affiliated with one bank and
receive higher commission from them compared to other banks. This may not be an issue if you are
getting the lowest interest rate as they often receive special discount from their affiliated bank.
But be careful if a broker ignores your requests and keeps trying to sign you up with one bank. Although
it seldom happens, remember that at the end of the day, you are the one taking on the loan.
Generally, it pays in the long run to find a good mortgage broker. Like finding a good real estate agent, it
is important to keep looking for a mortgage broker who can get along well with you and work for a long
Ask your friends or colleagues and they may be able to recommend a good one from word of mouth.
Research online and chat to a few before deciding who to work with. Always remember that a good
broker will be your biggest asset in real estate and wealth building.