Oct 25, 2017 10:34:00 AM

Working with a mortgage broker

Topics: Australia Property, Australia Real Estate, first home buyer, buying property, Second Home, finance health check, mortgage stress 0

In Australia, more than half of all home loans are written by mortgage brokers, while over 80 per cent of property investors choose to work with a mortgage broker, according to the September 2017 PIPA Annual Investor Sentiment Survey. Read on to find out how mortgage brokers are making a difference when it comes to securing the preferred home loan, and learn our tips for choosing a mortgage broker.

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Demand for mortgage brokers is on the rise

Over the past 12 months (Sep 2016 – Sep 2017), the demand for mortgage brokers has risen steeply. Property investors in particular who face ongoing regulatory changes and tighter lending conditions are choosing to partner with a mortgage broker.

APRA’s recently introduced limit on interest-only lending, typically the preferred loan for many property investors, has seen mortgage brokers playing an increasingly important role in the investment mortgage market.

Results from the 2017 PIPA Annual Investor Sentiment Survey released earlier in September 2017, show that 83 per cent of property investors intend to finance their next loan through a broker, while over 73 per cent said they had secured their last investment loan through a broker. 

As the mortgage market becomes increasingly complex, with lenders making ongoing changes to policy and pricing, it’s more important than ever to work with an expert.

Adhere to higher education and ethical standards

Acting as an intermediary between lenders and borrowers, mortgage brokers leverage their industry knowledge, resources and networks to help their clients find a home loan to suit their personal and financial situation.

Along with researching, helping to interpret and negotiate different mortgage products, mortgage brokers offer recommendations and facilitate a smooth transaction for the borrower.

As members of MFAA and the Finance Brokers Association of Australia (FBAA), mortgage brokers are required to adhere to higher education standards and ethical standards aligned to government requirements.

Mortgage broker checklist

When choosing a mortgage broker there are a number of things you can check first before deciding which broker to work with. We’ve outlined a checklist below: 

  • Is your broker accredited and registered with the Australian Securities and Investments Commissions (ASIC) and current Credit Representative details disclosed?
  • Does your broker belong to a reputable industry association such as the Mortgage and Finance Association of Australia (MFAA) or FBAA) and the Credit Ombudsman Service (COSL)?
  • How many lenders and which lenders does your broker work with?
  • How does your broker go about finding the preferred deal for you?

Demystifying the home loan puzzle

When you think about the complex choice of home loans available to borrowers, it’s not surprising that so many borrowers are choosing to partner with a mortgage broker. If you need help demystifying the home loan puzzle, get in touch with a Mortgage Express broker to talk about your specific financial needs.

References:

https://www.theadviser.com.au/breaking-news/36813-broker-demand-soars-amid-credit-crackdown?utm_source=TheAdviser&utm_campaign=28_09_17&utm_medium=email&utm_content=1

https://www.theadviser.com.au/breaking-news/36812-brokers-have-important-role-in-mortgage-market-says-cba

https://www.choice.com.au/money/property/buying/articles/mortgage-brokers


Disclaimer:

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Credit Ombudsman Services Ltd (COSL) | Member of Choice Aggregation Services.