Applying for a mortgage can be one of the scariest yet most exciting times in your life. There is a good chance this will be the most expensive- or at least close to-purchase you will ever make. So, naturally, you want to deal with someone who knows what they are doing, has your best interests in mind, and can make you feel comfortable and well informed when it comes to your finances.
So what exactly is a mortgage broker?
A mortgage broker is a third party, licensed professional, whose job is to find the best possible mortgage rate for you that they can. They differ from a bank in that banks are only able to sell their own products. Mortgage brokers, however, have access to a much wider variety of financial institutions and resources.
If you live in Melbourne, Australia and you are searching for a mortgage broker to help you, feel free to check out Blutin Finance who will be able to help you secure a mortgage or business loan.
How will a mortgage broker help me?
Not only are they able to focus on your financial situation, but they can also help you to both set and achieve your goals. This takes a little groundwork first as a broker will not know your financial background as well as a bank that you have been dealing with for years can. They will most likely need to go through all of your finances including:
- Credit score
- What you can afford
One of the biggest jobs is for a broker to find all of the financing options available to you and explain them in a way you can understand. You don’t want to dive into the most expensive purchase of your life with unanswered questions about financing. This can include rates, the amortization period, and the length in which you want to pay off the mortgage.
You need to ask yourself, do you want to pay a higher amount each month to pay off the mortgage quicker? Would you rather extend it as long as you can? Your broker should go through all of these options with you and be able to give you the difference in the payments as well as the interest you will save.
Your broker will get you set up so that you are pre-approved for a mortgage and are aware of what you can afford. This can save a lot of heartbreak when looking at new homes as you can avoid looking at any out of your price range and risk falling in love with them.
Once you are ready to purchase that home, they will complete the loan application for you to ensure it is error-free.
So how do I know which one is right for me?
You may need to do your research and evaluate more than one to find someone that best meets your needs. Check out references. Have other people had good experiences with the broker you are considering?
Next, you’ll want to have a face to face meeting with any potentials that you are considering. Make sure to start with an open and frank discussion. You won’t be able to tell if this one can best help you if there are finances that you want to keep hidden or are uncomfortable talking about. Remember, this is a licensed professional. This is his or her job. Any dishonesty will eventually come up when they start to do the required digging.
Another important thing to do is to ask any questions you deem to be of importance. It’s best to prepare this in advance so that you don’t blank out on the spot and wake up in the middle of the night wishing you’d thought to ask this, that, or the next thing.
A few things to consider asking are:
- The fees the broker charges
- What potential lenders that they deal with
- What are the most competitive rates at the moment
- What are the chances of qualifying for the best rates
- How large should my down payment be
- What are the hidden costs
- What is the difference between a variable, fixed open or closed mortgage
- What information do I need to have on hand for my application
What happens now that I`ve decided on my broker?
Your chosen broker should be able to provide you with a pre-approval and a price range in which you should be looking for your new home. To do this they`ll need to go through that dreaded process of pulling your credit history and finding out if you have any outstanding debt that needs to be dealt with beforehand.
Once this is complete they can start doing their research into finding the lender that will offer you the lowest possible rate. Since they have such a large network that they deal with as opposed to banks who only deal with themselves, this may take a little longer but don`t worry! You won`t be waiting too long to hear back.
Another added benefit of a mortgage broker is that they don`t get paid unless the loan is approved. This means that they want to work as hard and as fast as they can to ensure that you are satisfied and that the loan works out in your favor.
Depending on which one you are dealing with, some you won`t need to pay at all. There are plenty of brokers out there that get paid through the company lending the money for bringing in business, not the applicant. This means that all of these services could be offered to you with no additional charge.
While there are still a lot of factors that need to be considered when choosing a mortgage broker, there are a great deal of benefits as well. If you are in need of someone attentive to do all of the legwork for you, but that also provides a wide range of networks, then you have the right idea by looking for a broker.
While going to the banks directly will still offer the benefit of having someone more aware of your financial situation, there is a better guarantee of the best rate available if you choose to go the route of a mortgage broker instead.