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Our job is to assist you in making the right decision

It’s easy for a bank employee they only have half a dozen products to offer and one policy document to work with.  Brokers work with several lenders and each has their own mortgage policy documents and these are usually 50 to 250 pages long. There is an enormous variation on what lenders consider acceptable even down the amount that they will let you borrow, their valuation policies and credit scoring policies are all different.

A professional mortgage broker will know who is offering what and who is and who isn’t performing up to scratch. Your mortgage broker will know the little idiosyncrasies that may make one lender stand out as an ideal or terrible choice. In most cases the commission that lenders pay your broker to originate your loan is sufficient to cover all of your brokers costs and so in most cases you get professional advice and service for free.

When you go to your bank and ask about a home loan, they will give you the best product/rate that is available from that bank.  We have access to the same lenders and products as brokers in other parts of the country, you are able to have your situation reviewed against a wide range of lenders and get the same products without the need to travel. We can also negotiate additional discounts in a lot of cases. With a wide range of lenders, some of the suggestions you may receive, could be lenders you don’t know much about or indeed haven’t heard of. Sometimes the smaller lenders have a better interest rate or feature than a major lender.  This may be because they have more flexibility or are driven by providing a benefit to the member rather than a shareholder.

Mortgage Broker Fees

This is a big topic in Mortgage Broker circles. At present the lenders pay a commission on the introduction of new home loan business. They also pay a retainer to the brokers to be there to answer questions during the life of the loan. Very few brokers charge an additional fee to the client for arranging a home loan. In the past some brokers charged customers fees in addition to the commission received.  (There aren’t many of these fee structures left in the industry). This is however a good question to ask a broker you may be thinking of using. ” Do you charge the client a fee to arrange a loan” If they do, check with another broker or two to see if the advice you are getting is consistent.

Mortgage Broker Independence

Because a Mortgage broker can’t possibly represent all financial institutions ( there are over 450 different institutions in Australia) they are prohibited from calling themselves “Independent”. Some however are less controlled than others. The major banks own a large portion of the mortgage broking groups in Australia. Another good questions to ask your prospective broker is ” Are any of the loans you are suggesting issued by a lender that owns or controls your organisation?”.  A broker that is in a bank owned group can still offer you a wide variety of loan options. You may get the same selection suggested to you by a broker not in such a group. As long as you know if there is any link, you can make an informed decision. Mortgage brokers are required to be licenced and you can check if the broker you are talking to is licenced with the broker Association MFAA here, or the FBAA here In summary, If you want an experienced professional to navigate the available options and to do the “heavy lifting” for you in terms of negotiating the policy and interest rates of a lender, then a broker who will advocate on your behalf will make the whole transaction easier than doing the work yourself. The service shouldn’t cost you anything to take advantage of, and you may even get a better deal that if you did it yourself.

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