For most people looking to buy a property, be it their own home or an investment purchase, it’s more likely than not that they will need to take out a mortgage to achieve their ownership goal.
This means that potential buyers will face an early decision in their ownership journey – and perhaps one they should make before they even decide on the property they want to purchase: should they use a mortgage broker to help them secure finance, or go it alone with their lender of choice?
For James Symond, CEO of Aussie Home Loans, potential borrowers need only look at consumer sentiment when it comes to finding an answer to that question.
“I think the results speak for themselves these days,” Symond says.
“If you look at the numbers, about 50% of the residential mortgage flow in Australia is completed by brokers. Consumers are voting with their feet as they recognise the benefits that come with choosing a quality mortgage broker.”
Symond believes one of the main reasons an increasing number of people are choosing to engage the services of a mortgage broker is the time that it saves.
“It’s much more convenient, and it’s really going to save time for people,” he says.
“Why spend however many hours researching and trying to ﬁnd what loan or which lender is the best for you, when you can go to an expert who has all the information right there at their fingertips?”
Symond says brokers are likely to save people even more time and money going forward as the number of products on the market increases, and changes to lending policies make finding the right mortgage a more and more complicated process.
“Right now the market is constantly changing. In no time at all, lending and servicing criteria can be completely different to what they were. Brokers are going to know about those changes a long time before the public will, and they’ll be able to guide you through it all,” he says.
“The other thing is there are more than 2,000 home loan products on the market now. It’s not like the old days when there wasn’t a whole lot of choice. I don’t think there’s going to be many people out there that have the tools to go through all of those products and find the one that has the best structure for them and suits them the best.”
While some people may only ever take out one mortgage in their lifetime, those who are multiple-time borrowers will see even more benefit from working with a mortgage broker, Symond says.
“If you go down to the local bank to see the bank manager or a consultant, there’s no guarantee they’ll still be there the next time you go, or if they are, you might not speak to the same person again.
“But with a mortgage broker you’re going to deal with the same person for the entire process. At Aussie we’ll soon as simple as asking a friend or family member if they’ve happened to use a particular broker or franchise and what their experience was like can really help you find the right broker for you.
“The other thing is to talk to the broker as well. There are various types of brokers out there, and you want to make sure that you’re working with the right one for your situation. If you’re buying a home you might want to use a different broker than you would if you were buying a property as an investment.”
Though he is firmly of the belief that brokers bring advantages to borrowers by saving time and money, Symond is realistic in recognising that some borrowers will still prefer to deal directly with their lenders.
For some who choose not to use a broker, it may be a matter of perception, as many people are wary of brokers have 200 storefronts across Australia run by owner-operators. If you’re dealing with one of our brokers and you come in a year later, they’re going to remember you and already have an understanding of your situation, and that’s going to make life a lot easier when you start the process of looking for another mortgage.”
Just as he doesn’t recommend that borrowers should walk into the nearest lender and ask for a loan, Symond says people should also look around before deciding on which mortgage broker to deal with.
“Taking out a mortgage is a big deal, and you do want to make sure that you’re working with someone who will do the right thing by you and someone you can get along with and work with.
“If there’s a brand or a broker you think you can trust, just try and find some of their backstory. Something given they are paid commission
“I’m realistic. I do believe that we will see more people use brokers in the future, but there’s never going to be a situation where everybody uses a broker. For whatever reason, you’ll always get somebody who doesn’t want to.
“One of the things we’ve done at Aussie is really invest in the training and development side of things and ensure that our brokers have the right support network so consumers get the best service.
“There are probably some others out there who aren’t doing that sort of investment and are just targeting commissions, but I think business is going to get a little tougher for them soon. People are starting to realise that there are brokers out there where they can get good service, and they’re going to choose them.”
Get to know your mortgage broker
Rebecca Hona of wHeregroup reveals her top tips for finding the right mortgage broker for you.
1 Their own lending. Whether home loan or investment
loan, it’s hard to talk the talk if you don’t walk the walk experience is everything
2 The big picture. With any proposal put forward, make time to go over the whole offer and ask lots of questions. Don’t go in blind assuming everything will be OK - prepare for tomorrow.
3 A team behind them. With any service, we all want any service, we all want instant gratification now, and
only a support team can provide this. Be sure to research their after-settlement service – that’s when you’ll see the real proposition.
Avoid like the plague
Mortgage brokers who focus on pushing fixed rates. It's not always necessary and won't increase your affordability - don't fall for it.
The old “you need to have your loans with lots of different banks". It's a total misconception and makes no logical sense unless you have reached your capacity with one lender. The more you borrow with the one lender, the more bargaining power you have.
Borrowing what the bank will give you, not what you can afford. I always say, "Tell me what you can afford to pay per week/month. Now, let's start from there as your maximum borrowing capacity."