How to get your mortgage broker working harder for you
What does a mortgage broker do?
A mortgage brokers role is to source the most suitable loan based on the individual clients needs. The key words here are “Most Suitable” as there a many different loan products and features and these need to be aligned with the client’s needs and objectives
How does a broker help prepare your application?
The first part of the application process is to have a comprehensive discussion with the client to understand their circumstances, needs and objectives. A fact find is completed as part of this process so the broker fully understands the client’s current financial position. The broker will then obtain from the client the necessary documents such as income documentation, bank statements, liability statements and ID documents. The broker will also need to understand the clients living expenses and capture that information via a conversation with the client as well as reviewing their documentation to verify the information is correct. The broker will then complete a serviceability assessment to confirm the clients would qualify to borrow the amount of money they are seeking. Once all of the information is obtained the broker will then do some research into one or more suitable loan products and put forward these options as well as recommendations for the client to review. Once the clients, along with the help of the broker, have selected the most suitable product the broker will then complete the application for finance and submit to the lender on behalf of the client.
What do you have to do?
The client’s role in this process is to be completely open and honest with the broker they are working with about their circumstances. Also, be as clear as possible with the outcomes they are hoping to achieve so the broker can put forward recommendations and solutions that meet those objectives.
How do they help you get a lower rate?
A mortgage broker will play a big role in ensuring the client gets the best rate possible for the lending solution they are seeking. If a client is refinancing an existing loan then the broker will compare alternate products in the market that would suit the clients and then negotiate with the lender to obtained the lowest rate possible. A cost benefit analysis should also be completed to be sure there is a net benefit to refinancing. Often there are costs involved in this process and they need to be taken into account to be sure the client really is on a lower rate moving forward.
If it is a new loan for a purchase, one of the brokers roles is to put forward to the client the lowest rate for the facility that is best suited for them. Often the lowest advertised rate for a particular product might not be the most suitable for a client or they may not qualify for that product based on their circumstances so there are usually a number of factors that will determine the lowest rate the client can obtain.
What advice can they provide on structuring your loan and other finances?
The broker can play a big role in making recommendations on loan structure, not only for any new loans being sort but also on any existing credit facilities. Once the clients needs and objectives are determined the broker can then put forward recommendations around the various options the client will have. These might include things like the most appropriate loan amount, selecting variable or fixed rates, principle and interest repayments versus interest only repayments. What is the most suitable loan term, should the client consider using offset accounts and/or redraw features that are available on certain products.
If debt consolidation is to be considered, is this the best option for the client. There will be circumstances where consolidating debt is appropriate and there will be times when it’s not and it is important for the broker provided the client with the necessary information around this so they can make an informed decision.
Can they help with investment strategies?
This is a really great question. Often a broker can assist with information and recommendations around investment, it will come down to the brokers knowledge on this topic and their experience. At times a broker can identify opportunities in a client’s circumstances where investing is possible. If this is the case the brokers role is to educate the client from a financing perspective what options might be possible for the client to consider. Clients may be unaware they have the option to consider investing until it is bought to their attention.
If you’d like to discuss your own circumstances with me, feel free to get in touch.