Well-qualified buyers are finding it increasingly difficult to finance a home, especially in the case of conventional first mortgages.
It should come as no surprise that Best Mortgage Broker in Melbourne play such an integral role in the process for many people. The reason is that they understand financing like few others do and can also be counted on to offer personalized service rather than offering the blanket rates that most banks advertise. With this article, we will discuss some of the benefits of using a broker and why you should consider it if buying a home is your goal.
When considering prospective mortgage brokers, a key factor in their commission – after all, they make their money by generating loans and earning fees from them. This means there is significant potential for conflict of interest; brokers may offer loan products that come with a high commission but carry with them a few of the features you would like as a borrower. For example, they might steer you to a lender offering a higher rate in return for a larger commission — this strategy may not protect your interests.
A more conscientious broker will compare multiple lenders and offer unbiased advice, perhaps even suggesting lower-commission options that also fit your needs better. The key thing is knowing how to identify a good broker from one more interested in lining their pockets than serving you.
In Australia, there are two types of mortgage brokers: non-correspondent and correspondent. These terms refer to the relationships each has with banks and other financial institutions – non-correspondents do not have access directly to wholesale markets and have to go through correspondents. On the other hand, correspondent brokers have direct access to wholesale markets and can offer the lowest rates available at a given moment in time.
In any event, even if a prospective mortgage broker has direct access to wholesale lending rates, they may not be able to pass them along – this is because of mutual exclusivity arrangements between banks and mortgage brokers. Such arrangements cover both buying and selling loans; for example, a broker might not be able to sell you a home loan from one bank while selling another person from that same bank a different loan or assisting someone else with refinancing their existing home loan.
A good way to find the Best Mortgage Broker in Melbourne is to seek referrals from family members, friends, and colleagues who’ve had good experiences through a specific broker. The more referrals, the better — these include both those who defaulted on their loans as well as those who repaid them successfully. You can also perform online research about an individual or firm’s reputation.
Finally, consider getting at least three quotes from prospective brokers before making your final decision. This will allow you to compare the rates and services of different brokers against one another. It may seem like extra work, but it could save you thousands in the long run by allowing you to lock down the best loan with minimal effort and cost.