How many ways can you buy a car?
For many Australians, buying a home is a priority, yet housing affordability is a pressing concern. Generation Y, in particular, is faced with high further education fees and a lack of suitable employment. In some areas, most notably Sydney, property prices far outstrip median income. Government advice to “just get a good job” is not exactly helpful, but it’s not all bad news.
The Reserve Bank of Australia elected to maintain its 1.5% cash rate in April and lending conditions are strong. With interest rates so low, now is a good time to buy, especially if you are looking at purchasing an apartment. Housing hotspots such as Sydney and Melbourne may be out of reach to all but the very rich, but there are more affordable areas in Western Australia, Queensland, and Victoria.
Most Australians need financial services when buying a home and statistics show that just over half of them use a mortgage broker rather than approaching a lender directly. This is a sensible strategy, as they will offer a number of key benefits. Here are 11 reasons why a mortgage broker should be your new best friend if you are looking to purchase a property.
Qualified Advice
Mortgage brokers are good at what they do. They have a lot of experience in giving mortgage advice and they know the market inside out. They are also qualified to give you professional advice, which is important when you have such an important decision to make.
It is a very different story if you call up a lender and ask which products they recommend. Whilst they can give you a summary of the products on offer, they can’t offer any advice on whether these products are right for you. You could ask Google, but Google isn’t an expert either.
Tailored Advice
No two borrowers are the same. A mortgage advisor listens to what you want and offers you advice based on your personal circumstances. It is their job to tell you if you are trying to borrow more than you can afford or the products you are interested in are not right for you. They are on your side, so listen carefully to what they say.
Free Advice
Mortgage brokers don’t charge for their advice. Instead, they are paid a commission from the lender. It is in their best interest to find you the right deal. If the lender refuses your mortgage application, the mortgage broker has worked for nothing.
Extra Protection
Mortgage brokers are highly regulated by the Australian Securities and Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA) and Credit and Investment Ombudsman (CIO) . When you use a mortgage broker, you can expect to receive professional advice.
Broader Range of Mortgage Products
There are many mortgage products out there that are unavailable to Joe Public. Mortgage brokers work with a huge network of lenders, including specialist lenders. This gives you far more choice when looking for the right home loan. You also have access to better rates and deals.
Industry Experts
Would you rather speak to someone who is only authorised to offer products from one lender, or an advisor who has access to the entire market? Independent mortgage advisors know the industry extremely well. They are privy to the latest market developments and if there are new products in the pipeline, they will be the first to know.
The lending market has tightened up in recent years, with lenders keen to avoid any debt bubbles. Mortgage brokers deal with mortgage lenders on a daily basis, so they know which lenders to approach based on your personal finances. Their inside knowledge could save you a lot of time and wasted effort.
A One-Stop Shop
Most buyers need more than a mortgage when they come to purchase a property. You will probably need house insurance, income protection insurance, and potentially investment products to fund an interest-only mortgage. An experienced mortgage advisor can advise you on extra products such as insurance policies and, if appropriate, help you connect with the right companies.
A Stress-Free Experience
Buying a property can be a stressful experience. There is a lot to think about, but securing mortgage finance is right up there at the top of the list when it comes to stress.
In the first instance, you have no idea whether a lender will give you a mortgage, and secondly, you will be concerned about whether your income is enough to cover a mortgage for your dream home.
A mortgage broker takes a lot of the stress out of the equation. Their job is to deal with lenders on your behalf, so it’s one less job on your ‘to-do’ list. A mortgage broker will find products for you, fill in the paperwork, and answer any questions the lender has. If a lender turns you down, they will start the process all over again. All you have to do is provide the information they need and sign the paperwork.
No Fees
There are no upfront fees when you use a mortgage broker. Buying a home is expensive enough without paying for professional mortgage advice. It has probably taken you years to save up for a home deposit, so the last thing you need is another bill.
Because mortgage brokers don’t charge, their advice is unbiased. They only get paid if they find the right product for you, so if you aren’t happy with their service or you want to try a different broker, you are free to walk away.
Speedy Mortgage Applications
Filling in a mortgage application form is a tedious process and lenders what to know everything from how much you earn to how much you spend on entertainment in an average month. It can take ages to fill out a form, and even longer for a lending decision. At least it does if you go it alone.
Mortgage brokers have access to a fast-track mortgage application system. They can skip the queues and have a lending decision for you in record time. Lenders would rather deal with a professional mortgage broker than an individual, as there is less time wasting. If you need a quick decision, it is better to use a mortgage broker.
Specialist Home Loans
Are you looking for a specialist mortgage product? If so, your best bet is to make an appointment with an experienced mortgage broker.
There are hundreds of different mortgage products available, but many of them are not on offer to the general public. Mortgage brokers have access to specialist products from niche lenders, so if you have borrowing requirements that are a little out of the ordinary, speak to a specialist mortgage broker.
Buying a home is likely to be the biggest purchase you will ever make. A mortgage broker will help you maximise your money and find the right product for your personal situation. You would be reckless not to listen to their good advice.
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