There are many aspects that you need to weigh up including how much you’ve saved, how much you can borrow, how much you can afford in repayments and the hardest part – which home loan would best suit you.
It’s difficult researching the differences between home loans and lenders, especially if you’re a first home buyer or new to the market. The application process alone can be daunting with the documentation and time you need to find to dedicate to it.
More Australians are turning to the help of a mortgage broker in these times with 59.1% of residential home loans in the September quarter 2018 being settled through a broker1. In 2017, Mortgage brokers helped settled over half a million home loans – a figure that has doubled over the previous 10 years2.
What does a mortgage broker even do?
A mortgage broker does all the legwork for you. Their job is to make sure the process of applying for a home loan is made easier to understand and achieve.
Brokers help with the documentation, application and help you decide which home loan is suited to you and your unique situation.
The most important part of the process is knowing you’re in the right hands, and Mortgage Choice brokers always put you and your needs first.
Why property buyers are using mortgage brokers
Mortgage brokers have helped Australians settle home loans for decades, but are they really that important? With nearly 6/10 home loans1 having been settled through a mortgage broker – woe’d like to think they make a complicated process smooth, simple and more achievable.
Tighter lending conditions also make the home loan application process more difficult. There are certain requirements and documentation lenders require before they can accept your application. These very specific conditions make the knowledge and experience of a broker even more important to property buyers.
A report published in December 2018 by Momentum Intelligence who surveyed 5,782 Australian borrowers found that 96% of respondents who used a mortgage broker were either satisfied or very satisfied (84% being very satisfied).
With the customer’s best interests in mind and the options available to you through mortgage brokers, many Australians are relying on brokers during this significant time in their lives to ensure they feel informed and confident.
A changing industry
With the Royal Commission recommendations published, we’ve seen that the industry may shift in ways that could impact you and your ability to secure a competitively-priced home loan.
The Report recommends eventually moving from the current arrangement where mortgage brokers are paid a commission by lenders, to a system where the customer pay brokers a flat fee. Moving to a fee for service model could mean that the service may no longer be accessible to low income earners and first home buyers, as it is currently an essential first step for many to break into the market.
If this service is no longer available to many, it may drive traffic directly through banks to secure a home loan. This takes away the competition that smaller lenders provide. Without brokers as well as less access to smaller lenders, interest rates are likely to rise as a result.
Help us keep it accessible
We believe that mortgage brokers are valuable to many first home buyers, property owners and those who are looking to move into the property market.
We will continue to fight for competition within the industry to ensure an even playing field and keep the service available to everyone.
If you’d like to show your support, visit brokerbehind.com.au and sign the online petition. Also, if you’d like to take further action, the website also provides the tools for contacting your local MP.
1 Source: MFAA’s Quarterly Survey of leading mortgage brokers and aggregators (Jul – Sep 18), produced by CoreLogic
2 Source: MFAA IIS Report 5th edn., produced by CoreLogic