A lot of market players make serious money from the substantial property industry. Approximately 50% of all new home loans use mortgage broker services.
What Is A Mortgage Broker?
A mortgage broker is a specialist professional who helps borrowers get home loans and helps lenders get customers. They arrange the appropriate finance for you, offering advice and guidance throughout. They work out what you can afford to borrow, understand your goals and explain products.
Do You Need A Mortgage Broker?
The answer to that question depends on your financial knowledge and property market confidence. The success of mortgage broker services giving clients good deals has resulted in their ever-growing popularity. If you wish to navigate on your own, this is called going “direct.”
Should You Use A Broker Or Not?
To help you make the decision, here are some questions:
- Are you confident in wading into the home loan market?
- Are you sure you will get better access to your desired product by going direct?
- Do you think you have a greater chance of saving money by seeing a broker?
- Do you have significant in-depth knowledge of loan types, features and legal liability?
You cannot be expected to have the same level of knowledge as a specialist. There are thousands of products on the market with real risks if you get it wrong.
A potential disadvantage to a broker is that they might have a limited number of home loan products or fewer financiers. Going direct, you might obtain a dozen options, which you then have to analyze.
Choosing A Broker
To help you choose a broker, here are some questions that you could ask:
- a) May I see your credentials? They need to carry a license from the FSRA (formerly FSCO).
- b) How many financiers will you be accessing on my behalf? They should have a mix of banks and non-banks.
- c) What are your fees and commissions? They are legally required to share this information.
After the deal is done, the financier moves on. Brokers provide ongoing contact. They have a vested interest to see the loan through its lifetime. They can also assist you with future financing.