Mortgage Broker
In theory, a mortgage broker will look at your circumstances and research various loans from different lenders to find the most suitable loan for you.
They may even be able to arrange special deals. Although most brokers have access to a large number of lenders, many only use a limited range of loans.
As a broker is paid a commission from the lender, they are actually working for the lender. They are drumming up business for the lender. A broker is not even obligated to find you the best deal.
If you only use a broker, you may miss out on the cheapest loans in the market as these are quite often offered by lenders that don’t pay commissions This does not mean don’t use them, it just means you will need to do your homework to find a good broker.
Some tips when using a mortgage broker include:
- Research the type of loan, the current interest rates and fees you would have to pay
- Contact 2-3 mortgage brokers and find out what they think is the best option for you.
- Compare the mortgage brokers’ options to your own research.
Large loans – the more you borrow the more commission the broker earns. Always make sure you can afford the repayments, even if interest rates increase and still have enough left over for other living and recreational expenses.
Refinancing – check what your current lender will offer you and compare this to any new offer. Make sure you find out what all the costs will be including what your old lender will charge you to break the loan.
Upfront fee – never pay a broker an upfront fee to arrange a loan. Even if your financial situation is too difficult or unusual for most lenders.
Lenders
All major lenders' websites have home loan calculators. These can provide you with your estimated borrowing capacity.
By going direct to the lender, you will only be provided with advice on their range of products.
You are able to search for the cheapest loan, assuming you know the loan type, by referring to the following website - www.cannex.com.au.
This is an independent service that provides up to date research on loans that are available in the market place. Most industry professionals refer to this site.
