Mortgage Broker vs Bank
You may have noticed the Australian finance sector is in the spotlight at present as a Royal Commission is held into the banking, superannuation and financial services industry1.
If you're feeling confused about what it all means you're not alone - no doubt there will be some improvements in the banking and finance sector. But perhaps it's timely for a bit of a recap on the industry and the choices that consumers have...
With multiple lenders and hundreds of ever changing mortgage products available, finding the home loan to suit your individual needs is not only a complex process it usually requires shopping around. This has resulted in more and more home buyers turning to mortgage brokers for expert assistance.
In fact, did you know that mortgage brokers now account for around 56% of the market for residential mortgages2?
So what is the point of difference? What can a mortgage broker provide that you won't necessarily experience from a bank?
Why are there mortgage brokers?
The mortgage broking industry developed in the early 1990s to fill a void in the market. Mortgage brokers are generally seen as providers of comprehensive, convenient and solution based advice to clients. As they represent a panel of lenders they can offer clients a range of products and tailor loans to specific needs.
They have also established a reputation for assisting clients from the initial enquiry right through to settlement and beyond.
In particular, mortgage brokers work closely with borrowers by preparing the documents for the lender, submitting the application, liaising with both parties through the process and answering questions through the loan approval stage.
It's all about the relationship
For most people a mortgage is the biggest loan they will ever undertake and it will most likely be part of their financial situation for many years. And THIS is the REAL point of difference you won't experience with a bank...
Your mortgage broker will be there with you on your journey. When you establish a relationship with your broker it will be the ONE constant throughout the life of your mortgage(s) - even if you change lenders along the way.
Through regular contact your mortgage broker will get to know you, your family and the ever changing events in your life that may prompt a review of your financial situation. As your circumstances change it is always advisable to ensure any loans you have are still suitable for your personal situation.
Training and qualifications
In a bank you will be dealing with a bank loans officer - there is no requirement for a bank loans officer to acquire the same qualifications as a mortgage broker.
Mortgage brokers must meet membership requirements such as minimum levels of experience and education. They must also undergo probity checks and meet fair and ethical trading standards before gaining accreditation to practise as a mortgage broker.
A broker must also belong to an alternative resolutions service. This is a protective measure for borrowers should any disputes arise. As your finance specialist it is a mortgage broker's job to stay well informed on the changing landscape of lending in order to continue to offer you the most up to date information.
New generation of home owners
Most importantly your mortgage broker is well placed to look after both you AND your family when they are ready to explore their own options for entering the housing market.
As Generation Y is now actively entering the property market you can feel confident the relationship with your mortgage broker can continue into the next generation. If your children need to make contact with us to discuss their future plans we're always here to assist them.
1. abc.net.au/banking royal commission 2. mfaa.com.au Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. © 2018